This year’s reformist budget sets the course towards growth for the life sciences and healthcare sector with a string of new initiatives
The Indian healthcare system has been under the lens even before the pandemic, considering the population explosion in the country. The healthcare and life science sectors have been well supported by the government as well as private sector players, especially to succeed in fully vaccinating almost 50% of the population. As lockdown restrictions obstructed the smooth functioning of all sectors, this year’s budgetary allocations for these sectors have vast implications on all other sectors like automotive and manufacturing to achieve growth.
The pandemic coerced the government not just to curtail the spread of the deadly disease but also to look at larger implications of coronavirus that arose such as mental health issues. Finance Minister Nirmala Sitharaman, introduced mental health initiatives for all ages as we embark on tackling newer variants of COVID-19.
The mass vaccination drive was perhaps just preview of the slew of healthcare initiatives to be introduced by government. Apart from the various schemes, this year Rs. 83,000 crore has been allocated to the health department, nearly 16.5% increase to the previous budget’s Rs. 71,269 crore. Boosting medical education, mental health and building a robust digital health ecosystem are the new programs that are vastly different from last year’s budget.
We track all the non-tax related major announcements that were highlighted in the Union Budget.
[box type=”info” align=”” class=”” width=””]Major Allocations in Healthcare:
- 10,000 crore for the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) which is around 43% more than the previous year’s budget of Rs. 7,000 crore. This will go towards enhancing the medical education network of AIIMS across the nation.
- 7,500 crore for the Human Resources for Health and Medical Education, which is around 56% more than the previous year’s budget of Rs. 4,800 crore. Essentially this resource will bridge the growing shortage of healthcare professionals.
- 72 crore towards building the branches of National Centre for Disease Control (NCDC). This is primarily done to improve tracking the zoonotic diseases and other tropical diseases.
- 37,000 crore for the National Health Mission (NHM), which is 1.2% more than the previous year’ budget allocation.
- 6,412 crore for the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), which is 0.2% more than the previous year’s budget at Rs. 6,400 crore. This signals the increased adoption of the scheme.
- Digital inclusion to augment the Ayushman Bharat Digital Mission (ABDM), by allocating Rs. 200 crore to develop National Digital Health Ecosystem.
- 404 crore to augment the hospital based or stand-alone blood centers as a part of the blood transfusion network.
- 5156 crore outlay for PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), which was launched in October 2021 to immediately strengthen the heath infrastructure.
- 226 crore for the Pradhan Mantri Garib Kalyan Package, that was launched in October 2021, to give healthcare workers insurance against COVID-19.[/box]
[box type=”success” align=”” class=”” width=””]Major Announcements in Life Sciences
- 14 sectors are expected to receive production-linked incentive or the (PLI) to improve the local manufacturing and creating jobs of as much as 60 lakh jobs while allocating Rs. 30 lakh crore in production in the course of the upcoming five years.
- Sustaining the ‘Sabka Saath, Saabka Prayas’ initiative to vaccination augmentation include the target of vaccinating 75% of the population. Hence, the vaccinations will continue to expand till it reaches the entire population.
- Introduction of a National Tele Mental Health program to deliver quality mental health counselling. Nimhans, supported by IIT Bangalore will be the nodal centre for a network of around 23 mental health centres.
- Overall 35% year-on-year increase in budgetary support to capital expenditure could enhance the construction of hospitals and healthcare facilities.[/box]
What does this mean for Healthcare:
- Apart from the Aarogya Setu platform, the National Digital Health Ecosystem will be another feather in the cap for the government to harness a robust healthcare infrastructure maintaining various digital registries of individual health identities, healthcare providers and facilities and universal access.
- While the PMSSY receives 56% additional allocation for upgradation of district hospitals, the budget does have sufficient incentives for private sector players in developing this infrastructure.
- Boosting the healthcare infrastructure with the increased outlay of Rs. 64,120 crore of the PM-ABHIM scheme from October 2021.
- ‘One Health’ programme can have vast implications for impeding future pandemics with designing and implementing programmes, legislation, and research.
- Mental health counselling system is perhaps a landmark system in the country.
What does this mean for Life Sciences:
- The PLI scheme in the pharmacy sector will help towards cost reduction, greater accessibility of medical equipment, reduced dependency on imports and perhaps larger exports as well as job creation for the unemployed youth.
- With a wider digital and on-ground supporting healthcare infrastructure, the vaccine rollout may reach 100% of the population at its rigorous pace.
- Nation Digital Health Ecosystem will be a landmark achievement of its kind where processes from hospital admissions to the filling of insurance claims will be digital across the nation. This would create a marketplace for national healthcare providers in delivering services to all.
- Capital investment in life sciences sector will encourage further medical research apart from the construction of hospitals and increasing coverage of medical facilities in urban-rural areas.
A clear roadmap has been laid out to achieve the optimum outcomes in healthcare, yet several quarters feel that the medical device industry has been neglected in the budget.
References: KPMG: https://assets.kpmg/content/dam/kpmg/in/pdf/2022/02/life-sciences-budget-2022-23.pdf;
https://assets.kpmg/content/dam/kpmg/in/pdf/2022/02/healthcare-budget-2022-23.pdf
