Union Budget 2022 elicits Bouquets & Brickbats from Medical Device Sector

Domestic Industry body AiMeD smells MNCs breathing over Union Finance Minister’s shoulders


New Delhi: Union Budget 2022 passed today elicited both bouquets and brickbats from medical device sector. The domestic manufacturers feel MNCs breathed over Finance Minister’s shoulders to perpetuate heavy import of medical devices. Domestic manufacturers expected rewards in the budget for rising to the occasion during pandemic crises.On the other hand, there are some like Sahajanand Medical Technologies Ltd, which has words of praise for the budget provisions.

AiMeD (Association of Indian Medical Device Industry), a bodyrepresenting over 1200 manufacturers of medical devices in India, has come down on Budget forcold shouldering Indian Medical Device Industry again.

Rajiv Nath, Forum Coordinator,AiMeD, expressed deep disappointment and anguish over the Union Budget 2022 giving cold shoulder again to the Indian Medical Device Industry and nothing laudable for the Healthcare.

Mr Nath further says, ‘We were expecting the government to move forward on promised reforms and anticipated conducive measures to boost domestic manufacturing of medical devices. It is frustrating that against our expectations, the government has not included any measures to help end the 80-85% import dependence forced upon India and an ever-increasing import bill of over Rs.46000 Crore & promoting growth Indian Medical Device industry other than repeating last year’s assurance to end custom exemptions of products that can be made in India.’

Sadly, the union budget 2022 speech has no strategic stated measures to boost domestic manufacturing. These are the same domestic manufacturers, when imports got disrupted during COVID-19 crisis, the Govt. relied heavily on them 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. Predictable tariff policy
  2. Graded increase of custom duty to 10-15% from current zero to 7.5%
  3. Reduced GST on 18% where being applied to 12% as Medical Devices are not luxury goods.
  4. Not clear if Health Cess applied on some medical devices being also applied on other medical devices
  5. No announcement on R&D related tax breaks to motivate indigenous development

Mr Nath continues saying, ‘We had been hoping that this will be a Make in India push budget for an Atmanirbhar Bharat and though the FM has highlighted the need to support manufacturing sector, we, The Indian Medical Device Industry are disheartened not to notice any changes in custom duty as done for other sectors and are very hopeful that the fine print of the Union Budget would have possibly acted upon our recommendations on a Predictable Tariff Policy for a Make in India push for Phased Manufacturing Plan for Components and Finished Medical Devices and allocations for Testing infrastructure as well as for Med Tech Parks and Cluster developments. Supporting Policies are needed so that Indian Medical Devices Industry can make quality healthcare accessible and affordable for common masses, aim to place India among the Top 5 Medical Devices manufacturing hubs worldwide and help end the 80-85% import dependence forced upon us and an ever-increasing import bill of over Rs. 46000 Crore.’

“The only positive announcement was on Public Procurement by allowing 75% prompt payments and bringing in a weighted price preference on account of Quality which is especially critical in healthcare related medical devices.”

On the other hand, Dr Rajiv Chhibber, Vice President, Sahajanand Medical Technologies Ltd, has gone gaga over the Union Budget.  In a statement issued to Medicare News Dr Chhibber says, ‘The Union Budget 2022 is a testimony of new tech-enabled India@75, which clearly focuses on a digital and green growth path. If I have to see the Union Budget 2022 from a health and medical device manufacturing perspective, the increased focus on employability, e-skilling, employment generation in the MSME sector which has got an allocation of nearly Rs 2 lac crore and an emphasis to create nearly 60 lakh jobs is promising.’

Dr Chhibber further says, ‘We welcome the announcement for an open platform for the National Digital Health Ecosystem that will consist of digital registries of health providers and health facilities, unique health identity and universal access to health facilities. This is a much-needed digital health push that will immensely be helpful towards disease demographic profile mapping, especially looking at the NCD challenge that India has. Further Mental Health tele-services is also a welcome step that will surely set a new precedence of academia-technology strengthening institutional tie-ups that can look at pan-India solutions leveraging the power of technology towards healthy living, especially with the surge of cases during the pandemic. The One-Nation-One Registration towards Ease of Doing Business and Compliance is a big step for the industry, considering that the finance minister announced 75,000 compliances have been eliminated and 1,486 union laws have been revoked to make it easier to do business in the country. Tax incentives for start-ups to be incorporated until March 31, 2023, is also another step in right direction, and we look forward to the government introduced expert committees’ recommendation on regulatory framework for venture capital in the country. I also welcome governments assistance announcement and acknowledgement that Artificial Intelligence has huge opportunity for sustainability and growth and India can leverage the increasing the role, presence, and R&D of Artificial Intelligence in our healthcare, pharma and medical devices products. The announcement on Public Procurement by allowing 75% prompt payments will be a huge relief for the industry since delayed payments stop innovation.

From a financial perspective, India has one of the highest levels of OOP expenditure in the world, contributing directly to the high incidence of catastrophic expenditures and poverty. With India@100 in mind, the Union Budget should have still looked at the health sector from a wider angle, which I think is missing.’

Dr Chhibber sums up saying, ‘But the promising fact is that since nothing was rolled back, hence it gives an assurance that commitments made in the last budget will continue to give a booster shot to the healthcare sector. Overall, a balanced Budget which looks at consistency, and focuses on Atmanirbhar Bharat with a digital and green growth lens.’


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