Healthcare and Lifesciences
Impact of the budget on the healthcare sector
09 Feb 2024

The Union Ministry allocated INR 90,658 Cr to healthcare, marking a 1.7% increase from INR 89,115 Cr in 2023-24. While this increase falls below some expectations, it nonetheless represents a positive step forward in addressing critical healthcare needs and aligns with the government's vision of "Viksit Bharat 2047". This budget lays the groundwork for further progress in the sector. Key updates about the impact of the budget on the healthcare sector in India are summarized in Exhibit 1 below.

Implications for India’s healthcare sector
  1. Boosting domestic production: The interim budget has increased allocation for the PLI scheme by 33% from INR 4,645 Cr in 2023-24 to INR 6,200 Cr in 2024-25. Additionally, funding for Biotechnology research has more than doubled from INR 500 Cr in 2023-24 to INR 1,100 Cr in 2024-25. The availability of funds will enable companies to establish domestic manufacturing and research capabilities that can serve international markets.
  2. Digitization of health services: As a part of ‘Mission Indradhanush’ (est. 2014, to increase immunization coverage), the government is planning to nationally roll out ‘U-Win’, a digital platform to manage immunization records. Digitization of health records in a standardized fashion is likely to aid the country in public health research initiatives (e.g., serosurveillance) and enhance coordination of care amongst different healthcare bodies/professionals.
  3. Bolstering infrastructure: Allocation for ‘Pradhan Mantri Ayushman Bharat Health Infrastructure Mission’ (PM-ABHIM) almost doubled from INR 2,100 Cr in 2023-24 to INR 4,108 Cr in 2024-25. Additionally, the govt. has decided to set up more medical colleges by utilizing the existing hospital infrastructure. Overall, these initiatives are expected to improve the doctor-population ratio beyond the WHO’s recommended targets of 1:1000 (doctors to population) while also addressing issues about rural health infrastructure.
  4. Emphasis on maternal and child health: To enhance healthcare access for women and children, the government is upgrading rural childcare centers (‘Anganwadi centers), merging maternal and childcare schemes into a unified program, and promoting cervical cancer (HPV) vaccinations for girls aged 9 to 14. Cervical cancer is the second leading cause of cancer deaths among Indian women, with 25% of global cases occurring in India. This focus on maternal and child health presents an opportunity for healthcare companies to tap into underserved regions by offering cost-effective solutions.
  5. Expanding health insurance coverage: Allocation for ‘Ayushman Bharat’ (PMJAY) to increase by 4% from INR 7,200 Cr in 2023-24 to INR 7,500 Cr for 2024-25. Furthermore, coverage under the scheme will be extended to all ASHA workers and Anganwadi workers. Increasing insurance coverage implies an increased patient pool leading to an increase in demand/usage of key medical services including diagnostic tests, surgeries, and consultations.
In conclusion, the 2024 interim budget offers promising advancements for India's healthcare sector. The focus on domestic production, digitization, infrastructure, maternal and child health, and insurance expansion presents exciting opportunities for stakeholders across the ecosystem. Despite these positives, certain expectations remain unaddressed including, but not limited to, expansion of insurance coverage to outside-of-hospital care, funding for mental health services, and recognition and support for alternate medicines (e.g., Ayurvedic medicines) that can act as cost-effective preventative measures for patients. Ultimately, the budget represents a step towards building a more robust and accessible healthcare system.

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