Introduction
The growth that the healthcare sector has achieved in the last couple of years is thanks to the combined efforts of the private sector and the initiatives introduced by the government. 2024 saw the healthcare sector become one of India’s largest employers in the country, with close to 7.5 million people employees under it.
With its healthcare vision of 2047, the country is looking to increase the number of qualified doctors and nurses. Another aspect of this vision is to add three million more beds, build a medical college in each district of the country and enable digital access to healthcare facilities among other things. It is important to keep in mind that healthcare forms a very important aspect of any country’s development and by making healthcare a key focus of the Union Budget 2025, the goals stated above can be achieved more efficiently.
When it comes down to analyzing how the budgets since 2012-13 have affected the healthcare sector, it can be noticed that with every single budget, the expenditure for the Department of Health and Family Welfare has grown steadily. According to the Center for Development Policy and Practice, this growth was observed at a 12% annual growth rate.
In the budget 2012-2013, the allocation for the sector was ₹25,133 crore from which it went to ₹86,175 crore in 2023-24. The Union Budget for 2024-25 saw an allocation of ₹90,171 crore to the healthcare sector to focus on making healthcare more accessible and the infrastructure more advanced. This, in itself, demonstrates the government’s commitment towards the improvement of the healthcare sector.
Key Expectations for the Healthcare Sector
With the Budget 2025 just around the corner, there are certain expectations that healthcare stakeholders have from the government. Some of these include an increased focus on Primary Healthcare Centers and an emphasis on AI-driven tech that can help the healthcare sector progress. Healthcare services industry leader, Bhanu Prakash Kamath S J that apart from AI-driven tech to boost productivity in the industry, an increase in investment in research and development will also help the sector tremendously. He also noted that increasing the investment into the healthcare sector to 2.5% of the country’s GDP would provide the sector with a tremendous advantage.
Vieroots’ founder and chairman, Sanjeev Nair, also emphasized the need for implementing tax benefits for those individuals who want to invest in preventive health programs as it will increase the adoption of such policies. Other than this, the expectation of a decrease in GST in the sector is also on the table.
With certain policy changes or updates regarding the healthcare industry, stakeholders hope that the absence of a regulatory framework regarding reused or refurbished medical equipment will be repaired. With the right policies in place regarding the same, under-served communities will be able to gain access to these devices easily. Such a policy should be able to address the safety and efficiency of this equipment. With no such provision currently in play, the healthcare industry has had to face significant financial losses.
Trends from Previous Budgets and Their Influence on 2025
Some of the previous budgets have put forth provisions that have truly had a major impact on the healthcare sector that could also end up influencing the Union Budget 2025. One of the most important of these influences is the increase in healthcare allocation as this has been an ongoing trend since the 2012-2013 budget. With a 12% annual growth rate in the allocation since the 2012-2013 budget, stakeholders hope that this trend will influence this year’s budget as well. Such an increase will help put more emphasis on primary care and rural healthcare facilities thus prompting a more holistic and preventive environment.
Previous budgets also focused on the importance of programs like Ayushman Bharat and POSHAN Abhiyaan which could influence the budget decisions centered around healthcare, leading to more funds being utilized for immunization, nutrition, and mental health purposes.
India has also had considerable overall digital development, and the healthcare sector is no exception. With previous budgets bearing witness to the growth in telemedicine and the introduction of the National Digital Health Mission (NDHM). This trend could influence the Union Budget In 2025 and help the country expand its digital health services and adopt provisions like maintaining e-health records.
The Indian economy’s growth is a testament to how well public and private players work together, and the healthcare sector is another excellent example of this. With previous budgets encouraging PPPs or Public-Private Partnerships, specifically for hospitals and diagnostics, stakeholders hope more provisions will be introduced to help this trend flourish after the Union Budget 2025. With an increase in such partnerships, improvements in healthcare accessibility and affordability will be possible.
Another trend that the previous budget saw where the healthcare sector is concerned is the adoption of universal health coverage with the expansion of the Ayushman Bharat program, for underprivileged groups. Stakeholders hope that this expansion will cast a wider net after the Union Budget 2025 to include more of the population under it.
Challenges to Address in Budget 2025
Despite the wonderful growth that the healthcare sector has gone through in the past decade, the sector continues to face challenges. One of these includes the existence of multiple regulators to regulate several licences. With such a multiplicity, the regulatory process becomes more complicated and undertaking operations becomes increasingly time-consuming.
Most of the government research grants are mostly applicable to institutions and academic centres. This has left most private companies in a lurch. Another issue that is faced by the healthcare sector is the time it takes for patents to be approved which is 50 months now and this is higher than the global average.
Taking the challenges mentioned above into account, there are certain provisions that the government can adhere to overcome them. To deal with the multiple regulatory bodies across the country, the government can look into forming a single regulator body each, for both pharmaceuticals and medical devices. Such bodies should have experts as part of them and would further better the ease of doing business for the healthcare sector.
With the right financial incentives and funding provisions, the government can encourage private companies CROs or Contract Research Organizations to participate in clinical and discovery research in the country. Now for the patent pendency issue. The government is hoping that it can reduce the number of months from 50 months to months, thus helping it align better with global standards and make it more appealing to foreign pharma companies.
