Budget 2020: What the healthcare sector expects

Budget 2020: What the healthcare sector expects

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By ICRA Ltd

India currently has seven beds per 10,000 population, against the global average of 27 beds per 10,000. Given the paucity of beds in the country, higher tax incentives to private sector investments in modernising medical facilities and developing green field hospitals will be a welcome step. This will boost the much-needed investments in the sector, and the infrastructure developed can also be utilised to cater to the growing medical tourism in the country, generating employment and export revenues.

Here are some of the other things that need to be looked into:

•             The allocation on the healthcare sector in the budget is required to increase sharply to enable the Government to achieve its target of spending 2.5% of GDP on healthcare by 2025 from the current ~1.3%.

•             Public sector investment on healthcare in India is one of the lowest globally, at ~1.3% of GDP. In the absence of significant increase in allocation on the healthcare sector in the budget, India would continue to lag in healthcare expenditure.

•             The budgetary outlay for the Rashtriya Swasthya Bima Yojna (RSBY), the flagship health insurance scheme of the central government remains low (Rs. 6400 crore in BE 2019-20) vis-a-vis its funding requirement. Increase in the budgetary support to the scheme will help expand the network and the coverage, while providing affordable healthcare facilities to beneficiaries. The same is also expected to be positive for hospitals in Tier II and III cities and smaller towns, particularly for those that have low occupancies or those that are positioned for affordable care.

 

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