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When we speak about the healthcare sector, the focus on affordable cancer care took centerstage as Finance Minister outlined nine key budget pillars of priorities for ‘Viksit Bharat’. That said, the budget offers more promises with a triangular zone of progress – access, affordability, quality healthcare.
The increased health expenditure by 12.97 per cent to Rs 90958.63Cr from last year is expected to expand healthcare infrastructure in Tier two and three cities, towns and rural areas to provide access to affordable and quality healthcare. To further strengthen the ongoing efforts to reduce import dependence and build resilience in supply chains, steps like complete customs duty exemption on 25 critical minerals is a welcome move. Moreover, with the operationalisation of Anusandhan National Research Fund for basic research and prototype development and private sector-driven research and innovation at commercial scale with a financing pool of Rs 1lakh crore, we will witness a spur in R&D. It would help India to move from volume to value manufacturing.
To incentivise manufacturing in MedTech sector the 40.9 per cent increase from last year to Rs 85Cr in this budget for Production Linked Incentives is encouraging, especially as ‘Make in India’ gains momentum. Simplification and streamlining of the scheme for easy adoption by industry and expanding it to brownfield investments and components and subcomponents is the need.
The announcement of a “comprehensive review of the rate structure for ease of trade, removal of duty inversion and reduction of disputes” will encourage more investment in the country and propel the Atmanirbhar journey. Our suggestion is to segregate HSN codes for differential custom duties between finished good, components & raw material by tweaking HSN Code mapping (e.g. leveraging last 2 digits of HSN code to differentiate). Further the IGCRD benefits of 2.75 per cent should be widely popularised for higher adoption and benefits to domestic industry.
It's heartening to see the industry recommendation being heeded by the government by way of providing exemptions of custom duties on specialized raw materials and reduction of custom duty from 15 per cent to 5 per cent brought inadvertently on X-ray tubes and flat panels detectors. These steps can further be bolstered by constructive dialogues with the industry conversations to evaluate the local manufacturing capabilities as done during Meditech Stackathon by Department of Pharmaceuticals.
The major thrust for incentivising skilling and job creation by providing cash in hand to youth and encouraging MSMEs and large industries to use their CSR funds to train and employ is promising. Buoyed by progressive policy reforms, we are hopeful that the new budget will pave a new way for the healthcare sector, especially as we chart the course powered by Make in India MedTech.
The author is Managing Director, Wipro GE Healthcare and President and CEO, GE HealthCare South Asia
