What can Union Budget 2020 do to address healthcare concerns?
Dr. Rana Mehta, Partner & Leader - Healthcare, PwC India
Provide fiscal concessions for healthcare
In order to address the acute healthcare supply side constraints, Union Budget 2020 can provide fiscal concessions like low-cost financing and flexible interest interventions. These would be a catalyst for investments and development in the healthcare industry, specially in Tier 2 and 3 cities. India will need over $10 Billion in the next decade to ensure that the healthcare sector grows at double-digit pace.
Provide budgets for Ayushman Bharat
Provide adequate budgetary allocation to Ayushman Bharat, specially the wellness pillar. Given the late detection and treatment of disease, this could significantly reduce overall healthcare costs for the country.
Boost private sector participation in healthcare
Mandate Public-Private-Partnership (PPP) in other clinical procedures as well as entire hospital setups as done in dialysis. This will encourage private sector participation and improve outcomes.
More incentives for medical device manufacture in India
Revisit incentives for the domestic manufacture of medical equipment. A substantial percentage (>70%) of equipment and consumables are still imported.
Expectations from Union Budget 2020 on social welfare
Improvement in public health facilities
The first component of Ayushman Bharat aimed at creating 1.5 lakh Health and Wellness Centres (HWCs) to bring health care closer to the homes of the people. The achievement till date is only around 20% and given a target to achieve 100% by 2022, we should be having higher allocation on this component.
According to estimates, nearly 7.5% of India's population is affected by some form of mental health issues. The country currently has approximately 9,000 psychiatrists, 2,000 psychiatric nurses, 1000 clinical psychologists, 1,000 psychiatric social workers. Whereas, the immediate need is for 30,000 psychiatrists, 37,000 psychiatric nurses, 38,000 clinical psychologists and 38,000 social workers. Higher allocation to National Mental Health Program from current Rs 40 Crores would be a good fillip to arrest the rising trend of mental health issues across the country.
New programmes for skilling and vocational education
The Government has been sponsoring “ONE-Skill and ONE-Time” till now with a focus to get trainees into the entry level jobs. There is a need to start thinking about life-long learning, long term courses, and reskilling to create an enabling environment for new age jobs, overseas placement using technology as a platform to counsel, train, assess and place youth. A specific focus on this area within the larger ambit of skilling would require specific new schemes or new sub-programs within existing schemes could be thought of.
Increase in overall spends for education
The spend on education has increased in last 5 years but is still below 5% of GDP in FY 2019-20. The spend on education in India is far below the BRICs countries who all have more than 10% expenditure on education. The highest being South Africa who had 18.9% in FY 2017-18. The finalisation of the New Education Policy and comprehensive reforms planned in education sector calls for a significant increase in the spend on education.
How can Union Budget 2020 can help kickstart demand in the automotive sector?
Kavan Mukhtyar, Partner & Leader - Automotive, PwC India
Reduce GST for automobiles
Reduction in the Goods and Services Tax (GST) rate applicable to automobiles to 18% from the current 28% to absorb the additional price impact of shift from BSIV to BSVI
Finalise the Vehicle Scrappage Policy
An incentive-based vehicle scrappage policy be introduced to remove old vehicles off the roads and trigger demand for new vehicles. The industry has proposed an incentive in the form of 50% reduction in GST as well as a 50% cut in road tax and registration charges
Remove customs duty on Lithium batteries
Abolish the customs duty of 5% on Lithium-ion cells to promote local manufacturing of the batteries in the country. This will further reduce cost of electric vehicles and accelerate its adoption. Additionally, the government should also consider providing an incentive for lithium-ion battery manufacturing for EV applications.
Allocate budgets for state transport overhaul
Allocate adequate budget to state transport undertakings to procure buses which will boost demand for commercial vehicles
How can policy thrusts and strategic investments in the sub sectors, as part of Union Budget 2020, boost the agriculture sector?
Ajay Kakra, Executive Director - Agriculture & Agribusiness, PwC India
Agri-Insurance
The existing Pradhan Mantri Fasal Bima Yojana (PMFBY) must be revamped to include tenant farmers under the scheme, ensure timely and accurate crop loss assessment and hasten claim processing to make it more impactful. Technology will play a crucial role in successfully implementing the scheme.
Oilseeds
As per Solvent Extractor’s Association (SEA), capacity utilisation of edible oil units in India has decreased from 65% to 46%, while we have imported 60% of the total demand for vegetable oil in 2018. The indigenous edible oil industry must be promoted. This calls for various short and long-term policy measures like revising import tariffs on crude and refined oil and incentivisng oil seed production.
Livestock
Simplifying the regulations on import of high-quality semen and live embryo will go a long way in facilitating breeding of high-quality cattle and making it accessible to those who can afford it. This, in turn, will boost milk production by four times. The Government must also look at increasing the Artificial Insemination (AI) coverage to improve the general livestock.
Fisheries
Current estimates suggest that only 52% of inland fisheries’ potential has been realised so far. Government must look at improving the infrastructure for deep sea fishing, collection, storage, traceability and processing of aqua produce. Developing the cold chain infrastructure will not only increase the quality of output but also reduce wastage.
Export promotion
There’s a need for awareness programmes on phytosanitary requirements of export markets, R&D initiatives for food products with export potential and incentivising the processing and packaging infrastructure, thereby improving the traceability and quality of food products to be exported.
Startups and Ag-tech promotion
Technology companies in the agricultural sector are different from the other sectors like healthcare and finance. The product is of low or medium value, and the market is geographically scattered. Therefore, the Government should look at providing continued support to ag-tech companies by providing incentives, skilling initiatives and giving the right exposure till the market matures.
Climate change
The agricultural sector is extremely vulnerable to risks posed by climate change. Unpredictable weather conditions have damaged crops in around 10 states in 2019. This calls for an integrated climate change policy which focuses on various aspects such as water conservation through micro-irrigation, developing resistant varieties through plant breeding and biotechnology, reducing dependence on chemical inputs, diversification of crops, etc.
Price stabilisation
We’ve seen how onion retail prices fluctuated this year. There needs to be a planned approach of sowing and connecting markets digitally for better price discovery mechanism to ensure a flow of surplus produce to other regions of the country to counter price differences. The Government's Operation Greens scheme, too, needs to be implemented in its full capacity.
How can Union Budget 2020 address challenges in the Insurance sector?
Joydeep K Roy, Partner & Leader, PwC India
Push for mandatory property insurance
All “pucca” property should be mandatorily insured as per law. An income tax benefit should be introduced in Union Budget 2020 for the premiums paid for house property insurance, thus driving growth in this segment. This will improve penetration of insurance, broad-base the premium and the risk. This will also reduce premiums while ensuring people get their claims when natural disasters happen. Relief fund expenditure of the Government will also reduce.
Streamline health insurance protocols
There should be fiscal measures to get the procedures and medication of the healthcare sector to be brought under regulations of protocols, and generic medicine should be made the norm. Then health insurance will become cheaper, and more practical without too many exclusions. The Government provided Ayushman Bharat will also become more cost effective.
Drive crop insurance penetration by implementing technology
Crop insurance risk estimation needs to be done taking advantage of modern technologies like drones, image processing and artificial intelligence tools. Along with that, cleaning / updating the data of Government records of land and property will be required to get accurate results.
Provide incentives for investing in pension schemes
While life expectancy is increasing, the investments in long term instruments and pension is decreasing. Union Budget 2020 must look to plug the gap by introducing incentives for long term investment. This will also bring long term retail money into Government and Infrastructure projects.
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