Budget 2022: High Impetus On Digital To Pave Way For Tech-Enabled Healthcare System

The Union Budget 2022-23 identifies ‘focus on growth and all-inclusive welfare' as the first of top three goals of Amrit Kaal. In current times, growth and inclusivity have become synonymous with the resilience of healthcare infrastructure of a country.  

India has shown phenomenal resilience in the fight against the pandemic with healthcare and life sciences sectors leading from the front. The country has conducted the world's largest vaccination drive inoculating 93% of the adult population with at least one dose. We've seen the sector rise to the infrastructural challenge and strengthen the resolve for future-ready systems.  

With the budget for FY23, the government endeavours to build on its digitalisation efforts and pave the way for a technology-enabled healthcare system. The budget further provisions a massive outlay of Rs 7.5 lakh crore towards capital expenditure across sectors which will augur well for our Aatmanirbhar Bharat ambitions, although it remains to be seen how much of this expenditure will trickle down to healthcare and life sciences sectors. 

A look at key announcements impacting the sectors:

• National Digital Health Ecosystem, to be rolled out under the Ayushman Bharat Digital Mission umbrella, will integrate stakeholders across the ecosystem using an open platform. This initiative coupled with the Bharatnet project for digital connectivity in villages will make healthcare services accessible and affordable to all.

• The budget recognises increased awareness about mental well-being. The proposed National Tele Mental Health Programme with the network of 23 tele-mental health centers of excellence will make counselling and care services available to all while addressing patient privacy needs.

• Upgrade of 2 lakh anganwadis to Saksham Anganwadi will enhance the rural healthcare outcomes and strengthen the efforts under the Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 schemes.

• An increase of 35% in Pradhan Mantri Swasthya Suraksha Yojana to Rs 10,000 crore is a step towards making healthcare available to all by addressing the inequitable distribution of healthcare resources.

• Focus on growing the startup ecosystem through streamlining of regulatory issues, extension of tax incentives to startups incorporated up to March 2023 will benefit the HealthTech space as well.

• Pharma sector has been included under Sunrise sectors and will benefit from supportive policies, minimal regulations and facilitation to build domestic capacities. In addition, R&D will be encouraged through collaboration among academia, industry and public institution, and contribution from government. Startups in the sector will also get blended finance. 

• The budget proposes to phase out 350+ customs duty exemptions which includes goods across medical devices, drugs, and medicines. Additionally, customs duty for certain medical instruments, equipment and appliances have been reduced which will bring down import cost and nudge the domestic industry to become cost effective. These measures will collectively make domestic manufacturing competitive and strengthen the ‘Make in India' proposition.

• The multi-modal approach under PM GatiShakti will eliminate cost disabilities in logistics with multiplier impact across sectors, including healthcare and life sciences. This can also bring down the cost of drugs and medical supplies.

In its third edition under the prevailing pandemic situation, healthcare and life sciences sectors had high expectations from the budget. With these measures, there are some key demands which continue to be on the industry's “Ask list”:

• Zero-rated GST structure would have eased operational constraints for the healthcare sector and helped in making healthcare affordable for all.

• Inclusion of pharmaceutical products under the RODTEP scheme would have accelerated exports and strengthened our position as pharmacy of the world.

• Restoration of higher percentage of deduction under Section 35(2AB) of the Income-tax Act, 1961 for expenditure incurred for R&D purposes would have offered a fillip to innovation efforts in the life sciences sector.

With the key role of sectors in the battle against the pandemic, there was an expectation from the Government to go extra mile for meeting some of these demands. Overall, the budget takes a progressive approach while balancing growth and inclusivity over long-term. Hopefully, the government maintains the momentum gained by the sectors as we march towards the vision of India@100.

(Disclaimer: These are the personal opinions of the author.)