New Delhi: The budget for 2020-21 proposed several new initiatives on the road to achieving aspirational India’s objective of 5 trillion dollar economy. The budget articulated and underlined health as a critical link in aspirational India’s dream. The overall allocation to health sector accelerated to Rs. 65,011 crores in 2020-21 from Rs. 62,659 crores in 2019-20.
This translates into a nominal increase of 4 percent but in real terms it would mean virtually no rise. The largest union government scheme, namely National Health Scheme, which accounts for nearly half of all spending, received no increase in budget allocation, which remains at Rs. 33,400 crores. Ayushman Bharat, the flagship programme of the government, has two components including PMJAY (health insurance scheme) and Health & Wellness Centres (HWC).
The Ayushman Bharat programme has placed enormous bet on the success of scheme, but the allocation for the year 2020-21 and the revised estimates, belies any buoyancy associated with the scheme. The proposed budget for PMJAY is estimated at Rs. 6,400 crores for the year 2020-21, while a similar amount was set aside last year budget but the scheme’s uptake was merely at 50% in the year passed by.
On an average, the allocation for PMJAY works out to be a paltry Rs. 128 per beneficiary per annum for the world’s largest health insurance scheme. On other hand, the Central Government Health Scheme (CGHS), another insurance scheme, the privileged constituency of the country, received Rs. 8,700 per beneficiary, signifying lopsided budget allocation.
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Recognizing the need to revitalize the PMJAY scheme in a span of just two years of its launch, the budget announced a viability gap funding to attract investment by the private sector for capacity expansion. This was intended in the hope that private investment would flow to economically backward districts. Another set of incentives proposed by the budget envisages for health cess on imported medical equipment that is likely to be utilized for this programme.
Health and wellness, the other programme that was initiated couple of years, continue to receive scant attention with an allocation of Rs. 1350 crores for the next financial year, whose allocation did not witness any rise against last years’ budget.
India, the fifth largest economy globally which aspires to become a 5 trillion dollar economy in less than five years from now, can it afford to be placed at 130th rank in human development indicator? Health, a critical component of human development, be continued to be utterly neglected with an allocation that can only match sub-saharan African countries.
The combined contribution of centre and states on health care remains abysmally low at little over one percent of GDP, with the former contributing just 0.4 percent of GDP. Although the fiscal health of the economy has demonstrated that the country’s tax-GDP ratio has multiplied several times with an expanding economy in the last two decades, but the fiscal space for health remained subdued during this time period.
While the state government is tasked with the responsibility of spending on health care, the centre has equal if not more responsibility to shouldering the onus of contributing to this endeavor.
The centre on its part must aim to fulfill its promise of accelerating allocation to health care to about 2.5 percent of GDP by 2025 as envisaged under its National Health Policy in 2017. If India were to achieve a 5 trillion dollar economy status, health must get its attention that deserves the most, as economic growth not only leads to improvement in health but the positive contribution of health on development cannot be underestimated. A productive workforce and a healthy population can transform and energise the economy to a new paradigm shift.
( Article by Sakthivel Selvaraj. He is the Director of Health Economics, Financing and Policy Unit, PHFI. Views expressed above are personal. )
