Medical Technology Association of India (MTaI), which represents leading research-based medical technology companies with large footprint in manufacturing and healthcare worker training in India, has welcomed the increase in health budget to Rs. 2,23,846 crore in Union Budget 2021-22.
MTaI Director Mr. Sanjay Bhutani said, “The Budget 2021 was presented amidst the unprecedented times of COVID-19 pandemic recovery. In the previous fiscal, entire fiscal management was shaken with the COVID-19 related lockdowns, job losses, financial stimulus and negative GDP growth. In this backdrop the government was faced with doing the balancing job between stimulating economy back to high growth trajectory, job creation and at the same time keeping check on inflation and fiscal deficit (9.5% in 2020-21). From the budget proposal, it seems that the government has done well in keeping with the investment focus and job creation through capital buildup. We also welcome the move towards raising healthcare spends by almost 137%, although a good part of this will go towards managing COVID vaccination etc. We are also happy to note that the government has announced the launch of ‘PM Atmanirbhar Swasth Bharat Yojana‘ with a total outlay of Rs. 64,180 crore over a period of next 6 years. This will help us with the much needed development of public healthcare systems.”
“The government has done well at showing restrain and not looked at introducing short term tax measures linked to tax mop up like cesses etc. though it was expected that it will take measures at rationalizing some high tax brackets to improve disposable income and boost spending. In terms of finding funds for the investment ramp up which is vital for revival of economy, the government is relying on funds from divestment, high GDP growth estimated with economic buoyancy post with COVID-19 slowdown and better degree of tax compliance and has also taken a longer-term target to reign in fiscal deficit with 2021-22 estimated at 6.8%. If these do not go as expected, the affect could be inflationary. A lot will depend therefore on the efficacy of execution, actual GDP growth, disputes settlement and government meeting its privatization targets. Overall, we feel it is a balanced budget that should provide long term tax rate stability, reduce cost of compliance and litigation and goes to building the infrastructure to support high growth,” added Mr. Bhutani.
MTaI Chairman & Director General Mr. Pavan Choudary said, “The government (DOP, MoHFW, DPIIT and MOF) gave us an equitable hearing and we are thankful for that. Though we still need to go through the fine print, the budget has put on hold any further increase on customs duty on most medical devices & equipment. The rolling back of the health cess is our other demand which will help us preserve jobs, jobs which are instrumental in making the healthcare workers become patient-ready at the time of a healthcare crisis like this. In similar expression of patient interest, we have also sought that the GST slab for medical devices be brought down from 12% to the rate of preferential products i.e. 5%. Though these demands have not been accepted yet, we are pleased to note that the budget is reflective of the realization that healthcare is a vital sector and the government is going in a thorough fact finding mode to make evidence based fiscal policy. We are quite sure that this mode will automatically throw up the real performances of various industry groups against their promises. Our performance as a cohort, despite the unintended consequences we faced is evident in this resurging tally of FDI especially since 1st January 2020.”
Mr. Choudary added, “Post pandemics the real estate and healthcare sectors come creatively together and therefore the stress on the former is also salubrious for the emerging epicenters of healthcare like homes, micro-hospitals and step up and step down facilities which will start dotting the healthcare landscape.
Both MTaI and our member companies like Medtronic and Stryker, just to name a few, have responded to the clarion call of our PM and have substantially enabled the MedTech startup ecosystem in India through open sourcing vital designs or providing legacy technical know-how, and we are really gratified to see meaningful support coming for startup finance in the budget. Overall it is a visionary budget.”
“To bring the healthcare system fully back on track we need to first of all protect our healthcare workers because it is through them the elective surgeries will come back on course. Part of this frontline team are the MedTech executives who visit Operation theaters and Emergency rooms and other facilities in hospitals daily as part of the procedure and demonstration teams. Due to the nature of their job, these frontline Medical Device workers may even be more susceptible to contracting the coronavirus than some of the other beneficiary groups chosen for vaccination, as they end up working in environments where the treatment of COVID patients is actually happening. When the security guard at the hospital is provided vaccination – which by the way is a commendable and inclusive step – these workers should also be included in the initial vaccination drives. The funding of this drive can come from the healthy INR 35,000 crores allocated, or even from the companies which employ them,” concluded Mr. Choudary.
About Medical Technology Association of India (MTaI)
Medical Technology Association of India (MTaI) is an association of research-based medical technology companies who have made significant investments in Manufacturing, R&D and Healthcare Workers Training in India. All the time stressing on the three hallmarks of healthcare – Quality, Consistency and Patient Safety, MTaI is a responsible voice of the industry. The association is committed to improving access to affordable and quality healthcare for patients.