India Needs Big Increase in Health Budget, Better Public Healthcare

New Delhi: In the years that the Narendra Modi-led National Democratic Alliance government has been in power, the budget allocation for the Ministry of Health and Family Welfare (MoHFW) has not seen any significant increase. The government has allocated more and more money to expand the government’s flagship health insurance scheme, Ayushman Bharat-Pradhan Mantri Jan Aarogya Yojana (PMJAY).

In the expenditure budget for FY 2020-21, the MoHFW was allocated Rs 67,111.80 crore, out of which Rs 65,011.80 crore were allocated to the Department of Health & Family Welfare and Rs 2,100 crore were allocated to the Department of Health Research. The allocation for the Department of Health and Family Welfare saw an increase of 3.75% from FY 2019-20.

Even before the pandemic became a threat in the country and the skeletal structure of India’s public healthcare started crumbling, experts had said that this minimal increase in the health budget was not enough to achieve the government’s target of making healthcare expenditure 2.5% of GDP by the year 2025. The current expenditure on healthcare in India, combining the Union and state governments, is only about 1.25% of GDP, amongst the lowest in the world. According to Oxfam’s ‘Commitment to Reducing Inequality’ report, India ranked fourth from the bottom in health spending.

In December 2020, Union Finance Minister Nirmala Sitharaman had said in a statement that investment in health is going to be absolutely critical and would get top priority in Union Budget 2021, with the government looking into not just increasing health infrastructure but also human resources for health toward making lives safer and achieving a reduction in out of pocket health-related expenses.

However, as has been seen during the previous Union Budgets, the government's focus has been slowly shifting to privatising primary and secondary healthcare. In her budget speech for FY 2020-21, Sitharaman had talked about a proposal for setting up hospitals in the Public Private Partnership (PPP) model, so that poorer people from tier-2 and tier-3 cities could be bought under this scheme.

The primary and secondary healthcare centres in most of the states are severely understaffed, have poor infrastructure, as a result of which poor people are forced to go to private clinics and hospitals for treatments, making out-of-pocket expenditure on healthcare very high. As much as 70% of outpatient care and 58% of inpatient care is used in private facilities.

The out-of-pocket expenditure on health care in India is more than 60% of all expenditure on health in the country, among the highest in the world – whereas the World Health Organisation  recommended norm is 15-20%. People are forced to spend on healthcare even as they are selling off their assets, reeling under debts, and hence sinking deeper into poverty.

According to the Economic Survey 2020-2021, the percentage of the poorest utilising prenatal care through public facilities has only increased from 19.9% to 24.7% from 2004 to 2018. The percentage of the poorest accessing institutional delivery increased from 18.6% to 23.1% and from 24.7% to 25.4% for post-natal care. The poorest utilising inpatient care and outpatient care has increased from 12.7% to 18.5% and from 15.6% to 18.3%. However, such low amount of increase in a time period of almost one and a half decade points out that people from the poorest sections avoid availing treatment through public facilities.

When the pandemic exposed the vulnerabilities of the public healthcare system, Prime Minister Narendra Modi’s pet Ayushman Bharat Scheme did not help the poor much either. According to data released by the National Health Authority, PMJAY utilisation for hospitalisation among the poor declined by 64% during the early lockdown, and by 51% during the full 10-week lockdown, including 25% for deliveries and 64% for cancer care. The National Health Mission data suggests immunisation, routine check-ups of pregnant women and care for serious conditions and communicable diseases also declined in the lockdown period.

Unless the government significantly increases the allocation for healthcare in FY 2021-22, and strengthens the framework of the public healthcare system, and there is a significant improvement in infrastructure and increase in manpower, the primary and secondary healthcare system in the country will continue to crumble, even though the worst phase of COVID-19 is seemingly over.