Budget expectations

Allocate more budget towards Ayushman Bharat to ensure continued success of the scheme. As of September 2019, nearly 4.7 million people had availed of the scheme with treatments worth nearly INR 7500 crore delivered within one year¹. Of this, nearly 55% of the expenditure was on tertiary healthcare. As per the latest figures reported on the PMJAY website, nearly 7.6 million hospitalizations have happened under the scheme. We expect this number and the expenditure to significantly grow over the next few years, given the total coverage of 550 million people². Thus the government would need to significantly increase the budget from the current allocation of INR 6400 crore in the last budget.

Increase allocation for health and wellness centers to strengthen primary preventive and promotive care. As of September 2019, nearly 21,000 health and wellness centers have been operationalized in the country and have served nearly 17 million people² with free diagnostic screening, drugs and consultations along with referral to higher tertiary care relating to non-communicable diseases and maternal and child health. Continued budget allocation towards this initiative is required to achieve the target of operationalizing 1.5 lakh Health and Wellness centers by 2022.

Aid infrastructure creation in healthcare by according it priority sector status to enable better funding access. Additionally the government could look at setting up specialized funds for infrastructure development for hospitals in Tier 2, Tier 3 and rural areas. Special tax holidays given to such facilities as well as weighted deduction under section 35AD, to the tune of 150% or higher of the capital expenditure, could aid more infrastructure creation in resource constrained areas. Further, extension of such a scheme for hospitals with 50 beds will enable more infrastructure development in smaller tier 4 cities and provide the supply side healthcare facilities which can be reimbursed under PMJAY.

Improve focus on preventive health by providing higher exemption for preventive health checks, to the tune of INR 15-20,000, from the current INR 5,000 under 80D.

Improve affordability of care through tax incentives by reducing GST on medical devices - for example, reducing the GST rate on radiation therapy equipment from the current 12-18% to 5% will go a long way to make healthcare services more affordable to patients.

1 PIB,17 Sept 2019, “Ayushman Bharat shall prove to be a game-changer in provisioning of universal healthcare”,