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Healthcare Sector Expectations from the Union Budget Amidst the Pandemic

28 Jan 2022 0 COMMENT


Healthcare is one of the biggest priorities for India's people and its government. With Covid cases resurging once again on account of the third wave of the pandemic, the sector will find itself stretched thin once again. The previous two waves exposed several issues in India's healthcare infrastructure, and to fix this, experts and key players in the sector have certain expectations from the Union Budget.

Apart from increased allocations, the healthcare sector expectations also include more investment in research and development, support for telemedicine and a greater focus to vaccinate the country's population.

Outlined below are some of the critical healthcare sector expectations from Budget 2022:

1. Greater Resource Allocation

In the Union Budget announcement of 2021-2022, the Finance Minister allocated *1.2% of the gross domestic product to the public health sector. According to industry experts monitoring the situation, India needs to increase its public healthcare spending to 2.5%-3.5% of GDP to assist the transformation in supporting the ongoing healthcare crisis.

2. Funds for Vaccination Programs

As of 30th December 2021, only **64% of India's adult population is fully vaccinated. That leaves almost one-third of the adult population to be jabbed. Then, children need to be vaccinated too. Healthcare sector expectations include allocating appropriate resources for vaccination drives, booster shots and children's doses in Budget 2022.

3. Reduction in Taxes for Drugs

The Goods and Services Tax on drugs ranges from 0% to 18%***. While some life-saving medicines fall under the zero GST slab, most drugs are taxed 12%*. Given the crucial role of the healthcare and pharmaceutical industry during the pandemic, they expect a cut. Healthcare players are also hoping for a tax deduction on product development and in-house R&D.

4. Increased Credit Line

Apart from higher GDP allocations and reductions in taxes, the healthcare sector is also seeking additional support in increased credit lines. Hospitals are hoping for more incentives or added depreciation for greenfield hospitals boosting the healthcare infrastructure in the country.

5. Support to Telemedicine

Another area of contention for healthcare players is telemedicine and digital healthcare. During the pandemic, many people resorted to digital healthcare facilities. Telemedicine in smaller cities, towns and rural areas helped ease some of the strain on the healthcare infrastructure. Industry experts and even the common public are hoping for more resource allocation and support to this sector so that private players and startups can increase their coverage further to reach more individuals requiring these services.


In the previous Budget, the government made many budgetary allocations and announcements to aid the healthcare sector. Given that the pandemic is still ongoing, healthcare and pharmaceutical industry support should be utmost priority in the upcoming Union Budget.

*1.2% of GDP (source – The Economic Times as of 21st Oct 2021)

**64% (source – BBC News as of 31st Dec 2021)

***0% to 18% (source – Cleartax as of 12th Jan 2022)

****12% (source – Cleartax as of 12th Jan 2022)

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