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4 things to know about the healthcare sector post Budget

06 Feb 2020

It is said that the money people spend on education and healthcare would continue to rise irrespective of any economic downturns. This sector has always been among the top agenda globally, especially in developing countries like India.

Last year the government has allocated a record 62,659 crore INR for the health care sector and this year the number has further increased. The government has rolled out certain schemes to promote health education among the citizens. The various deadly epidemics which have risen in the last few years have further raised the need for the easy and penetrative access to healthcare and medical facilities for everyone.

The Budget was announced on 1st February by the Finance Minister Mrs. Nirmala Sitharaman in which several new allocations and revisions were to further improve the medical and health sector in the country. Various new schemes have also been implemented by the Health Ministry to provide medical care and services to every citizen of the country.

1. Allocation of fresh funds: The Ministry of Finance has allocated a total of 69000 crore this year for the health care sector. This is nearly an increase of 10% as per the last year figure of 69.659 Crores. Allocation of new funds will help the government to implement proper and modern facilities in every nook and corner of the country, which will make sure that no one is devoid of medical and health care access. There can be a considerable amount of rise in Medical Tourism due to this, which can be beneficial for hospital networks such as Apollo Hospital, Fortis Health and Shalby.

2. Ayushman Bharat Scheme: The government has planned to set up more than 1.5 lakh hospitals and wellness centers by 2022. This includes setting up of modern medical facilities in tier 2 and tier 3 cities. The allocated funds will be used to equip the new and old hospitals with the latest and modern medical equipment. This will lead to an increase in the volume of pathology laboratories in giving a boost to stocks like Dr Lal PathLab and Thyrocare Tech which provide door to door collection of samples for all pathology requirements.

3. Jan Aushadhi scheme: The Jan Aushadhi sceheme, which is providing medicines and limited surgical at nominal rates will also be benefited. The Jan Aushadhi stores will be expanded to every district and the range of medicines and surgical which are available with them will also be increased. This would also be positive for both pharmaceutical companies as well as medical equipment manufacturers.

4. Health Cess: The government has imposed an additional health cess on the import of medical equipment. Out of all the medical equipment which are imported in the country, nearly one fourth are from the US. The extra tax generated from the Health cess would be further used for the Ayushman Bharat scheme. This will also boost the production of medical equipment in the country itself which will also generate employment as well as revenue.

There are various such schemes that the government has opted to promote health care. The government has a goal of eliminating tuberculosis from the country by 2025. More than 1500 Indians are killed every day by this deadly disease. After successfully eliminating Polio disease from the nation, the second target for the government is Tuberculosis.

This new allocations and schemes in the health sector have generated more opportunities. The “TB Hatega Desh Bachega” mission, has generated several opportunities for various companies like Lupin pharmaceuticals which is the current market leader in Anti-Tuberculosis medicines. Stocks in healthcare like Dr Reddy Labs, Aurobindo Pharma can be good picks and are likely to benefit from the budget announcements.

Considering the economic conditions of various sects of the society, there are still various people who are below the poverty line and cannot afford proper medical care. In 2019 there was a case in Kota’s JK Lon Hospital where as many as 963 infants lost their lives due to poor hygiene and lack of facilities.

There are various epidemics spreading across the globe. The latest one being the Corona virus threat, which has already entered the Indian subcontinent. It is necessary to have latest medical equipment and access to proper health facilities in order to fight against such deadly diseases. The government hospitals were characterized by unhygienic conditions, poor infrastructure and lack of facilities, but the situation has improved a lot in the last few months.  It is expected that with the new Budget 2020, the situation in the healthcare sector will improve further.

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