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The Indian government, while presenting the Budget 2021, had to focus on the healthcare sector while keeping a keen eye on boosting a troubled economy. Union Finance Minister Nirmala Sitharaman has segregated the health sector allotment under three clusters – prevention, cure and well-being.  

Substantial allocations

The FM stated that ‘health and well-being’ as a whole is one of the major pillars of the budget and announced a 137% leap in allocations for the healthcare sector. This allocation included a holistic approach to improve the healthcare, water, sanitation and nutrition segments inclusively. The FM outlined a financial plan of spending `2.23 lakh crore on the healthcare sector in the upcoming fiscal. Importantly, under this allocation, `35,000 crore will be invested for Covid-19 vaccines.

The Economic Survey earlier mentioned that the country should strengthen the National Health Mission (NHM) for public health services along with the Ayushman Bharat scheme for social insurance. Giving a ray of hope, the NHM has received 9.5% more allocations than the earlier year – up from `33,400 crore to `36,575.5 crore. The survey moreover mentioned that India requires an additional 2.5%-3% of the GDP for public spending on healthcare. It was only 1.5% of the GDP - quite low in the global context.

The FM also announced a fresh scheme - the PM Atma Nirbhar Swasth Bharat Yojana which will be launched with an outlay of about `64,180 crore over six years. This is expected to support almost 17,788 rural and 11,024 urban health and wellness centres nationally. This scheme will set up integrated public health labs in all districts and 3382 block public health units in 11 states. This scheme will also help to establish critical care hospital blocks in 602 districts and 12 central institutions.

‘Prevention’ depends highly on effective surveillance by the authorities. Understanding this, the government will strengthen the National Centres for Disease Control and its five regional branches and 20 metropolitan health surveillance units. These will help the nation to combat further pandemic and epidemic situations. 

The FM has also mentioned the importance of the ‘One Health’ concept that connects environmental health, human health and animal health in one thread. This concept gained popularity after the Covid-19 pandemic. The budget has promised to set up a national institution for ‘One Health’ - a regional research platform for WHO South East Asia Region, nine Bio-Safety Level III laboratories and four regional National Institutes for Virology.  

Room for improvement

The budgetary allocation for the healthcare sector is being appreciated by experts but there was room for improvement. During the pandemic, healthcare workers initially struggled a lot due to insufficient infrastructure. But allocation for health services received only 2.21% of the total budget which is actually a sink from the 2.27% allotment in the previous budget. 

Kolkata-based veteran general physician Dr. Kuntal Ghosh told BE, “The healthcare system of India is following the basic approach of preventive, curative and total well-being of every individual for the last six or seven decades and the FM mentioned it again to remind us. This year’s proposed allocation in health is actually 10% lesser than the actual expenditure. Can we say that there is huge increase in allocation? One time expenditure for vaccination is proposed to be `35000 crore, so actual allocation for infrastructure development for rural and urban basic health care is much less. Moreover, centre per excellence for virology and bacteriology etc. needs robust allocation and it should be throughout the country.” Additionally, reduction in GST on Active Pharmaceutical Ingredients (API) to minimise the cost of healthcare services - was an important demand. But the budget did not touch upon this.

The Covid-19 pandemic has proved that the Indian healthcare system has been unaffordable for a large section of the citizens. But the budget did not provide any reduction on medical insurances and its premiums. The government’s allocation for the health insurance scheme Ayushman Bharat-PM Jan Arogya Yojana (PM-JAY) of 2018 remained unchanged at `6,400 crore. 

Ritu Priya, Professor, Centre of Social Medicine and Community Health, Jawaharlal Nehru University, in an opinion to The Indian Express, said recently, “A 26.8% increase for the Department of Health Research and 40% increase for the AYUSH ministry do not add up to much since each of them are only 3%-4% of the total health budget. The Finance Commission grants of `13,000 crore and `35,000 crore for Covid-19 vaccinations are one-time allocations and therefore, do not strengthen the overall system.” Additionally, the core health service and research ministries have only received a mere 11% increase. The National Urban Health Mission has acquired only a `50 crore increase as compared to the previous year’s budget - that is from `950 crore to `1,000 crore.

Allocation for the central sector and centrally sponsored family welfare schemes has been reduced by 35% from `600 crore to `387.15 crore in the current budget. On the other hand, the budget has conceivably boosted pharma companies by incentivising Research and Development (R&D) expenditures. 

In the total budgetary allocation for healthcare, some projects are actually under the Ministry of Women and Child Development and the Ministry of Drinking Water and Sanitation. The budget stated, “To strengthen nutritional content, delivery, outreach, and outcome, we will merge the Supplementary Nutrition Programme and the Poshan Abhiyan and launch the Mission Poshan 2.0.” But this ‘Rashtriya Poshan Maah’ initiative directly comes under the Ministry of Women and Child Development. The healthcare allocation also includes the Jal Jeevan Mission (Urban) that is going to be launched. The mission aims at universal water supply in all 4,378 urban local bodies with 2.86 crore household tap connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over five years, with an outlay of `2,87,000 crore. But this project is being considered under the Ministry of Drinking Water and Sanitation.

Dr. Ghosh said, “We have to remember that climate change, pollution, deforestation etc. can create devastating public health impacts in different parts of the country in different manners. In my opinion, the actual increase in health budget must be at least around 2.5%-3% of the GDP and only then we can fulfil the holistic approach of healthcare.”

The government’s major need for the upcoming fiscal should be to mitigate the differences in the quality of healthcare services between private and public sectors. This will lead to affordable and quality healthcare services along with ‘well-being’ for all. The previous year has already pushed back the employment and family income situations massively in India. Offering affordable healthcare services to the citizens should be of utmost priority to the government.