As the Government prepares to present its Union Budget 2020-210, here are budget recommendations from experts
Dr Sudarshan Ballal
On taxation issues, we recommend two options on Goods and Services Tax (GST). Firstly, NATHEALTH suggested a Zero-rating GST for healthcare services.
Rationalisation of GST for healthcare input services would lead to the unlocking of the differential input credit and will ease costs for all healthcare providers including nursing homes, clinics, hospitals and diagnostic centres. This saving will be passed on to the end consumers and will lower the cost of care.
Since GST is not payable on health care services, health care service providers are not eligible to avail credit on the input taxes paid by it, which ultimately becomes a cost for the service provider. Under the current GST regime, the net impact of revised tax rates on inputs (goods and services) consumed by hospitals has increased. As this incremental cost is ultimately borne by the patients, it defeats the intention of the Government to provide affordable healthcare services.
The government needs to provide tax incentives for both existing and new projects. In our pre-budget recommendations also, we have strongly recommended that to spur investment in the sector, the Government could consider a tax holiday period of 15 years for hospitals. The length of the period of exemption needs to be longer, as new hospitals take at-least 5-7 years to start earning returns, after recovering interest and depreciation. For existing projects incentives can be given for 10 years, to support re-investment in capacity and technology upgrades..
Achieving universal health coverage is the need of the hour in the Indian healthcare system as the disease burden of non-communicable diseases is rising steadily. They are currently responsible for 61 percent of deaths in the country. We need more manpower and infrastructure in both rural & urban areas since we have a shortage of over 600,000 doctors and 2 million nurses, and just 0.9 hospital beds per 1000 people.
With dismal insurance penetration rates and the lack of insurance for primary OPD visits, India also has one of the highest out of pocket health expenditure rates globally. The temporary economic slowdown also means that public spending on health might shrink, which is not something we can afford. Therefore, I hope that the Union Budget focuses on these areas and Niti Aayog’s latest report identified five areas of focus for the future of the health system, including restructuring health financing, integrating service delivery, educating patients, and boosting digital infrastructure to increase access to quality healthcare.
It is an optimistic roadmap and with the support of the government, it can revamp the state of healthcare in India. Also, as a woman entrepreneur, I expect that Narendra Modi government’s Union Budget will once again lay its emphasis on the achievement of females in various fields. As women constitute just 14 percent of the national entrepreneurial force, there should be a committee that will ensure gender equality, boosting confidence on the part of investors, a safe social environment, and the ease to juggle work and family life.
Government should continue encouraging more women entrepreneurs to come forward and spread their wings. There should be a committee to evaluate and suggest measure to improve women's welfare and this move would be beneficial to empower the fairer sex in the society. There should be easy loans schemes which will help in boosting more women entrepreneurs to come forward and spread their wings.
It is essential to understand that empowering women entails equipping them to be completely independent, financially, physically and mentally. The Government should step up measures to improve women's safety, starting with round the clock helplines, crisis centers, fast track courts, and programmes to educate them on their rights. Legal authorities must be welcoming towards women so that criminal acts do not go unreported.
The government should streamline tax and duty structure in Union Budget 2020-2021 to ensure people get long-term access to quality medical devices.
High customs duties have adversely impacted the costs of the medical devices and equipment in India which contradicts the government’s efforts to provide low cost healthcare available to masses through programmes such as the AB-PMJAY. This is particularly concerning since more than 70% of the demand for medical devices is being met by global innovators.
The issues which need to be addressed in the budget this year are stated in detail below:
High Customs Duties: The high customs duties have adversely impacted the costs of products in India which contradicts the government’s efforts to provide low cost healthcare available to masses through AB-PMJAY. We seek reduction of customs duties (at the minimum, bring down to 2.5%) at the earliest to affect the margins lost due to currency depreciation. The INR depreciation, combined with the high customs duty rate has already increased the cost to the patients, making it harder for them to have access to quality medical devices.
Additionally, since the custom duty regime on most medical devices in neighbouring countries of Nepal, Bangladesh, Sri-Lanka, and Bhutan is lower than in India, the duty differential could lead to smuggling of low-bulk-high-value devices. The result will not only be loss of revenue for the government but also the patient will be beset with products which are not backed by adequate legal and service guarantees.
The recently hiked customs duties on IVDs (from 10% to 30%) that are imported from USA is also likely to have an impact on accessibility and affordability of diagnostics services in India. India imports 60% of its diagnostics, most of which include tech
Intensive testing methodologies such as molecular testing etc. which serve the priority diseases like HIV, Hepatitis, Cancer markers, among others and are not domestically produced. Increasing customs duty of such preventive tests for critical diseases like cancer and HIV will severely affect the accessibility to affordable healthcare.
GST on medical Devices & Spare Parts: GST should not be charged on free goods and samples of healthcare products as it is needed to promote expansion of healthcare sector through reduced costs improving patient accessibility. GST on medical devices is taxed @12%; it should be brought at par with preferential products and taxed at lower rate of 5%. Spare parts to be used for medical equipment should be charged at the same rate of customs duty and GST.
Tax Holiday for R&D: Tax holiday should be provided to medical device R&D centres under the Transfer Pricing Act to boost investment in setting up in-house R&D capabilities. We also seek tax incentives for the industry for developing global patents from India and tax deduction on income made by individuals or a company for rewards earned on patent development or patent licensing.
GST on Healthcare Services: Healthcare services are currently exempt from GST. As a result, hospitals are not able to claim GST input. This results in higher cost of treatment for the patient. Once zero rated, Hospitals will be able to avail GST credit on inputs, leading to lower healthcare services cost.
Marketing Director, Indira IVF
Budget 2020 should focus on cost of elder care and complete non-availability of insurance. We need to fix the economic angle and create some institutional solutions with government funding and sponsorship. The budget should upgrade the medical technologies which should be specifically designed to help Indian healthcare needs. Including IVF treatment in the insurance plan will help to minimise the financial risk to the person who is seeking the help. As of now, both private and *public sectors* are not including the insurance for IVF Treatment but should come up with such covers.
Budget is eagerly awaited by medical devices space as expectations are pegged on shaping the industry to be globally sustaining. Government should continue to focus on healthcare and invest in upgrading the primary and secondary health tiers in the country. All healthcare providers should provide the quality healthcare and help to shape the better healthcare system.
More investment must be there to provide the primary healthcare infrastructure, lower cost via technology and accessibility, approach and affordable treatment. Women must be provided with the assurance that they will receive the full pay during their maternity leave and should not be discriminated for future promotions and also paternity leave for men should be increased.
Co-Founder, Navia Life Care
We would like the Government to partner with healthcare startups to implement their projects and help them establish quality care for the people. The budget should aim to create healthcare facilities in small towns and rural areas. Ayushman Bharat is a nice step towards universal healthcare in India but better healthcare facilities need to be implemented. There is lack of doctors in public centres and are currently not able to serve. Technologies for doctors like video conferencing and diagnostic tools helps the doctors to diagnose the patient and assisting with services across the country.
The Government needs to allocate appropriate budget for the development of healthcare ecosystem in the country. To provide good quality healthcare in rural India needs to be taken care of like building healthcare infrastructure in rural and remote areas. The government must help the startups to grow through the implementation of tax benefit to angle investors for investing in the startups and to reduce the GST for the new entrepreneurs.
MoHFW came up with the National Digital Health Blueprint in July 2019, we hope that the government would take significant strides in that direction with specifications in the budget towards implementation of digital health in the government hospitals.
Last year, the then Finance Minister announced that the Government of India has envisaged a national programme for artificial intelligence (AI) in a bid to leverage the technology and take it to the masses, we believe that there would be bigger contribution in the form of budgetary allowance towards that. We hope that there would be specific guidelines given to government agencies on prioritising the implementation of AI driven technologies in their organisations and departments."
Senior Chairman, Jindal Naturecure Institute
The countdown of Union Budget 2020 has already begun and the expectations from everyone have risen already. Even we as a firm believer of naturopathy are expecting major initiatives from our Government, who has been taking enormous steps to promote ayurveda and yoga in day-to-day life. Time and again it has been seen that AYUSH systems have immense potential to tackle the rising healthcare burden of Non Communicable diseases (NCDs) in India. Besides yoga, Government should promote naturopathy and make it a part of school and college curriculums, and set up a committee to introduce naturopathy practices in universities.
Standardising naturopathy practice is the need of the hour as it will enable us to lay down strict standards that have to be adhered to by all Naturopaths. With a population of over 133 crores, the government really needs to leverage the resources of alternative medicine systems so that universal health coverage can be achieved. Legitimising naturopathy and conducting mass awareness campaigns to educate the masses is the right way forward.