Union Budget 2023: Key takeaways for health sector

Finance Minister Nirmala Sitharaman presented Union Budget 2023-2024 today

Seven priorities announced for Budget 2023 includes inclusive development, Reaching last mile, Infrastructure and investment, unleashing potential, Green growth, Youth Power and Financial Sector.

Finance Minister also mentioned that 220 crore COVID vaccination was given for 102 crore persons.

Key announcements for healthcare sector:

  • Facilities in select ICMR labs will be made available for research by public and private medical faculties
  • A mission to eliminate sickle cell Anemia by 2047 will be launched to create awareness creation & universal screening of 7 crore people under the age of 0-40
  • The implementation of dedicated multidisciplinary courses for medical devices to be supported by the government in institutions to ensure skilled manpower for futuristic medical tech and high end manufacturing and research.
  • The establishment of three centres of excellence for artificial intelligence to enable ‘Make AI for India’ and ‘Make AI work for India’ to enhance India’s digital prowess.
  • National Data Governance policy will be introduced which will enable access to anonymised data
  • 157 new nursing colleges will be established in core locations

Industry reaction on the union budget:

Giving their analysis on the budget, Praveen Raju (Partner) and Renuka Abraham (Senior Associate), Spice Route Legal said, “Budget 2023 has prioritised research and development, especially in pharmaceuticals. Additionally, the availability of ICMR research labs for outside parties also shows the importance that the government is now placing on research. Sharing expertise between the private and public sectors will ensure more innovation in the healthcare space.

The budget has also encouraged education in healthcare, such as increasing the number of nursing hospitals in India, which would boost the number of nurses to support healthcare and training in medical devices. Even adding artificial intelligence in educational institutions will increase digital healthcare in India.

The action taken by the government to tackle Sickle Cell Anaemia (SCA) in the Budget must be recognised. SCA is a genetic condition which is prevalent among the tribal population in India. While the government has previously also sought to tackle SCA by launching a Sickle Cell Disease Support Corner by the Ministry of Tribal Affairs, making it a part of the budget would ensure that this issue is tackled efficiently and effectively.

While the recent budget has increased the healthcare sector’s allocation and boosted certain areas, the budget has received mixed responses from industry experts. Sujatha Rao, Former Secretary of Health and Family Welfare, GoI, stated that this Budget was disappointing and boring.

The budget has failed to consider the requirements of the Indian medical devices industry, and no schemes have been established to promote them. The budget did not also address the demands of the Medical Technology Association of India (MTAI) with respect to customs duty on the import of finished medical devices and components. Likewise, the medical devices industry also expected a separate Department of medical devices, but to no avail. The Indian government introduced the Production Linked Incentive Scheme (PLI) and the Promotion of Medical Devices Parks Scheme in 2020, and incentives for medical devices were Rs 3,420 crore from 2020-21 to 2027-28. Under this Budget, however, the government had neither considered PLI nor any other incentives for the medical devices industry.

Also, there is no importance given to primary healthcare systems in India, and no incentives are provided to companies to promote the schemes introduced in the last budget, such as mental health and telemedicine. Similarly, the budget has also not addressed the gap of not having legislation to govern e-pharmacy in the country.

While this budget is a welcome move, especially for preventive healthcare, the government could have done more to consider the growth in digital technology over the last couple of years.”

Himanshu Baid, Managing Director, Poly Medicure Ltd. (Polymed) said, “Budget measures look promising for universal access & quality healthcare. With the budget 2023 continuing to be growth oriented, the sharp focus on prioritised medical education will certainly strengthen the healthcare infrastructure. Government’s announcement in the union budget about “Creating dedicated multi-disciplinary courses for medical devices in the existing institutions” is a welcoming step for the healthcare sector as there is a severe shortage of skilled healthcare workers in the country. In a country like India there is not just shortage of skilled manpower but also lack of an efficient infrastructure for healthcare training and skilling. Government’s focus on skilling & upskilling of medical staff would certainly catalyse the broader growth for healthcare sector, and have positive spill over effects on the medical device segment. In future, government should also look at setting up dedicated medtech colleges on the lines of NIPERS. Shortage of efficient and well-trained technicians & paramedical staff has been a well-recognised hurdle.”

“Promoting nursing education through the setting up of 157 new nursing colleges will help cover the lack of trained healthcare workforce & also lead to quality care accessible to masses. The plans to provide access to ICMR labs and other R&D facilities as well as a collaborative approach to research and encouragement of private sector investments, multi-disciplinary training for R&D and manufacturing of high-quality medical devices, and various other such measures are promising for quality, accessible & affordable healthcare in India. Overall, the budget has made a progressive stride towards the healthcare sector.”

Dr Ashutosh Raghuvanshi, MD & CEO, Fortis Healthcare said, This year’s budget has set the pathway for India to achieve universal health coverage. We welcome various initiatives announced by the honorable Finance Minister to address the long-standing gaps of the Indian healthcare ecosystem. On the healthcare front, the budget focuses on the opening of 157 new nursing colleges and using existing facilities in select ICMR labs for research by public & private medical facilities. The announcement of dedicated multidisciplinary courses for medical devices in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing will play a pivotal role in strengthening the healthcare sector. We also welcome the Mission to eliminate sickle cell anemia by 2047 which will immensely benefit a large population. The government’s greater emphasis on R&D, innovation and results-based financing towards more effective PPP will prove to be beneficial in creating the much-needed shift towards quality and higher value. In view of the G20 presidency, overall, the announcements provide a strong impetus to strengthen the Indian healthcare ecosystem.”

Dr Shravan Subramanyam, President, NATHEALTH says, “It is encouraging to see the importance that the healthcare sector has got in this year’s budget. Skilling of healthcare nurses and allied workers has been a long-standing gap, hindering healthcare delivery expansion, and the Union Govt. has taken a step in the right direction to address this. A significant increase in nursing and medical colleges, strong emphasis to promote innovation and R&D, PPP in healthcare and medtech specialised workforce will lay a stronger roadmap for the future.

The initiatives announced to strengthen the digital healthcare infrastructure will prove to be beneficial for the healthcare sector in the years to come. The mission to eliminate sickle cell anemia by 2047, income tax rebates and disposable income to be channeled to essential items – healthcare being one, are laudable efforts undertaken by the government. However, the long-standing requirements of the sector to increase healthcare spending as GDP per cent to 2.5 per cent, custom duty reduction to balance demand with supply and the nascent healthcare manufacturing base in equipment scheme, streamlining embedded indirect taxes like GST in healthcare making a smooth flow of credit difficult across value chain and low-cost financing schemes to strengthen healthcare infrastructure, primary care and improved working capital has not been addressed. In the last couple of years, a big positive is the partnership spirit with the private sector in healthcare and coherent initiatives undertaken to take these goals towards reality for a healthier prosperous India.”

Pritika Singh, CEO, Prayag Hospitals Group says, “We welcome FM Nirmala Sitharaman’s announcement regarding establishing 157 new nursing colleges in core locations. In addition, the proposal for a multidisciplinary course for medical devices for skilled manpower is also praiseworthy. The dedicated multidisciplinary course for medical devices will be supported in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing and research. The health budget has been increasing yearly, especially after the Covid-19 pandemic. In Union Budget 2022-23, 86,200 crore rupees were allocated to the Union Ministry of Health & Family Welfare, a 16.5 percent increase over the previous year. Apart from that, we also laud the new program for pharma research proposed by the FM. The program will be formulated and the industry will be encouraged to invest in research. The pharmaceutical industry has been asking for incentives to promote R&D investments.”

Probal Ghosal, Executive Chairman, Ujala Cygnus Group of Hospitals said, “The Finance Minister’s proposal regarding establishing 157 new nursing colleges is a welcome move. As we know, several new hospitals are opening every year, but there is a dearth of skilled healthcare workers. So, this move will help to fill this gap, especially in tier 2 and tier 3 cities. The government has also proposed a multidisciplinary course for medical devices for skilled manpower. Also, we should take pride in the fact that 220 crore COVID vaccines were given to 102 crore people. It highlights our strong healthcare strategy to tackle a health crisis of such magnitude in such an overpopulated country. We should invest in research at a grand level now and support from the Government in this direction is a welcome move. It is also great to know that leading industry players will partner in conducting interdisciplinary research, and develop cutting-edge applications and scalable problem solutions in the areas of agriculture, health, and sustainable cities. However, a few other areas like GST rationalisation in healthcare, gap funding on infrastructure in building hospitals in Tier 2 cities, and rural India in terms of capital contribution and subsidy, should have been addressed as well in the budget.

Kamal Narayan Omer, CEO, IHW Council said, “With the Union Budget 2023-24, focusing on accessible, affordable and inclusive health care for all along with emphasis on health infrastructure and better R&D for innovations and developments in healthcare, Budget 2023-24 is going to accelerate India’s progression towards SDG’s while ensuring that no one is left behind, thus facilitating the building of a Swasth and Ayushman Bharat.”

Nikkhil K Masurkar, CEO, Entod Pharmaceuticals highlights, “New program to promote R&D in pharma to be taken up through the center of excellence is a welcome move by the government in this year’s budget. We are delighted with the government’s initiative for encouraging sunrise sectors like Medtech.  The implementation of dedicated multidisciplinary courses for medical devices to be supported by the government in institutions to ensure skilled manpower for futuristic medical tech and high end manufacturing and research is another much needed move by the government. We highly welcome the implementation of such measures. It is clear that the government is focussing on enhancing the healthcare infrastructure of the country through these efforts. The establishment of three centres of excellence for artificial intelligence to enable ‘Make AI for India’ and ‘Make AI work for India’ is another significant step by the government to enhance India’s digital prowess. However, we are a bit disappointed by no announcement on any sort of GST changes and simplified regulations. Also, we were expecting that the government would allocate separate funds for R&D, formulation and APIs. So, I hope these factors will be taken into consideration in the coming years”.

Dr Jyoti Kapoor, Founder & Director, Manasthali Wellness, said, “We welcome the announcements made by the government in Budget 2023 particularly for the health sector. The government has taken several initiatives to strengthen the health sector in this year’s budget compared to last year. From planning a mission to eliminate Sickle-Cell Anaemia by 2047 to creating a new program for pharmaceutical research as well as providing facilities in select ICMR labs, all will be made available for research by public and private medical facilities, but some announcements to boost the area of mental health are still missing.”

Shuchi Ray, Partner, Deloitte India added, “The budget announcements for healthcare sector have considered the areas of research & development, skill development, awareness, infrastructure and preventive healthcare, which are very welcome. Focus on R&D via public private partnerships and benefits to industry are in line with the industry expectations and will help the country in its positioning as innovation hub. Specific recognition to research and manufacturing of medical devices will fulfill in meeting sector’s growth targets, increase manufacturing activity and meet the demand of medical devices at affordable prices in the long run. Overall, the announcements are inclusive and far-sighted, giving due importance to the sector.”

Dr Jogin Desai, CEO & Co-Founder, Eyestem said, “The mission mode program to eradicate sickle cell anemia can be tremendously impactful.  Such programmes are a marathon and not a sprint yet can  create a fantastic template for programmes for other diseases like curable blindness in subsequent years.  Also glad to see the focus on research and development in the pharma sector which is a much needed push to ensure a local ecosystem of innovation is created in India to make us self-reliant. One of the centres of excellence we would certainly like to see is plug and play GMP manufacturing infrastructure for startups in the biotech space. Overall, very pleased to see a deliberate method to nudge the Indian private and public ecosystem towards innovation and partnership.” 

Meena Ganesh, Co-Founder & Chairperson, Portea Medical stresses, “In this Union Budget, the government has focused on some of the core needs of the health and wellness sector. The plan to establish 157 nursing colleges as collocated facilities alongside medical colleges will help cover the shortage of trained healthcare workforce and lead to greater healthcare coverage of the out-of-hospital medical services. The plans to provide access to ICMR labs and other R&D facilities as well as a collaborative approach to pharmaceuticals research and encouragement of private sector investments, multi-disciplinary training for R&D and manufacturing of high-quality medical devices, and various other such measures are going to augur well for the overall universal healthcare access and quality in India.”

Runam Mehta, CEO, HealthCube added, “The decision to provide multi-disciplinary training for the development of medical devices and support for the manufacturing of high-quality devices is going to be a key enabler for the domestic medical devices industry. These courses will not only ensure the availability of skilled manpower for future medical technology but also offer opportunities for high-end manufacturing research. The decision of opening up facilities in select ICMR labs for research by private and medical colleges will enable better infrastructure access for both individuals and organisations who are looking at undertaking research and innovation in this area.”

Dr Arbinder Singal, Co-founder & CEO, Fitterfly said, “As a digital therapeutics platform, it is encouraging to see the government focus on AI and IoT integration in health management. This will help in increasing the adoption of smart wearables such as Continuous Glucose Monitors and other devices that record vitals. Empowering medical devices and technology developers would lead to greater access, affordability and effectiveness of health management services. A number of skill development initiatives including the setting up of 157 nursing colleges across India will also help in creating a much larger pool of trained healthcare workers who will subsequently play a key role in disease management and monitoring. We hope that these decisions are implemented through effective and easier collaborations between the private and public sectors.”

Dr Simmardeep Singh Gill, MD & CEO, Sterling Hospitals said, “With the aim to strengthen the economy of India, this year’s Budget announced by Union Finance Minister, Nirmala Sitharaman, is focused on building a robust digital infrastructure across sectors while promoting green growth and job creation. Having laid a sturdy foundation for a strong healthcare ecosystem in the past couple of years, this year’s budget has moved towards reinforcing the R&D and core medical education system. The announcement of 157 nursing colleges to be set up will help in imparting value education to students and strengthen the healthcare sector in the long run. One of the major focuses of the government during this budget was to tackle the sickle anaemia disease. The Budget took a bold step and laid out a plan to eliminate sickle cell anaemia by 2047 which will be launched soon. Other than creating value awareness, this program will include a screening of 7 crore people in the affected tribal areas. This goes hand in hand with the Budget’s focus on inclusive development. Additionally, the Budget has announced a new program for investing in R&D in pharmaceuticals. This will be a major step in analysing and curating necessary medicine with positive results. This will majorly boost the sector and be a huge boon for the years to come, laying a strong foundation for the industry.’’

Dr Tathagato Rai Dastidar, Founder & CEO, SigTuple highlights, Addressing the health care announcements made by the honorable FM today he stated , “The newly announced focus on screening and eradicating sickle cell anaemia in the country is a step in the right direction. Anaemias and other haematological disorders are endemic in tribal populations of the country. Use of advanced digital technologies can help vastly increase the scale of screening than what is possible today.”

He also added “The proposed National Data Governance Policy, which provides access to anonymized data, will go a long way in supporting the stated mission of making AI work in India.” as he addressed the AI focused stated in the budget.

Dr B.M Makkar President, RSSDI added, “Setting up various nursing colleges across the country is a much-needed move. This will help prepare the nation against an outbreak like COVID-19 so that we have adequately trained medical professionals. Sickle cell anemia is one of the genetic diseases that has been posing a major setback to the country’s health status, especially our tribal population. We appreciate the announcement of the mission to eliminate this disease by 2047. In addition, extending ICMR labs facilities for public and private medical colleges and private sector R&D teams for research purposes will lead to better research outcomes and give rise to innovative solutions. This will address the research gaps in noncommunicable diseases such as diabetes and cardiovascular disease.”

Srinivasa Vivek, Co-Founder, Resolute Active Care said, “Many necessary changes have been put in motion in the union budget 2023. Opening 157 new nursing colleges in co-locations with the existing 157 medical colleges, and introducing multidisciplinary courses for medical devices and skilled manpower for futuristic medical technologies is a welcome step for next-generation-lent development. Initiatives like initiatives for Make AI in India and Make AI Work for India is a great step toward advanced technology development. Governance policy to enable access to anonymised data will play a crucial role in strengthening the research and development. Select ICMR labs will also be made available for research by public & pvt medical facilities, which is a great move. However, there could have been more allocation in terms of investments in theital health and therapeutics.”

Gautam Khanna, CEO, P.D. Hinduja Hospital & Chairman FICCI Health Services commented, “Budget 2023-24 focused on enhancing India’s capabilities and resources through increased manpower, R&D, and  PPP in healthcare sector. Setting up of 157 new Nursing colleges is welcome, in view of the severe shortage of nurses in the country. However the current state of existing Nursing colleges must .be evaluated for upgradation & better job opportunity for nurses to be identified to curb international migration. The idea of setting up a Center of Excellence in AI for health along with the strengthened impetus towards medical education will accelerate the development of new-age, technology-driven medical solutions for better disease management and encourage start-ups to come up with Innovative solutions in the Healthcare Delivery space. Creating awareness  of prevention and early screening is not only essential in eliminating sickle cell anemia but would also be a great stepping stone for similar diseases , however its success will depend on  effective implementation. The increased focus on encouraging medical education and PPP will aid the industry’s growth. The budgeted increase in healthcare expenditure of 15% does not seem to enough to tide over the current challenges of upgradation of infrastructure and providing accessibility and affordability for  quality healthcare in the country.  We are looking forward to  clear indications of the steps to be implemented for healthcare infrastructure development and move closer towards universal health coverage with increased expenditure as a % to GDP. It would have been better if there were  tax exemptions for healthcare, which is vital to reduce healthcare expenses & out of the pocket spending.”

Manikandan Bala, Senior Vice President, TIMEA & Asia Pacific, Direct Sales Strategies & MD India & SA, Elekta stresses, “A well-designed training course to bridge the current skill gap can upskill the clinical community in using contemporary medical devices with effectiveness and precision thus resulting in better patient outcomes. This initiative will also help individuals develop the skills necessary for a career in the medical device industry. It will grow a skilled workforce that would improve the overall quality of solutions and services in the medical devices sector.”

digital healthFinance Minister Nirmala SitharamanHealth infrastructuresickle cell anemiaUnion Budget 2023
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