‘If we aspire to become a super power, govt should increase its health expenditure’

As India gears up for Budget 2018, healthcare industry looks forward for the government to allocate more of the GDP in health. While speaking to My Medical Mantra, health experts said, if India wants to become super power, it is important for the government to spend more on healthcare


  • In a joint sitting of the Lok Sabha and Rajya Sabha ahead of the budget session, President Ram Nath Kovind said the New ‘National Health Policy’ has been formulated for providing better and affordable healthcare facilities to the poor and middle class.
  • The healthcare industry is looking forward to the government to reduce tax levied on medical devices to make health care more affordable to public at large.

Dr Ravi Wankhedkar, National President of Indian Medical Association, said, “If we aspire to become a super power, government has to increase its spending on health. Even Sri Lanka, Bangladesh and Thailand are spending 4-5% of their GDP on health. China spends 6-7% of their GDP on health. In India, it is on 1 to 2 %. We hope that in upcoming budget, this goes up to at least 3 %.”

He further said the government needs to spend more on infrastructure for modern medicine. “If we see the last year budget, in the budget allocated to health, more budget was allocated for AYUSH. While we are fine with government spending more AYUSH, we also looking forward for it to strengthen infrastructure for modern medicine so that incident like BYL Nair Hospital’s MRI machine sucking up a patient relative can be avoided. We still have over crowded hospitals and we still need to strengthen primary health care,” said Dr Wankhedkar.

Debayan Ghosh, President and CEO of Epygen Pvt Ltd and also an ex-employee of Biocon also emphasised that healthcare spending needs a serious firming up.  He said, “Where US spends 17% and Europe or Japan spends 11% of GDP on healthcare, we are struggling to move up to 2.5% by 2025. Despite this 100% jump in recent times, we are far from global standards. Indian economy is banking on the confidence that stems from domestic consumption and well-being.”

Ghosh explained that while, ease of functioning and fiscal transparency promise has set the tune in the consumer’s mind, fundamental healthcare needs of the common man will remain vital. “Healthcare facilities reaching across the nation, affordable medication for critical noncommunicable disorders and vaccination programs will continue to demand focus. A proposed 11% increase in health budget, appears insufficient to boost this sector, resonating the tune that has been set,” Ghosh said.

The healthcare industry is also looking forward to the government to reduce tax levied on medical devices to make health care more affordable to public at large. Ameera Shah, MD and Promoter, Metropolis Healthcare said, “This year has been an important one for healthcare. Various initiatives ruled under the National Health Policy have helped in larger strata of the Indian population to access medical services at affordable prices. Post introduction of GST, the tax rate on medical devices was pegged at 12%, this, if reduced further can positively affect the overall cost structure thereby providing cost effective healthcare services to the society.”

She added, “The last budget had a lot of focus on policy direction and targets for elimination of chronic diseases and the government’s efforts are laudable. “In addition to increased spending, we also hope that this year’s budget will address the National Health Protection Scheme and set impetus to generate demand for health insurance through additional exemptions.”

Dr P M Bhujang, President, Association of Hospitals (AoH) said, “The healthcare services have played a major role in nation building with the governments focus on developing more and more hospitals in the country. In order to meet this objective it is important that the services rendered to hospitals should keep away from the ambit of GST. The hospitals should be allowed to claim refund of GST on inputs as it will help the healthcare industry in cost optimisation by making the healthcare more affordable.”

“Charitable hospitals should be exempted from GST/Central Excise/Service Tax on supply of disposable, medicines implants, stents and lenses. “This is needed so that more indigent and poor patients can be provided free and concessional medical services, as more funds will be available to serve more needy patients. The exemption on GST on the inputs will reduce the cost to the hospitals and consequently cost of medical services to a patient,” said Dr Bhujang.

Joy Chakraborty, COO, P. D. Hinduja Hospital said, “Through the years, India’s Healthcare industry has successfully established itself as one of the top players in the world. We are an industry that provides global standards of quality care, latest medical technology, top-notch medical professionals and contribute a fair share towards research in the medical field. However, there are certain parameters that we are yet to overcome – the lack of
infrastructure to reach a majority of India’s population and a lack of skilled professionals has
severely impended the growth of the industry. Out of Pocket expenditure is still a major concern, in
contrast to the steady increase in the purchasing power amongst the working population.”