Budget 2010 : Great Expectations

Its Budget Time in India this week with the Railway Budget scheduled for presentation on February 24 and the Annual Budget on February 26 - it is also the time for great expectations from all sections of society and the healthcare ecosystem is no exception !

On the Public Health front, there is pressure on the Finance Minister to enhance the outlay for the National Rural Health Mission (NRHM). There is also talk of the need to expand the coverage under the NRHM to all states in India from the existing 18 states with poor health indicators. There is also talk of the need to expand the Health Mission to urban areas as well to create a National Universal Health Mission

The Private Healthcare Providers have been clamouring for an "industry" or "priority sector" status to healthcare. There are requests for increasing the duration of tax holiday for healthcare investments in Tier II and Tier III cities first introduced in Budget 2008 from the existing 5 years to 10 years to make healthcare projects more viable

The Pharma industry has been requesting for tax incentives towards expenditure incurred on R&D as well as inclusion of costs associated with activities like clinical trials, product filing, registration under the ambit of "R&D" activities. Simplifying transfer pricing and inclusion of more drugs under the category of life saving drugs have also been requests from the pharma industry

The Medical Equipment industry would like to see an impetus to indigenous manufacture and withdrawal of the perverse incentives which have prevented the growth of the domestic medical equipment manufacture.

There are also expectations that limits for medical expenditure allowed for tax purposes will be increased from the Rs. 15000 level that was fixed a decade ago.

Tempering all these expectations is the hard reality of a burgeoning fiscal deficit which at 6.8% of GDP is way above the target value of 3% for 2009-10 defined under the Fiscal Responsility and Budget Management Act.

Budget preparation is a tough balancing act even in the best of economic environments - more so under the current challenging times

How will Pranab-da respond ? We'll come to know on 26th February !