Budget 2019: Holistic, but disheartening for healthcare

By Kiran Mazumdar-Shaw

Finance Minister Nirmala Sitharaman presented a forward-looking, holistic Budget that focused on a collective dream of building an inclusive, sustainable and robust Indian economy, commencing its journey from $2.7 trillion to $5 trillion by FY25.

Some of the key areas addressed in the budget such as the startup ecosystem, rural infrastructure, agrarian economy, skilling of rural resources, etc. were commendable.

The Finance Minister’s proposal of upskilling and re-skilling millions of Indian youth to cater to new age technologies is commendable. The Government is looking at training 10 million youth in various new age skill sets that are in huge demand abroad and is witnessing growing demand in India, including Artificial Intelligence, Internet Of Things, Big Data, 3D printing, and Robotics. She also sought to resolve the controversy over the ‘angel tax’, by saying that startups and investors will not have to undergo any kind of income tax scrutiny on their valuation if they are verified by the government. She added that a mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny.

The Budget also proposed to set up the National Research Foundation to boost innovation in India. The foundation will fund, coordinate and promote research in the country and will ensure zero duplication on research spending across the country. Furthermore, it proposed to spend Rs 400 crore for building world-class institutions in this year's budget, which I feel is a step forward in the direction of establishing India as a global hub of higher education.

The government’s initiative on water management to provide access to clean drinking water for all rural households by 2024 as a part of the Jal Jeevan Mission is timely. While looking at innovative ways of water management the Jal Shakti Ministry must also focus on reducing water pollution in the country. One of the significant ways is to invest in Sewage Treatment Plants across the country as an extension of ‘Swachh Bharat’ Mission.

However, this being the maiden budget of the newly formed Government, expectations were that the FM will introduce bolder steps to kick start virtuous cycle of investment leading to long term economic growth.

The journey towards a US$ 5 trillion economy requires a strong public-private partnership and India Inc. could have enabled this if the Corporate Tax reduction was offered to all. It would have spurred investment and buoyed the capital markets sentiment.

Furthermore, it was quite disappointing to see the absence of any reference to the healthcare sector. Ayushman Bharat, the flagship program of the Modi Government, introduced last year needed more attention in terms of fund allocation. The exemption of GST from health insurance is the need of the hour that required the government’s intervention to make health insurance affordable. Going forward the 100% FDI in the insurance sector will hopefully lead to greater health insurance penetration. The only relief in healthcare services this year is an increase in the tax deduction limit for senior citizens for medical expenditure for critical illnesses from Rs. 60,000 to Rs. 1,00,000.

Overall, Budget 2019-20 is a promising one from the perspective of the rural economy and the startup ecosystem, which is a step in the right direction.

Kiran Mazumdar- Shaw is the CMD of Biocon.