Urgent Need to Raise Budget Allocations for Health Sector

Even in Pandemic Times, Health Allocations Have Been Far Short of Real Needs

hospital india

One of the most glaring flaws of India’s fiscal policy which has  faced severe criticism relates to less than adequate allocation for health sector. Raising combined annual spending by the centre and states on health to at least 2.5% of the GDP has been mentioned often as the least that the country has to achieve in this context. This commitment has been expressed  in the National Health Policy 2017 as well, which speaks of achieving this by year 2025.

Of course a number of countries which are admired for their health achievements have allocated and spent much more. The pressing need for India, in terms of real requirements of its people and the accumulating backlog, is to do even more. Hence, raising the health allocation to 2.5% of the GDP by year 2025 should be regarded as only the first stage of making a long overdue and important correction.

Still, confining  ourselves just now only to this 2.5% of GDP target by year 2025, let us evaluate the actual achievement. In 2019-20, the combined  centre and states expenditure on health was only 1.6% of GDP. A roadmap was drawn up a high-level group which reported to the 15th Finance Commission. This tells us approximately how much the health allocation of the Union Budget should increase each year in the run-up to increase health spending to 2.5% of GDP by year 2025. According to this indicator, the health spending should have been around Rs. 1.3 lakh crore in 2021-22 or 0.68% of GDP. Unfortunately the health sector allocation for 2021-22, the Budget Estimate or BE, was only Rs. 76,902 crore combined for the Ministry of Health and Family Welfare and the Ministry of Ayush, or 0.35% of GDP.In other words a significant shortfall remained in health sector allocation even during the pandemic time allocation for 2021-22, in terms of the phased progress per year to reach 2.5% of GDP target by year 2025.

As the allocation was much below expectation, the health allocation was instead publicised initially as a combination of health and well-being, adding nutrition, water and sanitation, as well as some other allocations to health which had never happened before. Once this clarification was obtained, the Budget Estimate or allocation for health sector for 2021-22 in the Union Budget was revealed to be 0.35 per cent of GDP ( combined allocation for the two Ministries, main health ministry plus Ayush). In other words this had still remained very low despite the special needs created by the pandemic.

During the previous year 2020-21 as the pandemic spread, the union government had increased the Revised Estimate or RE for health sector by about Rs. 16,000 crore, the increase being related to COVID related factors. However there was hasty and premature going back while preparing the BE of next year as the BE of 2021-22 was less than the RE of 2020-21 by about 10 per cent.If we look only at the allocation of  the most important program of National Health Mission, after witnessing a moderate COVID related increase in its RE for 2020-21,it soon experienced a reduction in 15 per cent in the BE for 2021-22 ( compared to the RE for 2020-21).This is very unfortunate as apart from the continuing needs of the pandemic, the additional task of repairing disruptions which apppeared in COVID times in our already fragile base of health sytem has to be attended to, including handling increased backlog in the treatment of other important diseases which had considerably slowed down due to the excessive demands placed on the limited and weak health system by COVID.

Seen as a percentage of union budget, the union government’s spendings and the latest allocation during the last 7 years have ranged between 1.97 per cent and 2.55 per cent, a very low range. It is disturbing to know that the allocation for health in terms of the percentage of union budget was lower in 2021-22 (2.21 %) compared to the actual speending on health in 2017-18 (2.55% of union budget). So are we even moving in the right direction?

The wake-up call to significantly increase health spending is still to be heeded by the government despite  clear indications that the pandemic damage could easily have been reduced if the country had been better prepared in terms of a strong health base, stretching all the way from cities to remote villages. The availability of government beds in India is only 0.55 per 1000 population, which is much, much short of the WHO norm of 5 per 1000 ( see Department related Parliament Standing Committee on Health and Family Welfare, November, 2020) Official statistics have only recently reported a shortfall of 23 per cent sub-centers, short fall of 28 per cent primary health  centers and a shortfall of 37 per cent of Community Health Centers in rural areas (Rural Health Statistics Report,2019). In addition, in terms of filling the sanctioned posts, these rural health centers suffer from very glaring shortage of specialist doctors in particular, creating serious prolems specially for the timely treatment of women and children. In terms of attending to increasing mental health problems, the shortage of specialist care is alarming.

Hence there is very clearly an urgent case for raising health sector allocations very significantly in the forthcoming union budget 2022-23.

Bharat Dogra is Honorary Convener, Campaign to Protect Earth Now. His recent books include Plane in Periland Man Over Machine.

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