Bioscience stakeholders hail #Budget2020 yet few call it short of expectations

While most of the stakeholders cutting across various verticals of the bioscience sector have hailed the budget, many of them at the same time feel that the fund allocations could have been better

The Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman along with the Minister of State for Finance and Corporate Affairs, Anurag Singh Thakur arrives at Parliament House to present the General Budget 2020-21, in New Delhi on February 01, 2020.

New Delhi: The ‘Budget 2020’ has been welcomed by most of the stakeholders of the bioscience sector, especially healthcare experts and agriculture sector players. The comparatively bigger allocation for science and technology this time has come as a big relief for the research and development institutes and bio-suppliers.

As per experts, the emphasis on healthcare is pleasantly taking a larger wellness initiative. The continued push will spur growth in all parts of the sector, healthcare, innovation, and wellness services. The proposal to set up hospitals in PPP mode in 112 districts is likely to encourage the much-needed investments in the sector. This, coupled with the focus on increasing the empanelment of hospitals will also provide thrust to Ayushman Bharat scheme. Furthermore, the proposed viability gap funding for setting up medical colleges adjacent to the existing district hospitals will help address the shortage of skilled medical professionals.

Though the health cess of 5 percent on import of medical equipment will augment resources for funding of expenditure on the healthcare sector, the hike will increase the cost of equipment, which is a near term negative for the players.

Agri stakeholders welcome new initiatives 

The adoption of 16 point agenda showcases a comprehensive coverage of the agriculture sector and an overall vision towards the transformation of the sector. The same is reflected in the increased allocation of 1.6 lakh crores towards the agriculture and allied sector. Agriculture and allied sector remains a focus for the current government. Among others, the Blue Economy initiative is a good move towards organizing the aqua sector and creating capacities across the value chain.

“Prioritizing agriculture and healthcare under the aspirational theme of our budget is proof that the government is looking to resolve the two biggest challenges our country faces in a much bigger way. Providing affordable and accessible healthcare and boosting farmer incomes will be key to building India’s economy. Leveraging science and technology will only accelerate our efforts in doing so,” said Professor Suresh Subramani, Global Director of the Tata Institute for Genetics and Society, a Bangalore-based institution.

As per KC Ravi, Chief Sustainability Officer, Syngenta India, “The 16 point agenda for Agriculture is comprehensive, and coupled with Re 2.83 lakh cr allocation could prove to be the much-needed boost for this vital sector. The announcement regarding incentivizing states which adhere to and implement “Model Agriculture Laws” is an important one and hopefully would bring in the right incentive for more public-private partnerships and the introduction of new technologies. Hopefully, the enhanced allocation and the announcement would translate into tangible programs where there is deployment of cutting edge scale neutral technologies in seeds, crop protection and other inputs to boost agriculture growth as well as to achieve the government’s objective of doubling farmers income by 2022.

The high focus on water and the program to provide solar pumps to 20 lakh farmers shall go a long way in addressing their irrigation concerns. FCI and Warehousing Corporation of India will increase warehousing capacity, the new village storage scheme to boost backward linkage is further laudable. This move will empower small and marginal farmers. The extension of the NABARD refinances scheme and Rs 15 lakh crore allocation for the Kisan credit card scheme are also anticipated to strengthen the agriculture credit system.

In his comments, Mr Ajay Kakra,  Leader – food and agriculture, PwC India, mentioned, “Systematic coverage of agriculture sector through the 16 point agenda reflects an definite intention to bring fundamental development in agriculture and allied sector. Covering allied sector and important thematic areas can surely work towards aspirational agenda of the government.”

 “The initiative to develop ‘Kissan Rail’ for  transport of perishable goods is a visionary move that can change the basic functioning of the cold chain industry. It will be revolutionary not only for India but all developing countries across the globe,” Mr Kakra added.

Focus on healthcare skill development is good, allocations could be better

“The Finance Minister presented a holistic budget especially from the perspective of enhancing access to healthcare in the country,” said Mr Nalinikanth Gollagunta, Managing Director, Wipro GE Healthcare, while adding “The increased allocation to healthcare and specific focus on addressing the healthcare infrastructure gap specifically in tier 2 and tier 3 cities through PPP mode hospitals being planned to be set up under viability gap funding will significantly help us achieve our goal of Ayushman Bharat. Elimination of Dividend Distribution Tax along with incentives directed towards medical devices companies under electronics manufacturing will a big push towards ‘Make in India’ efforts for medical technology.”

In her reaction, Ms Zoya Brar, Founder, and CEO, CORE Diagnostics, said, “It is encouraging to see over 10% increase in the allocation of funds to the Healthcare sector for the budget 2020-21. While there has been no significant announcement pertaining to diagnostics industry, it is good to see the government’s growing focus on PPP mode ensuring accessibility and availability of quality healthcare services in remote locations. We are intrigued about how the government will use the fund of Rs 6400 crores allocated exclusively to Ayushman Bharat to the benefit of the people residing in Tier II and III cities.” The expansion of government’s existing programme – Mission Indradhanush – to cover 12 new diseases and 5 new vaccines would be extremely beneficial in order to drive immunization across the country.

“The focus on strengthening the healthcare infrastructure is a welcome move especially at tier II and tier III cities as this will be critical to increase the impact of Ayushman Bharat. The Bridge course for reducing the gap in healthcare skilled workers needs to be fast-tracked to meet the domestic demand first – the budget doesn’t seem to address what steps will be taken to strengthen primary healthcare infrastructure.” says Dr Vikram A Munshi, Founder, WhiteSpace, “An increase in allocation to healthcare sector, to INR 69000 crores, is always welcome, however in proportion in GDP, I hope that they can reach at least up to 2.5 % of GDP for healthcare.”

Mr Gaurav Gupta, Co-founder, Navia Life Care feels that the budget has got right ingredients to help his kind of startups to attract and retain talent. “While acknowledging the importance of Indian startups in job creation, Finance Minister, Nirmala Sitharamanan in her budget speech proposed several measures to boost the startup ecosystem like establishing a seed fund for early-stage startups and deferment of tax on ESOPs given to startup employees.”

Gaurav, however, also believes that India can do better in terms of fund allocation for the healthcare sector. He elaborates, “Even though the budget allocation of 69,000 crores to the healthcare sector represents about a 10.5% jump from 2019 in absolute terms, India’s public healthcare spending still stands at a little over 1% of GDP and it has a long way to go in comparison to other developing  countries where public healthcare spending stands at around 2-2.5% of GDP.”

Dr Raajiv Singhal, Group CEO of Care Hospitals, “We welcome the Finance Minister Nirmala Sitharaman’s emphasis on healthcare as a key agenda, and acknowledging the need to expand healthcare delivery beyond the metros and cities to Tier 2 and 3 towns. While the outlay for healthcare has been increased from INR 62,659 crore last year to INR 69,000 crore, we still have a long way to cover to achieve at least 2.5% of the GDP on healthcare spend.”

Mr Sudarshan Jain, Secretary-General, Indian Pharmaceutical Alliance called the incentives in terms of using taxes on medical devices in order to build the healthcare ecosystem and additional hospitalization facilities in tier 2 and 3 through Ayushman Bharat as commendable. “The other initiatives that will really give India a competitive edge in the global healthcare market would be the New Export Incentive Scheme, making the manufacturing process indigenous aligns with the Make in India and Discover in India narrative, providing impetus to local manufacturing, handholding support for R&D, medical colleges attached to district hospitals and upskilling program for paramedical personnel will also play a major role in scaling the healthcare infrastructure in the country. The overall thrust on ease of doing business in terms of regulatory simplification and policy stability should help to realize the potential of the industry going forward.”

Dr Chandrakumar, Executive Chairman & Managing Director, Kauvery Hospitals, says “It is really encouraging that the government is trying to promote growth of hospital infrastructure through PPP mode across 112 districts in tier 2 and tier 3 cities, through Viability Gap Funding Window, which will help in improving the accessibility of quality healthcare. We are happy to see the support extended towards developing and improving the skill sets of teachers, nurses, para-medical staff and care-givers.”

As per Mr Sameer Sah, Partner, Khaitan & Co, “India imports significant parts of its medical devices requirements.  While 100% FDI in medical devices manufacturing has been open for a while, it remains to be seen how the new scheme for electronics’ manufacturing will play out, and more importantly how will this scheme be customized to encourage medical devices manufacturers to make in India.”

“Tier 2 and Tier 3 markets definitely represent one of the biggest opportunities for entrepreneurs in healthcare, but capital is not easy to generate.  The viability gap funding suggestion will encourage private entrepreneurs and local doctors to setup hospitals in such areas and expand the healthcare reach,” Mr Sah added further.

In his reaction, Mr Rishi Chandiok, Regional Director (South Asia), QNET Ltd, mentioned, “This is a positive budget with good balance supporting the digital revolution, industry and individual citizen. The allocation of 69,000 crores towards better healthcare for tier 2 and 3 towns, is a welcome move. The government’s focus on promoting entrepreneurship through better policy and better access to funding will boost innovation in the country. Reduction in personal tax will boost saving and enhance spending power of the middle-income group. Overall, we are positive about the measures taken in the budget to take our economy forward.”

Mr Shireesh Sahai, CEO Wolters Kluwer India, said, “We commend the government’s focus on strengthening the Healthcare sector. We are glad to see the government’s plan to increase the number of medical colleges at district level with special training packages for doctors. This will help towards reducing the shortfall of trained healthcare professionals in the country. We hope that the government will accelerate implementation of the country’s digital health infrastructure as envisaged in the National Digital Health Blueprint. Also important is the investment in digital tools to supplement the new competency based curriculum as part of the special training packages for doctors. We also believe that investment in evidence based health technology solutions if provided in medical colleges and hospitals, can significantly improve patient safety and health outcomes.”

According to Shubham Jain, Group Head & Senior Vice President, Corporate Ratings, ICRA Ltd,  “At Rs. 67,484 crore, the budgetary allocation for the healthcare sector for FY2021 will translate into a modest 5.7% increase vis-vis revised estimate of Rs. 63,830 crore for FY2020. With a nominal estimated GDP growth of 10%, this also translates into a fall in the public healthcare expenditure as a percentage of GDP. Thus, the public sector spend on healthcare will continue to lag, at below ~1.5% of GDP. Also, the increase in healthcare spend was a healthy ~15% in the previous budget and the current allocation is much below expectations.

The increased funds for science and data analytics welcome

The Department of Science and Technology has got a 14 percent raise, at Rs 6,301 crore, over its expenditure last year and the Council of Scientific and Industrial Research got a 10 percent hike at Rs 5,385 crore. With an outlay of Rs 2,786 crore, Department of Biotechnology (DBT) registered a big hike from the allocation of ₹2,381 crore last year.

The investment of Rs 8,000 crore for National Mission of Quantum Technology and Application is another noteworthy announcement for the healthcare industry. Analytics, IoT and AI are integral part for the growth of the industry and look forward to the implementation of this fund for R&D in the healthcare sector which will further result in innovations and advancements.

“As the Finance Minister rightly said, data is indeed the new oil. It is promising to see the improved attention from government on this subject in form of their support to the private sector in building data centre parks throughout the country. I’ve also spoken about the importance of genetic mapping and the announcement of the two national level schemes will ensure protection and bring more structure to the abundant national level database that we as a country already possess,” concluded Ms Zoya Brar, Founder and CEO, CORE Diagnostics.