Budget 2019: Govt needs to substantially increase allocation for healthcare'

Anupama Joshi

In 2018-19, the government spending on healthcare in India was only slightly greater than 1 percent of the GDP. This is very low compared to government spending on healthcare at 7 percent to 12 percent of GDP in other developing countries. The expectation is that there will be positive steps to increase budget allocation and therefore government spending on healthcare.

Some high-level expectations from 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 Rs 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 budget is expected to be allocated to setting up new medical colleges and nursing colleges as well as strengthening district hospitals, especially in underserved cities to become medical colleges and contribute by increasing the number of graduate and post-graduate medical education seats.

• While healthcare services continue to be exempted from GST, high taxes levied on inputs such as consumables, on medical equipment (in the range of 12-18 percent), as well as on medicines need to be reduced.

• Allowing FDI in e-pharmacy sector and recognition of e-pharmacies under the Drugs and Cosmetics Act is another impending reform.

The author is Partner at Deloitte India.

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