Vaccines have emerged as the “best shield” against Covid to save lives and sustain livelihood, said the Economic Survey. And India’s vaccination drive should be viewed as a macro-economic indicator, as it has become critical to re-igniting economic activity.
Outlining the Centre’s “agile, strategic and pre-emptive” response to cope with uncertainties thrown up by the pandemic, the survey noted that it was not just the production of vaccines locally, but also its administration across the country that made the difference.
Jump in FDI
Significantly, the pharmaceutical industry appeared to have got a booster dose, with foreign direct investment in the sector seeing a “sudden spurt in FY21 vis-a-vis the previous year, showing a 200 per cent increase”, according to the survey.
“The extraordinary growth of foreign investments in the pharma sector is mainly on account of investments to meet Covid-related demands for therapeutics and vaccines,” it added. In April-September 2021, FDI inflows stood at ₹4,413 crore, 53 per cent more than the same period in 2020.
V Ashok, Group Chief Financial Officer (CFO), ACG, is not surprised by the FDI increase.
“Most of them are formulation companies that got FDI. All of them have got funds for Covid medicines, other drugs, for increasing capacities..,” he told BusinessLine.
Focus on healthcare
“The Economic Survey has rightly considered vaccination as a macro-economic parameter. India’s highly successful vaccination drive has been a big protection and a confidence booster. We believe that going forward, continued reforms, focus on capital expenditure, continuous strengthening of our healthcare systems and the micro containment strategy to ensure minimal supply chain disruptions will all act as a booster dose to the economy, enabling India to grow at sustained high rates,” said Chandrajit Banerjee, Director General at the Confederation of Indian Industries (CII).
“The increased spending on health augurs well for the entire country. While some part of this was pandemic-induced, it must be lauded. We hope India continues on this trajectory so that the penetration of quality healthcare services reaches the lowest strata of the society,” said Santanu Mishra, co-Founder and Executive Trustee, Smile Foundation.
Pointing out that the health sector had been worst hit during the pandemic, the survey said expenditure on health increased by 73 per cent to ₹4.72-lakh crore in 2021-22, as per Budget Estimates, from ₹2.73-lakh crore in 2019-20.
It also pointed to the Ayushman Bharat Health Infrastructure Mission, a new centrally sponsored scheme, with an outlay of about ₹64,180 crore in five years to develop capacities of primary, secondary and tertiary health care systems
Keeping in mind the committed health spend of 2.5 per cent of GDP by 2025, the survey said that between Central and State governments, budgeted expenditure on health reached 2.1 per cent of GDP in 2021-22 against 1.3 per cent in 2019-20.
The survey said that during 2020-21, total pharma export stood at $24.4 billion against imports of $7.0 billion. However, it highlighted the country’s dependence on the import of bulk drugs that are used in the formulation of medicine, which varies between 80-100 percent in certain cases. This issue of import dependence for critical bulk drugs was examined by a high-level committee and a composite set of actions to incentivize bulk drug production has been initiated, said the survey.