Pre-budget expectations: Union Budget 2019

Life Sciences and Health Care

In 2018-19, the government spending on healthcare in India was only slightly greater than 1% of the GDP; this is very low compared to government spending on healthcare at 7% to 12% of GDP in other developing countries. The expectation is positive steps to move the budget allocation and therefore increased government spending on healthcare.

Some high level expectations from Union budget 2019-20 are as follows:

  • The government’s flagship scheme Ayushman Bharat PMJAY, in its first year, has managed to empanel over 15,000 hospitals and has already benefited over 27 lakh patients. Currently only 3.57 crore families of the original 10.74 crore families have been issued golden cards, and this number is expected to go up significantly this year. The government will therefore need to substantially increase its previous year’s allocation of INR 2,400 crore as it attempts to expand the scheme’s footprint this year and eventually merge it in the long run with other schemes such as ECHS, ESI, and CGHS.
  • Given the huge shortage of medical and paramedical manpower, substantial budgets are expected to be allocated to new medical and nursing colleges, and towards strengthening district hospitals to become medical colleges (especially in underserved cities) and contribute by increasing the number of graduate and post graduate medical education seats.
  • While healthcare services continue to be exempt from GST, it is expected that high taxes levied on inputs such as consumables, on medical equipment (in the range of 12% - 18%), as well as on medicines will be reduced.  
  • Allowing FDI in E-pharmacy sector and recognition of E-pharmacies under Drugs and Cosmetics Act is another impending reform.
Did you find this useful?