The Union Budget 2022-23 highlights the need for growth and all-inclusive welfare as the primary three priorities of “Amrit Kaal’.
The Union Budget 2022-23 identifies ‘focus on the growth of our country and a more inclusive welfare system as the top of the three priorities that Amrit Kaal sets. Today the words “growth” and “inclusivity” are synonymous with the strength of the healthcare infrastructures of a nation.
India has demonstrated a remarkable amount of resistance to the pandemic, with healthcare and life sciences industries taking the lead from the beginning. The country has carried out the world’s most extensive vaccination campaign that has inoculated 93 percent of adults with at minimum one dose. We’ve seen the industry rise to the challenge of infrastructural development and strengthen its resolve to build modern systems ready for the future.
In the FY23 budget, The government seeks to expand its digitalization efforts and pave the way to a tech-enabled healthcare system. The budget also provides an enormous sum of 7.5 lakh crore for capital expenditure across different sectors. This will be a positive sign to our Aatmanirbhar Bharat aspirations; however, it is yet to be determined how much this spending will be passed on to the life sciences and healthcare sectors.
The most important announcements that impact the sector:
- National Digital Health Ecosystem will be implemented within the Ayushman Bharat Digital Mission umbrella and will connect stakeholders across the entire ecosystem using an open platform. In conjunction with the Bharatnet project for connectivity to the internet in villages, this initiative will make health services affordable and accessible to everyone.
- The budget acknowledges the increased awareness of the importance of mental health. A proposed National Tele Mental Health Programme, which includes the system of 23 virtual mental health centers of excellence, will make counseling and other services accessible to everyone while meeting patient privacy concerns.
- Upgrade to 2.25 million anganwadis in Saksham Anganwadi will boost health outcomes for rural areas and enhance the efforts of those of the Mission Shakti, Mission Vatsalya, Saksham Anganwadi, and Poshan 2.0 programs.
- A rise of 35 percent of the Pradhan Mantri Swasthya Suraksha Yojana to $10,000 crore is a first step toward providing healthcare to everyone by addressing the unequal distribution of health resources.
- Focus on growing the startup ecosystem by simplifying regulatory issues. The extension of tax incentives for startups that have been incorporated before March 2023 will help the HealthTech area.
- The pharmaceutical sector is included in the Sunrise industries and is expected to benefit from supportive policies with minimal regulation and support to increase domestic capacities. Startups in the sector will also benefit from mixed finance. Additionally, R&D will be encouraged through collaboration between industry, academia, public institutions, and contributions from the government.
- The budget plans to eliminate 350plus customs duty exemptions that include goods from medical devices, drugs, and pharmaceuticals. In addition, the customs duty on specific medical equipment, instruments, and appliances is being reduced to lower import costs and push the country’s manufacturing industry to become more efficient. These measures will improve the efficiency of manufacturing domestically and further strengthen the ‘Make In India’ concept.
- The multi-modal strategy under PM GatiShakti will eradicate cost-related inefficiencies on logistics that have multiplier impacts across all sectors, including health and life sciences. This could reduce the cost of medications and medical equipment.
- In the third edition of its budget under the present pandemic conditions, the life sciences and healthcare sectors were expecting a lot from the budget. With these reforms, several essential demands remain in the industry’s “Ask checklist”:
- A zero-rated GST structure could have alleviated operational limitations in the healthcare industry and made healthcare accessible to everyone.
- The inclusion of pharmaceutical products within the RODTEP scheme would have helped accelerate the exports of our products and strengthened our standing as a leading pharmacy in the world.
- The restoration of a more deduction percentage in section 35(2AB) in the income-tax act of 1961 for expenditures made for R&D could have given a boost to the efforts of innovation in the life sciences industry.
