Budget 2024: Healthcare sector expectations from upcoming budget

Ahead of the Union Budget 2024, the healthcare industry expects several measures, including higher allocation and rationalisation of Goods and Services Tax (GST), to boost growth.

The healthcare industry hopes Finance Minister Nirmala Sitharaman will announce sops for the sector amid expectations of higher allocations for schemes like Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and vaccination and disease control programmes.

Union Finance Minister Nirmala Sitharaman will present the maiden Union Budget of the Modi 3.0 government on July 23.

A higher allocation for the health sector will benefit all stakeholders in the healthcare industry by accelerating growth. The industry insiders also seek the government's attention to address some of the concerns and to announce new initiatives in Budget 2024. The healthcare industry seeks tax incentives, rationalisation of GST, lower import tariffs on diagnostics equipment, and a boost for faster adoption of technology.

The outlay for the health ministry in the Interim Budget increased by 13%

In the Interim Budget in February this year, the government raised the outlay for the Ministry of Health and Family Welfare by 13% to ₹87,657 crore for the financial year 2024-25. The Ayushman Bharat Scheme's proposed outlay was increased to ₹7,500 crore. A proposal was floated to bring Accredited Social Health Activists (ASHA) and Anganwadi workers under the fold of Ayushman Bharat Yojana.

Now, it is likely that in this upcoming Budget, Finance Minister Sitharaman will expand the ambit of the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) by increasing its coverage to include senior citizens above 70 years of age and transgenders. This was also one of the key points in the BJP's poll manifesto for the Lok Sabha elections in 2024.

PMJAY outlay likely to be raised to ₹10,000 crore

Experts believe the government will increase the outlay for the AB-PMJAY to ₹10,000 crore in the Full Budget for FY25, include more families, and bring medical conditions under the scheme's ambit. Currently, the government gives a cashless coverage of ₹5 lakh to a beneficiary family on a floater basis in its network hospitals across the country under this scheme.

National Health Authority (NHA) data suggest that 34.5 crore people have so far benefited from this health insurance scheme, which allows free hospitalisation and treatment at empaneled hospitals under the Ayushman Bharat Yojana.

Focus on the vaccination programme

The government may also make a concerted effort to promote adult vaccination after several health experts proposed raising awareness about vaccines for adults, such as the influenza or cervical cancer vaccine.

There is a need for increased awareness about the importance of influenza and cervical cancer vaccines and to provide these vaccines either free of cost or at subsidised rates, according to health experts.

Healthcare sector expects tax relief and measures to boost growth

The healthcare industry expects a higher outlay, which could boost growth for all stakeholders. The high out-of-pocket healthcare expenditure remains a major challenge for the industry. As a large section of the industry is still recovering from the ravages of the COVID-19 pandemic, initiatives by the government to reduce healthcare costs could catalyse growth.

Industry leaders also seek GST rationalisation and address the issue of many service providers' lack of input credit. The diagnostics segment looks forward to support for more technology adoption and GST parity across test categories and lab services.

Healthcare sector experts suggest that strengthening infrastructure will help enhancing services in rural and semi-urban areas providing equitable access to people. Another area of focus for the government in the upcoming Budget should be the medical technology and consumables, according to experts. As India is still highly dependent on imports for medical devices, the industry insiders seek tax relief and to incentivise domestic manufacturing. According to industry estimates, India imports over 80% of medical devices.

The Finance Minister’s announcement on vaccination against cervical cancer in the interim budget was a major boost for the sector. The government proposed to roll out the cervical cancer prevention programme in three phases in the next three years for girls aged 9 to 14. As FM Sitharaman presents the Union Budget 2024 on July 23, all eyes will be on how the government carries forward the initiatives announced earlier to ensure better health services for all.