Budget 2018-19: Healthcare startups ask more fund allocation for Ayushman Bharat, demand modernisation of primary health care

In the interim Budget, there was an announced a Rs 61,398 crore budgetary allocation for the health sector for 2019-2020 fiscal, with Rs 6,400 crore earmarked for the centre’s ambitious AB-PMJAY health insurance scheme. The health outlay for the upcoming financial year is the highest in the last two financial years and a 16 percent increase over the 2018-2019 allocation which was Rs 54,302.50 crore. The Union Budget for 2019-20 saw an allocation of Rs 6,400 crore for the Centre’s Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) which was launched by Prime Minister Narendra Modi in 23 September. But more needs to be done, say health care startups from tax cuts for essential medical equipment like crutches, wheelchairs to additional fund allocation for Ayushman Bharat scheme.

Meena Ganesh, MD & CEO, Portea Medical

It is heartening to see how the government has been promoting healthcare startups in India and increasing the spending on healthcare. However, it comes as a disappointment to observe how life-saving equipment such as ventilators, BIPAP and CPAP, etc. have been placed under heavy taxes. Even something as basic as crutches and wheelchairs have been put under the 5 percent to 7.5 percent GST bracket. These are essentials and should not have been taxed. It is perplexing to see how the medical equipment spare parts are being taxed under the highest slot of 28 percent GST. This is highly debilitating for the healthcare industry. We hope that there will be a critical evaluation of the situation and that there will be serious thought given to making healthcare essential equipment tax-free.

Vivek Tiwari, CEO & Director MedikaBazaar, a B2B online marketplace for medical equipment and supplies

The Budget should be dedicated to healthcare this year and a significant increase in its GDP allocation is wished for. Economic evidence confirms that a 10 percent improvement in life expectancy at birth is associated with a rise in the economic growth of some 0.3-0.4 percentage points a year. With Ayushman Bharat as a focus area, the government should do everything in its power to enable an ecosystem where this scheme can get large scale acceptance in the health industry. This can surely be achieved by introducing schemes to fund the working capital for private medical establishments especially in tier 2, 3 cities, and rural areas which will boost growth to meet the rising demand of Ayushman Bharat scheme. Additionally, with regards to Ayushman Bharat, the government should work towards adequately and promptly reimbursing member hospitals which will encourage other hospitals to join the program benefiting poor at large. Increased expenditure on R&D of medical devices coupled with quick approvals for new medical device innovations and increase in medical seats will boost cure and care experience for professionals and patients. Also, a more favorable GST for the entire healthcare ecosystem will go a long way towards helping make healthcare more affordable.

Rajat Garg, Co-founder & CEO, myUpchar, local language health content app

In this Budget, specific effort should be made to modernise primary health care which will enable healthcare access for hundreds of millions of users. Given the lack of doctors in public health centres, public health centres, they are currently not able to serve their purpose. Leveraging video conferencing and diagnostic tools, doctors can remotely diagnose the patient and assist with providing basic services across the country.

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While the demand for co-working spaces continues to rapidly across India, there are some key changes that co-working firms are expecting around GST and taxation in the upcoming Budget. Input tax credit under GST is an important issue that concerns the sector. The companies are expecting that the government would enable co-working firms to claim input credits on work contract and construction services supplied, as detailed under GST provisions. This would check the increased outflow of cash that co-working firms are currently experiencing. The firms are hoping that input tax credit under GST be extended to developers so that it is passed on to companies who lease out space and thereby reduce their overall costs. This would significantly aid the faster growth of co-working business in the country.

Co-working firms are also expecting that the government would curb or altogether eliminate angel tax in this Union Budget as it would enable the firms to lease more spaces for start-ups, enterprises, MSMEs and entrepreneurs. Angel tax, many believe would destroy the start-up edifice and indirectly co-working firms would desist from leasing co-work spaces. Angel funding is now being considered as income and is being taxed at the full income tax rate of 30 percent. This will detract higher investment in co-working spaces.

Varun Gera, HealthAssure, primary healthcare aggregator

The current healthcare system is now in the spotlight from social as well as political needs and requires more funds and attention. The pre-poll announcement of Ayushman Bharat now requires allocation of funds and implementation on both inpatients as well as outpatient commitment. I expect the NDA government to bite the bullet and at least triple the government healthcare budget over the next two years from low of 1.2 percent currently. There are many countries with high costs and inefficient healthcare operating systems. For this reason, apart from allocating appropriate budgets, it is important for the government to initiate appropriate building blocks, take the right decisions and good implementation in this sector to further develop the healthcare ecosystem in India.

Savitha Kuttan, Founder & CEO, Omnicuris, online digital Continuous Medical Education (CME) startup

We are looking forward to a positive turn out from the Union Budget 2019 for start-ups and emerging entrepreneurs, especially in the health tech domain. The government should come up with a medical innovation fund separately to boost health tech startups and do away the outdated taxes that are hampering their growth potential. We are hoping that the re-elected Government should continue doing their good work for the start-up with conducive policies in the upcoming budget. The government should also address the GST compliance by reducing the tax rates. This move will help to create a more welcoming ecosystem for the startups.

Ajoy Khandheria , Founder, Gramin Healthcare

Ensuring accessible, good quality healthcare in rural India remains the biggest challenge in the healthcare sector. The government needs to direct financial resources to build the primary healthcare infrastructure in rural and remote areas, and that is difficult unless public spending on healthcare goes up from 1.15 percent. When over two-thirds of the sector is driven by private players, the government should be more willing to get into a partnership based approach with them to achieve universal health coverage in line with the UN’s sustainable development goals. We also want the government to increase the tax exemption for preventive health checkups and promote preventive care practices to bring down the disease burden of non-communicable diseases, which are currently responsible for 61 percent of deaths in the country. We also need their support to help reduce our dependence on China for Active Pharmaceutical Ingredients. It will bring down the manufacturing cost and market price of drugs, and make them more affordable for people living in remote/rural areas.

Dharminder Nagar, MD, Paras Healthcare

We need a multi-pronged approach from the government to strengthen and reform the healthcare sector in India. On the one hand, it involves improving the state of public healthcare by increasing budgetary allocation, establishing more medical colleges and improving primary healthcare facilities. On the other hand, it involves measures to enable the private sector spread its presence beyond the urban landscape. This will help in improving accessibility for secondary and tertiary care in tier 2/3 towns and rural areas. For the latter to happen, the government must offer major incentives and tax breaks to private healthcare organizations setting shop in non urban areas. These incentives can include income tax breaks for first few years of operations, help in procuring land, making medical equipment GST free for such hospitals and relaxation on service tax on hospital inputs. Similarly, establishing a mechanism to offer fund support or subsidization in treatment cost to private hospitals in smaller towns and rural areas can go a long way in bridging the accessibility gap.

At the same time, the government must also establish mechanisms to take private hospitals on board for Consultations to increase their participation under the Ayushman Bharat scheme. Rationalization of treatment packages and speeding up the recovery process are essential elements that will encourage more private hospitals to empanel under the scheme.