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The increased tax on tobacco and aerated sugar water notwithstanding, healthcare representatives are unhappy that Budget 2014-15 has “effectively given healthcare the go by”.
From public-health workers who were hoping that the “Modi-budget” would increase Government spending on healthcare, to the pharmaceutical industry looking for incentives to support this strategic sector – disappointment is the common thread.
Though the Budget may be “directionally good”, there is not a single big idea, says Arvind Singhal, Chairman, Technopak Advisors. The plan to have AIIMS (All India Institute of Medical Sciences) hospitals in every State, for instance, is good - but will it have the desired impact, he asks. A world-class AIIMS hospital would require a Rs 2,000 crore investment, he says, adding that the Government has ear-marked about Rs 500 crore. The scale of investment and the number of hospitals need to be much more, he says, adding that “India needs half a million hospital beds right now”.
Novartis India-head Ranjit Shahani seems to agree. “Given the mandate - this was a sterling opportunity missed to make structural changes - have a road map. Not only was the big idea missing but even the allocations made speak of the tokenism with which such an important topic has been treated with."
Taxing trials
Even the little that has been mentioned is either unclear or worrisome, say industry representatives. Indian Pharmaceutical Alliance’s DG Shah is concerned about the withdrawal of service tax exemption on testing newly developed drugs on humans. This would make clinical trials expensive for foreign companies doing such trials in India, even as it makes it more challenging for domestic companies trying to develop new drugs, he says. Another industry representative points out that the fluid regulatory framework has all but stopped clinical trials in India. And by making it more expensive, it tantamount to killing a dead duck, he added.
On the Finance Minister’s promise of free drugs and diagnostic services, Metropolis Healthcare’s Managing Director and Chief Executive Ameera Shah points out that some States already offer these services. Greater clarity is required on what the Government has in mind, she said, adding that the Budget also fell short on facilitating partnerships. The Government is continuing to play the role of the provider and not a facilitator, she said.
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