Budget 2024: Healthcare sector seeks GST relief, R&D incentives, local manufacturing

EU budget for 2024: The Indian healthcare sector has high expectations from the upcoming budget on July 23, 2024. Experts predict a significant increase in healthcare spending. Investment in rural healthcare facilities and primary healthcare is also expected to get a boost

The government can introduce policies to improve the quality and availability of primary healthcare services. Reducing GST on these services is a potential option.

Also Read: Budget 2024 July 23: Govt considers doubling number of Ayushman Bharat beneficiaries, insurance amount

Dr Ashutosh Raghuvanshi, Managing Director and CEO, Fortis Healthcare, emphasised that while the interim budget has introduced several initiatives, the upcoming budget should prioritise healthcare infrastructure by increasing expenditure to 2.5% of GDP.

“We urge the government to make healthcare a national priority and implement transformational measures to make India a global leader in healthcare,” Raghuvanshi urged.

Key Issues in Healthcare

Raghuvanshi highlighted that the healthcare sector is currently grappling with challenges like shortage of skilled manpower, indirect tax issues and unutilised Minimum Alternative Tax (MAT) benefit.

“To ensure sustainable and accelerated growth, the focus must be on policies that support private sector investment,” he stressed.

“The government should strengthen public-private partnerships by introducing new models and policies to increase the adoption of digital healthcare services and promote medically valuable travel. This can be achieved by facilitating international recognition of insurance for Indian healthcare providers to attract more international patients,” urged Raghuvanshi.

Diagnostics sector

The diagnostics sector, which is crucial for early detection of diseases and tailoring treatment, is playing a key role in India’s growth, said Ameera Shah, Executive Chairman and CEO, Metropolis Healthcare.

“We urge the new government to prioritize optimizing PPP models to ensure high-quality, positive, and meaningful outcomes. Increased funding for screening and diagnostic programs targeting non-communicable diseases (NCDs) such as cancer and heart disease is essential. Investing in training for doctors, nurses, and allied health workers will further improve the quality of care,” Shah said.

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0% GST on diagnostic services

Shah demanded that introducing 0% GST on diagnostic services and facilitating refunds of GST paid under input tax credit could reduce costs and improve accessibility.

Reducing customs duty on imported diagnostic equipment and adjusting high GST rates on laboratory supplies will increase efficiency and encourage investment in research and development, he added.

“These measures will significantly contribute to our shared goal of providing accessible, high-quality healthcare for all. We look forward to working with the government to address these priorities and ensure further growth and improvement of the healthcare sector in India,” Shah noted.

Increased spending on healthcare

Dr Sabine Kapasi, gynecologist, co-founder and managing director of Enira Consulting and global head of strategy at UNAC, UNAC, also stressed that healthcare stakeholders are demanding significant reforms.

“They suggest increasing healthcare spending to 3% of GDP, improving infrastructure in rural and underserved areas, and strengthening preventive healthcare. Addressing the shortage of healthcare workers through better training and working conditions is also essential,” Kapasi urged.

Health insurance coverage

Kapasi also stressed the need to expand health insurance coverage, adopt advanced technologies such as telemedicine and digital health records, and comply with the Indian Digital Personal Data Protection Act, 2023.

She added that the interim budget’s emphasis on new technologies such as artificial intelligence and machine learning underlines the need for modernisation in the sector.

R&D incentives, local production

Kapasi said that in the context of tax policy, it is important to support local production and research and development activities.

“Providing clarity on GST for business expenses and aligning rates for pharmaceutical ingredients is key to operational efficiency. Simplifying regulations and providing incentives for innovation and skill development can strengthen the potential and competitiveness of healthcare in India,” Kapasi urged.

Kapasi added that by investing in infrastructure, technology, human resources and clear regulations, the government can improve public health outcomes and support the growth of the pharmaceutical sector. Meeting these goals will be a significant step towards a healthier and more prosperous India.