Indian Budget Series: Budget for Health
05-03-2024
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Introduction
Health sector budgeting is of paramount importance, particularly in a country as populous as India, compounded by the recent pandemic. With a population exceeding 1.4 billion, allocating resources effectively ensures adequate healthcare coverage and disease prevention. The COVID-19 pandemic underscored the significance of a robust health budget, revealing vulnerabilities and prompting the need for swift responses.
A well-structured health budget allows for strategic investments in healthcare infrastructure, workforce training, and medical research. It facilitates the procurement of essential medical supplies and the implementation of widespread vaccination campaigns. Given the sheer scale of India's population, health sector budgeting becomes a cornerstone for ensuring accessibility, affordability, and quality of healthcare services. It serves as a lifeline in emergencies, fostering resilience and safeguarding public health on a national scale. Hence, an agile and well-funded health sector is imperative for a populous nation like India to manage health crises effectively and protect its citizens. This article delves into the recent performance of the health budget over the past few years, examines the allocations in the latest budget, and explores the constraints and limitations associated with it.
In India, the states hold the responsibility for public health and sanitation, encompassing the management of hospitals and clinics. The Ministry of Health and Family Welfare plays a pivotal role in policymaking for public health, offering both administrative and financial support to states for the operation of public health facilities. This assistance extends to addressing specific health concerns like maternal health and nutrition. Additionally, the Ministry is instrumental in establishing and overseeing medical Institutes of National Importance, such as AIIMS, and managing facilities in union territories, including Delhi.
The Ministry comprises two key departments, namely, the Department of Health and Family Welfare, tasked with implementing public health schemes and overseeing medical education regulations, and the Department of Health Research, responsible for conducting medical research. The National Health Mission, administered by the Department of Health and Family Welfare, receives the majority of the Ministry's budget. This mission includes fund transfers to states for various purposes, such as reinforcing health infrastructure, addressing human resources needs, supporting medical education, and facilitating COVID-19 vaccination efforts. State transfers are also made in accordance with the recommendations of the 15th Finance Commission, amounting to over one lakh crore rupees for enhancing primary health infrastructure.
This article delves into the recent performance of the health budget over the past few years, examines the allocations in the latest budget, and explores the constraints and limitations associated with it.
Budgetary Allocation and its Impact
Between 2012-13 and 2023-24, the budget for the Department of Health and Family Welfare has consistently grown at an annual rate of 12%, surging from Rs 25,133 crore in 2012-13 to Rs 86,175 crore in 2023-24. This substantial increase underscores the government's commitment to bolstering resources for health-related initiatives. Furthermore, the Interim Budget 2024–25, with an allocation of ?90,171 crore for health, is geared towards enhancing access to healthcare services and infrastructure in India.
Figure 1: Comparison of Budget Estimates and Actual Expenditure (Rs Crore)
Year |
Budget Estimates |
Actuals |
% Utilisation (Actuals/BE) |
|
2010-11 |
23,530 |
22,765 |
82% |
|
2011-12 |
26,897 |
24,355 |
82% |
|
2012-13 |
30,702 |
25,133 |
82% |
|
2013-14 |
33,278 |
27,145 |
82% |
|
2014-15 |
35,163 |
30,626 |
87% |
|
2015-16 |
29,653 |
30,626 |
103% |
|
2016-17 |
37,066 |
37,671 |
102% |
|
2017-18 |
48,853 |
53,294* |
109% |
|
2018-19 |
52,800 |
52,954 |
100% |
|
2019-20 |
62,659 |
62,397 |
100% |
|
2020-21 |
65,012 |
78,866* |
121% |
|
2021-22 |
73,932 |
84,470 |
114% |
|
2022-23 |
86,201 |
75,731 |
87% |
Source: Union Budgets, PRS, (2010-2023).
Regarding positive developments, the health sector in India has witnessed numerous significant government initiatives. One such initiative is the National Health Mission (NHM), which is the largest public health initiative by the Government of India (GoI). It comprises two sub-missions: the National Rural Health Mission (NRHM) and the National Urban Health Mission (NUHM). The primary program elements consist of enhancing the health system, focusing on Reproductive, Maternal, Neonatal, Child, and Adolescent Health (RMNCH+A), as well as addressing both Communicable and Non-Communicable Diseases. The NHM aims to realize the goal of universal access to fair, affordable, and high-quality healthcare services that are both accountable and responsive to the needs of the people. Although the budgetary allocation has been low over the years and has been under scrutiny, in the allocation for 2024-25 (Rs crore), the budget for the National Health Mission (NHM) stands at 38,183, a notable increase from the revised allocation of 33,886 in 2023-24. This represents a percentage change of 12.7%, signifying considerable growth (Department of Health & Family Welfare, Ministry of Health & Family Welfare, Government of India, n.d.).
Launched in 2018, Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is another initiative which is one of the world's largest health insurance schemes. It addresses the financial barriers to healthcare by providing coverage to vulnerable families for secondary and tertiary hospitalization. The Economic Survey 2022-23 reports that a total of 21.9 crore beneficiaries have undergone verification under the Ayushman Bharat Pradhan Mantri – Jan Arogya Yojana (AB PM-JAY) Scheme, which includes three crore beneficiaries verified using State IT systems as of January 4, 2023. The scheme has authorized approximately 4.3 crore hospital admissions, with a cumulative amount of Rs. 50,409 crores, facilitated through a network encompassing over 26,055 hospitals (Ministry of Health and Family Welfare, 2018).
Healthcare Gaps
While there have been positive strides from the government towards the health sector, addressing the identified gaps is crucial for building a robust and inclusive healthcare system. One such gap can be the budgetary allocation towards health. Insufficient investment in public health infrastructure can have adverse effects on healthcare accessibility, thereby impacting health indicators. The National Health Policy of 2017 recommended that the total government expenditure on public health, combining central and state contributions, should reach 2.5% of the GDP. However, the Economic Survey 2022-23 highlights that the overall public health expenditure stood at 1.6% of GDP in the actuals of 2020-21 and is projected to be around 2.1% of GDP in 2022-23 (Budget Estimate), revealing a gap between the recommended target and the actual estimates (PRS Legislative Research, 2023).
Additionally, healthcare in India is funded through government allocations at both central and state levels, charitable institutions, or individual contributions. Notably, individuals bear a substantial burden of healthcare costs, known as out-of-pocket expenditure (OOPE), which is comparatively high in India compared to other nations. The limited public investment in healthcare has resulted in a heavy reliance on private healthcare providers, often associated with higher costs.
Although there has been a decline in Out-of-Pocket Expenditure (OOPE) as a percentage of Total Health Expenditure from 62.6% in 2014-15 to 47.1% in 2019-20 (Ministry of Health and Family Welfare, 2023), the figure remains elevated. To provide context, this percentage is only 5.4% in South Africa, the lowest among G20 members.
Furthermore, according to a PRS Legislative Research article (2023), additional concerns related to the healthcare landscape in India demand urgent government attention. These include the inadequate provision of primary healthcare infrastructure, a scarcity of personnel in rural regions, and the need for heightened awareness regarding the Pradhan Mantri Jan Arogya Yojana (PMJAY), a vital public health insurance scheme. Furthermore, there needs to be more investments in health research in healthcare. The government must address these multifaceted issues to enhance the country's healthcare system.
The healthcare landscape in India witnesses a boost in the 2024 Interim Health Budget, with a notable increase in total healthcare expenditure from Rs. 79,221 crore to Rs. 90,171 crore, underscoring a steadfast commitment to strengthening healthcare infrastructure. Key allocations include a significant rise in funding for the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) from Rs. 2,100 crore to Rs. 4,108 crore, emphasizing accessible healthcare.
Other highlights include increased allocations for the Livestock Health and Disease Control Program, Ayushman Bharat-PMJAY, the Production Linked Incentive Scheme, and biotechnology research, reflecting a comprehensive approach to healthcare challenges. The budget also focuses on preventive healthcare through initiatives like cervical cancer vaccination, maternal and child health integration, and the introduction of the U-WIN platform for improved immunization management. Furthermore, measures such as expanding medical colleges, upgrading Anganwadi centers, and promoting sustainable manufacturing underscore a holistic strategy (PRS Legislative Research, 2024).
Hence, the current interim budget lays a robust foundation for a healthier and more resilient nation. However, a concerted effort combining financial commitments, policy reforms, and community engagement will pave the way for a robust and inclusive healthcare system capable of safeguarding the well-being of India's diverse population.
References
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