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Published on: Feb. 8, 2021, 12:57 a.m.
Has the Central government paid lip service to the health sector?
  • The union minister of health. File picture

By Sumit Ghoshal. Contributing Editor, Business India

The health component of the Union Budget for the coming year represents a directional shift in the government’s thinking. On the face of it, the health budget is more than double the previous year’s allotment (Rs2,23,846 crore in the latest budget, as against Rs94,452 crore in Budget 2020). However, this includes allocations of Rs35,000 crore for Covid-19 vaccinations, Rs60,000 crore for the Department of Drinking Water & Sanitation) and Rs36,000 crore as special grants also for drinking water and sanitation programmes. In addition, there is a budgetary provision of Rs64,180 crore for a six-year plan labelled Atmanirbhar Swasth Yojana.

The specific amount earmarked this year for the Department of Health & Family Welfare is Rs71,269 crore – an increase of 9.6 per cent over Rs65,000 crore in the previous year. The conclusion many critics of the government have drawn is that the Central government has paid lip service to the health sector, instead of providing a genuine boost.

While being careful not to criticise the budget provisions directly, the Organisation of Pharmaceutical Producers of India (OPPI) notes that the budget increase from Rs69,000 crore (revised estimates) last year, to Rs71,269 crore this year is insubstantial. Thus, it avoids talking about the total figure of over Rs2 lakh crore mentioned in the budget proposals. The OPPI has, however, welcomed the separate allocation for Covid-19 vaccination and plans for support to the health and wellness centres, both in the cities and rural districts.

Lack of support

Prominent consultancy firms, such as Frost & Sullivan and the Exim Bank, have also commented gently but adversely on the move to include Drinking Water and Sanitation as part of the health budget. “The government’s proposal to increase the health budget by 137 per cent seems like a huge leap at first glance,” says Ruplekha Choudhurie, industry analyst, Techvision for Frost & Sullivan.

  • Reddy: ground-breaking focus on health

    Reddy: ground-breaking focus on health

“But it is important to note that it includes an allocation for allied sectors such as nutrition, drinking water, sanitation, liquid waste management. It also incorporates Rs35,000 crore for Covid-19 vaccine development and roll out”. She also observes that the allocation for healthcare this year is just 0.34 per cent of India’s GDP – only slightly higher than 0.31 per cent in Budget 2020. This has to be viewed in the backdrop of the healthcare industry’s long-standing demand that government spending on health should be about 2.5 per cent of India’s GDP (which works out to slightly under 25 per cent of the country’s tax collection)!

According to an Exim Bank document, the impact of this year’s budget on the health sector would be ‘moderately positive’. The document also mentions that even with the increased spending this year, India’s health budget would be much lower than other countries such as Brazil, South Africa, Russia and China. Besides, there are no new schemes for providing a boost to the domestic pharmaceutical industry, it observes.

On the other hand, FICCI Health Services Committee Chair Alok Roy describes the budget proposals as a blessing for the health sector. He applauds the government for conceiving the idea of the Atmanirbhar Swasth Yojana, in addition to the National Health Mission. It is a welcome move towards strengthening primary, secondary and tertiary healthcare in the country, addressing the prevention, cure of ailments, as also the well-being of the population. This will also intend to develop capacities of health care systems, develop institutions for detection and cure of new and emerging disease as the first step to boost rural health and keep country ready for emergency handling of pandemic situations, says Roy, also chairman of the Kolkata-based Medica Group of Hospitals.

Likewise, Prathap Reddy, chairman, Apollo Group of Hospitals, has appreciated Finance Minister Nirmala Sitharaman’s decision to list health as her first pillar and said her announcements had ‘gladdened his heart’. He also remarked that the government’s ground-breaking focus on health would provide access to medical care to all as well as fuel job creation and boost economic momentum.

The government’s shift in thinking to expand the definition of health activity to incorporate factors affecting people’s health appears to have been ignored by several sectors of the healthcare industry. Perhaps, the administration should make some efforts to explain its action to the people at large.

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