Industry's Reaction on Economic Survey 2019-20

Economic Survey 2019-20 said, “India’s march towards achieving Sustainable Development Goals (SDGs) is firmly anchored in investing in human capital and inclusive growth.” Here, the execution of development programmes towards improving social infrastructure, housing, health, education and bridging gender gaps, and between the haves and have nots is of paramount importance for the sustainable development and progress of the country.

The government programmes along with public investments in social infrastructure can only lead to the inclusive development of India. Below is the industry view from various players contributing to the social infrastructure of the country along with their expectations from the Budget 2020 to be tabled later today.

Education:

The Government strives to achieve the Sustainable Development Goal (SDG)-4 of inclusive and equitable quality education for all by 2030. The survey emphasised that Samagra Shiksha 2018-19 was launched to envisage school education as a continuum from pre-school to senior secondary level, endeavouring provide access to education to all. Various education programmes such as the expansion of Navodaya Vidyalaya Scheme, Pradhan Mantri Innovative Learning Program (DHRUV), Digital Infrastructure for Knowledge Sharing (DIKSHA) platform and e-content sites like e-pathshala aim to contribute to quality learning.

While in higher and technical education, the attention was drawn to setting up of Higher Education Financing Agency (HEFA), Schemes like National Educational Alliance for Technology (NEAT), Education Quality Upgradation and Inclusion Programme (EQUIP), PARAMARSH, mega online degree programme SWAYAM 2.0 etc among others.

With all these programmes and few more educational drives in place,  the government emphasised on the process of formulating a new Education Policy that will focus on quality education, innovation and research.

The survey indicated shifting to new learning methods vis a vis innovation to prepare children for the future. Here, blended learning methodologies  work effectively as it doesn’t divorce a teacher. “Digital learning platforms offer both teacher-facilitated learning and self-learning, creating a highly collaborative and at the same time a personalised learning environment for students. Tech-enabled learning practices creatively engage students in contextually embedded but collectively demanding learning activities, thus, stimulating multiple intelligences of children”, said RCM Reddy, Managing Director & CEO, Schoolnet India Limited.

Emphasising on higher education vis a vis innovation districts as the mantra for India for the next 50 years, Amber Malhotra, CEO & Managing Partner, Sam Circle Venture, said, “Universities-driven venture development model can target to create innovation districts around their campuses and attract capital, industry, small businesses, and government participation by thinking global and acting locally. Our institutions need to develop a culture of rewarding the development of intellectual capital and create pathways for its commercialization. Institutions and industries, should invest in developing specific programmes around problems that a respective region is facing, be it education, health, housing employment, etc. This will help to encourage a path where the winner doesn’t take all, instead, multiple entrepreneurs create millions of jobs, towards the progress of the country.”

Dwelling on the bridging the gap between the haves and have nots in terms of educational needs, Sudarshan Suchi, Secretary General, SOS Children’s Villages of India, said, “The government must encourage corporate and individuals to contribute to the holistic development of these children in terms of their education and health. There should be an announcement of an additional tax rebate of 5% over and above the available income tax rebate for corporate under CSR and individual benefits,  for encouraging them to contribute to the underprivileged children’s education and dignified life. The budget should concentrate on both long-term and short-term, and direct and indirect measures to ensure women’s and children's health, well-being, education and employment. A separate care programme should be expanded to children in India who do do not receive adequate parental care. There are reportedly 20 million children in India who are not getting sufficient parental care, as they may not have either parent. In 2021 this number is expected to rise significantly to 24 million. We in the development sector are seeking increased budget support from the government to introduce child welfare services that have all the checks and balances in place and extend to all children in India who are not adequately cared for.”

Health

In the Economic Survey, Ayushman Bharat, the world’s biggest health care scheme to improve access to health and delivery of health services at massive scale, is appreciated for setting up 28,005 Health & Wellness Centres as on January 14, 2020.

However, accessibility to healthcare services still poses a major challenge in many of the Indian states, especially in the rural rungs of the country.  Healthcare players operating in different segments in healthcare welcomed the positive growth and implementation of government health programmes, highlighted in the survey, while hoisting demands to fill in the missing gaps.

Manish Chhabra, CEO & Founder of Shifa Care, emphasised, “Allocation of at least 25% increase in the last year’s budget of INR 64,559 crores for the healthcare sector will make the entire healthcare scenario more suitable, making it more accessible and affordable for the lower strata. Here, if an allocation of 5% of the announced budget is dedicated to strengthening the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) scheme for public awareness, with more Jan Aushadhhi outlets, mandatory INN prescribing and dispensing, the healthcare budget of every citizen of India (especially of the ones nearing the poverty line) can be brought down. This will help a great deal in coping with out-of-the-pocket health payments, through affordable generic medicines which have demonstrated up to 65% savings compared to branded generics.”

Nivesh Khandelwal CEO and Founder CareCover, said, “To make healthcare accessible in the rural rungs of India, the government should aim to increase the expenditure as % of GDP by 0.25 basis points every year. Notably, the hospitalisation expenses are lower in certain states like Delhi and Karnataka as compared to other states. The Government needs to set up a task force to assess how to bring down the cost of healthcare without penalising service providers for the same. Successful schemes like Delhi Arogya Kosh could be implemented across other states too.”

It was observed in the economic survey that the out of  pocket expenditure (OoPE) on health as a percentage of total health expenditure has declined from 64.2 per cent in 2013-14 to 58.7 per cent in 2016-17. Various schemes have enabled this enhanced access to healthcare, including the Free Drugs Service initiative, Free Diagnostics Service initiative, Pradhan Mantri Bharatiya Jan Aushadhi Pariyojana (PMVJP) and Pradhan Mantri National Dialysis Programme (PMNDP), as per the Economic Survey.

Dwelling on the healthcare financing and expenditure on health, including both public and Out of Pocket Expenditure (OoPE), Khandelwal says, “In India due to OoPE, about five crore people are pushed below the poverty line due to the burden of healthcare expenditure. This is something where the policymakers can seek collaboration from players working in the domain. One of the solutions that we are providing is to convert your out-of-pocket expenditure into easy EMIs with zero % rate of interest for 12 months.”

On bridging the protection gaps vis a vis insurance or health covers, Divyanshu Tripathi, Co-founder and CEO, Easypolicy, said, “The government should take measures to simplify the health insurance plans to counteract the mounting out-of-pocket expenditure (OOPE). Though health insurance sector has gained momentum in tier 1 & tier 2 cities in recent years. However, there is a need to create awareness about the benefits of buying health insurance in tier 3 to tier 5 cities. The government should incentivise the health insurance buyers by raising the deduction limit for medical insurance premium under Section 80D from Rs 25,000 to at least Rs 50,000 for self and family.”

Tripathi further added, “Women being the anchors of their respective families, should be especially incentivised. In 2018-19, women bought 103 lakh life insurance policies and contributed Rs 36,525 crore of premiums (individual life insurance new business). Besides, the removal of GST will reduce the cost of a policy, making health insurance affordable for individual policyholders.”

Housing

According to Amber Malhotra, CEO & Managing Partner, Sam Circle Venture, “Housing, education, healthcare, energy, and mobility are the five areas where we need to get our acts together and get the basics right before we become smart. These areas are critical for the long term sustainability of the Indian economy. Our housing shortage on an annual basis is millions of units. And, we must pay huge attention to the housing needs of the larger population.”

Housing real estate has been going through a downturn for quite some time and requires government’s undivided attention. Following the measures announced by government in 2019,  the sector has a lot of expectations from Budget 2020. Sunny Katyal, Director of Investors Clinic, said, “Affordable housing needs to be taken into serious consideration keeping up with the goals of 'Housing for All by 2022'. The limit of INR 45 lakh to avail reduced GST rates of 1% of affordable housing should be increased to INR 65-75 lakh within the prescribed 60 square metres of carpet area. Interest rate on home loans should also be reduced to 7%; this will lead to increasing demand from today’s millennial who are one of the prime consumers in this segment. There should also be more deduction on home loan interest; lower interest rates will push those consumers who are sitting on the fence and boost sales in the overall sector.”

Katyal added, “There is a need to infuse more funds into the sector; most of the projects are stuck, inventories are unsold and construction is lying incomplete because of lack of funds. Unproductive assets in the form of under-construction, stuck or delayed projects are estimated at 560,000 homes worth INR 4.5 trillion as per recent reports. Along with fund infusion being the need of the hour, government also needs to ensure that there is adequate distribution of funds in tier 2 and tier 3 cities. While fund support has been announced by the government, the smaller cities and smaller developers are more often than not are deprived from the same, due to lack of proper implementation. This will lead to inclusive development in housing real estate sector across the country.”