A Perspective on the Interim Budget Allocations for the Health Sector

The interim budget for the coming financial year was presented on the 1 February 2019 by Finance Minister Piyush Goyal. This budget being an interim one has been highly populist in its agenda, with a rollout of schemes that benefit the majority. The major beneficiaries from the budget allocations this year are the informal workers, farmers and salaried employees. Although the actual implementation and the means by which the deficit is to be financed seem to be a little fuzzy, the budget aims to pump consumption and spending in the economy. However, there is a lack of a long term agenda to build long-lasting infrastructure for economic, social and human development.

This article would be discussing the budget allocated to the health sector. To begin with the numbers, the government allocated ₹63,450 crores for the health sector which is 2.2% of the entire budget and somewhere around 1.15% to 1.5% of the GDP. However, attaining the target of 2.5% of the GDP seems to be a distant one in the context of the present budget. This budget has primarily focused on the Ayushman Bharat Scheme with an allocation of Rs. 6,400 crores. The Health and Wellness Centres (HWCs) have been given ₹1,600 crores. Under this HWC scheme, ₹250 crores have been allocated for the National Urban Health Mission and ₹1350 crores for the National Rural Health Mission.

The National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Disease and Stroke has received a boost in allocation from ₹175 crores to ₹275 crores. The National Tobacco Control Programme and the Drug Deaddiction Programme received an allocation of ₹65 crores, which is ₹2 crores deduction from the previous budget. The NITI Aayog recommendation for imposing a tax on alcohol and tobacco to fund preventative health care has not been addressed in this budget. Finally, the twenty second AIIMS was announced to be constructed in Haryana. AIIMS Delhi has also received an increase of 20% in their allocations. However, important programmes like the National Health Mission have been receiving lesser and lesser attention over the years.

The per capita annual health expenditure in India adjusted to purchasing power parity is $100 while the US spends $10,244 per person each year and other OECD countries spend around $3,000–$4,000. India has one of the highest out of pocket expenditure for health at 67%. These figures point out the lack of public health infrastructure in India. When we look at Ayushman Bharat Scheme, the very conservative per head estimates for a target group of five crores population cannot be met with the ₹6,400 crores allocation. Similarly, of the 3,508 HWCs on record, only 582 have been constructed in backward and neglected regions.

It is important to consider these neglected regions because the capital expenditure outlay for the health sector in India has been declining over the years. It has indeed halved from ₹3,047 crores to ₹1,675 crores in the present interim budget. With capital expenditure declining and the emphasis shifting to underfunded mega schemes, these regions are under the threat of further negligence. Finally, some of the very essential and persistent problem areas have not been addressed in this budget. Allocations for preventative health care, especially in terms of oncology and urology, have not been given much attention. This is a huge issue because of the high cost of treatment. The lack of preventative oncology is making it hard to diagnose cancer at early stages when it is treatable. It is also imperative to improve the quality of the medical procedures and packages that are made available under the Ayushman Bharat Scheme and it should focus on disease management and not merely provide a period of care.

The health sector in India needs a lot of attention, given that we are a rapidly growing economy. The important fact that we need to keep in mind is that merely having a higher GDP does not translate into better health of the population, but on the other hand better health care would positively influence the GDP figures. In India, 6% to 7% of poverty can be explained in terms of health shocks. Therefore, developing a sound and inclusive health care system that address the needs of the large population is crucial for India’s human development. Unfortunately, we have a long way to go in this regard given the nature of the policy orientation.

Picture Courtesy- Virtual College


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