Health may not have got the big bang announcement it hoped for, but will get a leg-up from some of the nine stated priorities, including digital infrastructure, say experts.

The innovation, research and development support, for example, held out hope for the pharmaceutical and medical devices industry; while cuts in the customs duty on three cancer drugs and basic customs duty (BCD) on x-ray components could translate to less expensive medical bills for patients.

The cancer medicines on which 10 percent customs duty was scrapped, were Trastuzumab Deruxtecan (breast cancer), Osimertinib (non-small cell lung cancer) and Durvalumab (immune-therapy for cancer).

Basic Customs Duty was reduced on x-ray tubes and flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, to synchronise it with domestic capacity addition, the Budget said.

Budget allocations

The Centre’s total allocation for health was ₹90,958.63 crore, up nearly 13 per cent over last Budget’s ₹80,518 crore. It’s flagship Ayushman Bharat health insurance scheme received an allocation of ₹7,300 crore, compared with the revised estimated of ₹6,800 crore (2023-24). The allocation for PLI (pharmaceuticals) stood at ₹2,143 crore.

The National Research Fund for basic research and prototype development, the Finance Minister said, would be operationalized. “We will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹1-lakh crore in line with the announcement in the interim Budget,” she added.

Shuchi Ray, Partner, Deloitte India, “hoped that a significant allocation under this priority will be made towards research in pharma and medical devices. While higher allocation to the sector and certain sector specific announcements could have helped, still, the integration of healthcare with most of the priorities, has still kept the sector in the race.”

She also pointed to the rationalizing of customs duty for some input material used in manufacturing of orthopedic implants and artificial parts of the body – a recognition towards boosting domestic manufacturing of such medical equipment

Unmet expectations

The Association of Indian Medical Device Industry’s Rajiv Nath pointed to their expectation of a “nominal duty increase on at least those medical devices that India had substantial manufacturing capacity” as demonstrated during the pandemic. “During Covid-19 pandemic, Indian medical devices showed its resilience in manufacturing syringes, masks, oximeters, oxygen concentrator and certain testing kits ….Removal of nil duty exemption on some of these medical devices would have acted as a further enabler for Make in India drive and enhance our global competitiveness,” he said.

Anil Matai, Director General, Organisation of Pharmaceutical Producers of India, pointed to their unmet expectations on incentives to develop medicines for rare diseases affecting small populations. “The incentivization of R&D investments in India is necessary as it will be a significant move towards Atma Nirbhar Bharat, and a more resilient and future-ready pharmaceutical industry,” he said. 

Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare, lauded the exemptions on cancer drugs exemptions and x-ray components. But he also pointed to the longstanding healthcare sector demand, unaddressed this budget – including increasing the GDP spend on healthcare to 2.5 per cent, prioritising healthcare as a national issue and promoting medical value travel in India, among others.

Vishal Bali, Executive Chairman, Asia Healthcare Holdings, added, “What the Budget achieves is the focus on youth and employment through schemes with an outlay of ₹2 trillion, support for MSME’s,….. What the Budget does not achieve is give focus to healthcare as another pillar of Viksit Bharat, give it the capital outlay of more than 2.5 per cent of GDP and reforms that will support the growth of the sector and give an impetus to indigenous manufacturing of medical technology. An outlay of ₹90,958 crore is a mere 12.9 per cent growth over the previous year which is insufficient towards bridging the demand supply gap in India’s healthcare.”