Budget 2019

Push for affordable healthcare

NALINAKANTHI V | Updated on January 20, 2018 Published on February 29, 2016


India is the third-largest producer of medicines, yet barely a third of the country’s population has access of healthcare. Reason? One, affordability is still a challenge. Quality care at affordable prices is still a distant dream to patients in the lower strata. Two, unlike in the other developed and developing countries, the government spending on healthcare is among the lowest — India spends just about a per cent of its GDP on healthcare compared with peers such as China (over three per cent), Brazil (over four per cent) and Asia (over three per cent). While India still has a long way to bring quality care within the reach of economically weaker sections, the four key Budget proposals signal a move in the right direction.

One, opening of 3,000 Jan Aushadi stores, which will sell cheaper generic drugs, in 2016-17 will ensure availability of medicines to economically weaker sections at affordable prices. Besides improving dosage compliance of patients, it will also boost the revenue of pharma companies, supplying unbranded drugs to these stores.

Second, the government’s initiative to start a ‘National Dialysis Services Programme’ which will provide funding assistance to district hospitals for setting up dialysis centres will make the treatment affordable to poor patients. The funds for this programme will be made available through a PPP route as part of the National Health Mission. This move will help expand the number of dialysis centres from the current 4,950 and thereby potentially prolong the lives of the 2.2-lakh new patients who get diagnosed with end stage renal disease in India every year.

Besides this, the government has also announced a proposal to exempt certain parts of dialysis equipment from basic Customs Duty, excise/countervailing duty and special additional duty. While the objective of this is to make the procedure affordable to people in the low and mid income groups, hospitals that intent to/provide dialysis treatment will also benefit from this move.

Third, the proposal to eliminate service tax (14 per cent currently) on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability is a welcome move. This will go a long way in reducing the cost for the differently-abled people, who constitute about two per cent of country’s population.

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Finally, the government has proposed launch of a new health protection scheme which will cater to the hospitalisation expenses of about a third of the country’s population. The government envisages providing health cover of up to ₹1 lakh per family. And for senior citizens aged 60 years and above, an additional top up cover of ₹30,000 will be provided. While the final contours of the policy have not been made public yet, the effort to bring more people under the ambit of health insurance is commendable. This is not only positive for people who are now not covered by insurance, but also for hospitals and the healthcare industry as a whole as more patients will come under the treatment bracket.

Published on February 29, 2016
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