Government should substantially increase the healthcare budget allocation: A Ganesan, Vice Chairman, Neuberg Diagnostics

Shahid Akhter, editor, ETHealthworld, spoke to A Ganesan, Vice Chairman, Neuberg Diagnostics, to get his views on the upcoming Budget and his expectations.

Expectations from the Union Budget 2021
The pandemic has impacted the people's mindset as far as health care spending is concerned. The key aspects are :

Most people have postponed their discretionary spending, such as surgeries, which are not important from their perspective. Also, they have started saving resources if they get infected by Covid so that they can spend the money on testing and treatment. Hence, discretionary spending has come down in the last nine to ten months.

With Covid infection coming down significantly and more number of people getting vaccinated, we expect that a significant peak will be there in the discretionary spending as far as healthcare is concerned in the next one to two years. We also expect that people will allocate their additional resources in preventive health checkups, wellness checkups, insurance, incremental insurance coverage etc. And in the last eight to nine months, the corporates have substantially slashed their budget in terms of wellness checks and pre-employment checks, so all these aspects will probably be restored. They will start spending a significant portion of the money into healthcare spending for their employees provided the second wave of infection doesn't happen in India. Also, because of the penetration of vaccination, more and more people will probably start coming to the hospitals, labs and then spend on their wellness and other health preventive checks.

Overall, the health care industry expects the pent-up demand to be satisfied in the next 8 to 10 months. With a significant increase in government spending, state government spending, central government spending, and corporate spending on healthcare, we expect substantial increase in revenue and the earnings of the healthcare industries.

We expect significantly larger allocation in the budget this year keeping in mind the pandemic country is going through. In the union budget of 20 – 21 the central government allocated close to 70,000 crore for healthcare, we hope that government of India substantially increase this allocation by at least 15% to 20%. Similar allocation should happen from state government also that is our expectations from the state and central government.

Wishlist:
GST on all supplies and services to Hospitals and Laboratories should be removed. Hospitals and labs have no output GST liability and hence the input credits cannot be availed by the Lab. In case the GST is abolished on supplies to Hospitals and Labs, the price to consumers will come down significantly.

As per section 80-D of Income Tax Act, premium paid by the individual taxpayers are allowed as deduction subject certain maximum amount, depending upon the age of the taxpayers. The maximum amount of deduction should be increased substantially to all categories of taxpayers.

As per section 80-D, Preventive Health check expenditure up to a sum of Rs 5000 can be claimed as deduction, but this deduction is allowed subject to overall ceiling fixed. There must be a separate deduction and the expenditure incurred has to be increased to Rs 15,000 and should be extended to the spouse of the taxpayer. This benefit should also extended to the spouse of the taxpayers.