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Budget 2015 disappointed healthcare sector

Updated: Mar 15, 2015, 03.08 PM IST
By Adhil Shetty

‘Health is wealth’, or so goes the famous saying. ​ The Union Budget for 2015-16 came close in spirit and word, putting some of the nation’s wealth behind its health. The focus on 'Swachh Bharat' in the Budget underscored the need for increased health and cleanliness awareness among people in addressing the basic health issues in the country and thereby realizing the vision of a healthy India.

While the government allocated a customary fund towards the healthcare sector, there was absence of a clear roadmap for the industry at large, especially the pharmaceutical industry. With India spending a meager 4.2% of its total GDP on healthcare, the Budget was a big opportunity for the government to set priorities straight and underline the significance of preventive healthcare, especially in wake of the persistent Swine Flu cases in the country and the Ebola scare elsewhere around the world. Here are some of the positives and negatives for the healthcare sector in this year’s Annual Budget:

Budgetary Allocation towards Healthcare: In one positive development that may put a spring in the stride of the Indian health care sector, the Finance Minister announced an allocation of Rs. 33,150 crore. This sum is more than the Rs. 30,645 crore that the sector received in the previous Budget. This fund is to be used in increasing the allocation to health care schemes, especially those operating under the National Rural Health Mission or NRHM. The move is overall a positive one for the sector as basic facilities would now be accessible by the poor and the needy.

Health Insurance Premium Benefits: The Finance Minister has increased the tax deduction limit of health insurance premium from the existing Rs. 15,000 to Rs. 25,000. The move is likely to encourage more people to take up health insurance in order to do efficient tax saving and thereby making medical treatments affordable for all. Senior citizens above the age of 80 years would also be allowed tax deduction of up to Rs. 30,000. This would help ease their out-of-pocket financial burden and provide more health risk coverage.

Setting up of All India Institute of Medical Sciences in Five States: This Budget has announced the formation of All India Institute of Medical Sciences (AIIMS) in five states, namely Jammu and Kashmir, Himachal Pradesh, Punjab, Assam and Tamil Nadu. There was an announcement to create an AIIMS-like institution in Bihar where an AIIMS was allocated for in the previous Budget. The formation of AIIMs in five states will not only help people get quality healthcare but it will also allow students to pursue globally benchmarked higher education in various medical streams in these institutions.

Clean and Healthy India: In order to create an impetus to the 'Swachh Bharat' mission, which ultimately aims for a healthy India, contributions towards the Swachh Bharat Fund have been exempted from tax, inviting fresh inflows to it.

No Announcements for the Pharmaceutical Industry: On the downside, however, the pharmaceutical industry was hoping for tax sops and provisions for more thrust in Research and Development. This Budget did not address the long pending request of the industry to allow reduction in minimum alternate tax and benefits for pharmaceutical units involved in R&D.; There was no change in patent laws as well, leaving researchers and innovation-oriented companies with a bitter taste in the mouth.

Medical Tourism: With no focus on this sector in the recent Budget, this industry has been left feeling blue in the face. Medical tourism has been one of the upstream drivers of the country’s booming healthcare industry. Lakhs of people from countries like the US, the UK and emerging economies travel to India for healthcare procedures every year, especially due to the low cost of treatments available here. If this sector was expecting a health pill from the Finance Minister in the form of budgetary allocations or other reforms, it was sorely disappointed.

(The author is the CEO of

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