Healthcare in Budget 2023 is Good until It is Not

It is Mixed Reaction from the Health Sector


BudgetNew Delhi: The duality of good and bad is continuing with Budget 2023 as usual. While Dr Ajay Swaroop, Chairman ( Board of Management), Sir Ganga Ram Hospital and Anjan Bose, Founding Secretary General, NATHEALTH played to the gallery, Rajiv Nath on behalf of the Indian Medical Devices goes ballistic in his criticism of the budget.  According to Mr Nath, so far as domestic medical device sector is concerned talk of Make In India and Atmanirbhar Bharat seem only mouth and trousers.

Reacting to Budget, Dr Ajay Swaroop, Chairman (Board of Management), Sir Ganga Ram Hospital said, ‘This year’s budget is really good. We are very pleased that this year allocation of funds for health care has been increased in this year’s budget.  Start of 157 nursing colleges will help in shortening gap in students for nursing care, also initiative to eliminate Sickle Cell Anemia is a welcome step. It would have been nice if some incentive would have been given to charitable hospitals like us who have been doing real charity work for last 5 decades. Also some focus on funding and incentive for doing telemedicine and research in remote areas would have been a welcome step.’

Anjan Bose Founding Secretary General, NATHEALTH, Former President of Philips Healthcare & Consumer Lifestyle, currently Advisor to eminent organizations like FICCI Healthcare/ManTech, Tata Medical and Diagnostic, said, ‘That the first Budget in Amrit Kaal has been balanced and positive, is corroborated by the significant jump in both SENSEX and NIFTY 50…Healthcare got its sunshine moments and good focus through 157 new Nurses college, mission to eliminate sickle cell anemia, incentivizing Pharma R & D, dedicated skill courses for futuristic Medical technologies, high end manufacturing…Announcing setting up of 3 centers of excellence for Artificial Intelligence with the vision of “Make AI in India & make AI work for India” should have positive transformational impact across segments in Healthcare sector..

Mr Bose added ,’We hope the focus on increasing Healthcare expenditure as a percentage of GDP in the post pandemic period continues…’

Mr. Rajiv Nath on behalf of the Indian Medical Devices Industry expressed deep disappointment and anguish over the Union Budget 2023 giving cold shoulder to the Indian Medical Device Industry.

Mr Nath added, ‘ It is highly disheartening that against Industry’s expectations and assurance by the various Govt. Departments , the government has not announced any measures to help end the 80-85% import dependence forced upon India and an ever-increasing import bill of over Rs. 63,200 Crore.’

Mr Nath further said, ‘Though our Prime Minister urges India to become Atmanirbhar in Medical Devices yet the medical devices imports continued to grow at an “alarming” level by 41 per cent in FY22. India imported medical devices worth Rs 63,200 crore in 2021-22, up 41 per cent from Rs 44,708 crore in 2020-21, as per data from the Union Ministry of Commerce and Industry.

Mr Nath bemoans saying, ‘Sadly, the Govt. didn’t even implement the recommendations made by the Parliamentary Committee on Health. If the Govt. implements even 70% of the recommendations, we could have seen a reversal on the import dependence and growth of the domestic industry.

It is very painful to see the plight of domestic industry players shutting shop as the local industry cannot compete with cheaper Chinese imports.Imports of Medical Devices from China went up by nearly 50% last year from 9000Cr ₹ to 15000 Cr ₹ on account of low duties and convenience to import. These are the same domestic manufacturers, when imports got disrupted during COVID-19 crisis, the Govt. relied heavily on to meet the rising demand of essential Covid items for the country pushing the Indian medical devices sector to become self-reliant.

The Indian Medical Devices Industry’s expectations were:

  1. Separate Department of Medical Devices.
  2. Graded increase of custom duty to 10-15% from current zero to 7.5%
  3. Shifting from an 8 Digit HS Code to a 10 Digit HS Code as done by USA and Europe to give more granular data for enabling better analysis and policy making
  4. Reduced GST on 18% where being applied to 12% as Medical Devices are not luxury goods.
  5. Trade Margin Monitoring: The purpose of low Duty was to help consumers get affordable access to Devices. This objective is not realized if consumers will be charged a high MRP of 10 to 20 times import landed price.

We had been hoping that this will be a Make in India push budget for an Atmanirbhar Bharat but we, The Indian Medical Device Industry are disheartened not to hear any impactful announcements for encouraging Makeinnindia of Medical Devices in India .

‘The only positive announcement was plans for skilling of manpower for manufacturing of Medical Technologies.’

The Indian medical devices industry has the potential to reach $50 billion by 2030. We request kind consideration of Govt. of India for encouraging domestic manufacturing to be sustainable in long term for becoming AtmaNirbhar and to address National Healthcare Security that was severely exposed at the onset of COVID leading to lockdown of country as Govt n entrepreneurs scrambled to produce COVID19 critical medical devices as the import dependent supply chains got disrupted.

“We can only be hopeful that the fine print of the Union Budget would possibly act upon our recommendations on levy of cess to enable nominal protection for investors and commercial viability to produce in India which is challenging if basic custom duty is 7.5% or lower ; to realise our vision to be among the top 5 Manufacturing Hubs in the world for medical devices abd align this our PMs vision of being Atmanirbhar .” Concluded a despondent Rajiv Nath.


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