By Suranjana Roy
The country is nearing the budget season at an accelerated pace, and there is a manifold increase in speculations around the same. Will it be populist? Will there be tax reductions to appease the middle class? What sectors are likely to see a preference in allocation? This being the last regular budget for the Modi-led Government with the 2019 elections approaching the brink, a Deutsche bank report expects social sectors to receive preferential allocations. These segments include Agriculture, Education, Labour, Power, MSME and Women & Child Development and Health & Family Welfare; the last of which will be the focus of this article.
The Ministry of Health and Family Welfare (MoHFW) has two departments: (i) the Department of Health and Family Welfare, and (ii) the Department of Health Research. The Department of Health and Family Welfare is responsible for functions including (i) implementing health schemes, and (ii) imparting medical education and training. The Department of Health Research is broadly responsible for conducting medical research. The Ministry of Health and Family Welfare ranked eighth in terms of the total budgetary allocation in 2017-18. This article analyses the financial allocation trends, key issues concerning the health sector and how we could expect the upcoming budget to deal with the same.
Financial overview
Taking into account the budgetary allowances of the central government, it can be seen that there is an upward trend in the allocations received by the MoHFW over the last five years. In 2017-18, it received 23 percent more than that in 2016-17. The Department of Health and Family Welfare received the highest allocation (97 percent) at Rs 47,353 crore while the Department of Health Research secured Rs 1500 crore (three percent). Therefore, a substantive focus and increase in the allocation could be expected in the budget for 2018-19.
However, a mere increase isnt sufficient for a progressive budget. The upcoming budget needs to address many issues which India is still plagued with despite increments in planned funding. Budgetary data shows that Indias public health expenditure as a percentage of the GDP is way lower (0.3 percent) than other growing nations of the world (including Brazil and China). Public sector investment in the same is the lowest globally (1.5 percent). The World Bank measures public health expenditure using the Universal Health Coverage Index and India ranked 143th out of 190 countries. Despite being classified as a low middle income country, India spends less than the low income countries to combat diseases, a burden which is higher than most of Indias peers. This growing healthcare crisis could be attributed to the mismanagement of funds, where a good percentage of the same remains unutilized. The reasons for this could be delays observed in fund allocation under the National Health Mission in states, lack of efficient executive agency to plan the use of funds, and a slow pace in expenditure to procure equipment, machinery and other capital works.
The public sector accounts for only 30 percent of the total healthcare expenditure in the country, which is significantly lower than 42-58 percent in Brazil, 58 percent in China, 52 percent in Russia, 50 percent in South Africa, 48 percent in the USA and 83 percent in the UK as per the WHO reports. Investment in building and maintaining public health infrastructure needs priority in the forthcoming budget for FY 2018-19, an ICRA report says.
Budgetary goals
The budget could be expected to cater to the government’s increasing focus on eradicating diseases in the area of public health and improving healthcare parameters. This was marked by an action plan to eliminate kala-azar and filariasis by 2017, leprosy by 2018, tuberculosis and measles by 2020 as mentioned in the 2017-18 budget. It is expected that the upcoming budget will increase the allocation for addressing the increasing burden of non-communicable diseases (NCDs) such as diabetes, cardiovascular diseases and hypertension, a major cause of mortality in the country. The considerable impact of the NCDs makes it imperative to focus on prevention and preventive healthcare. Along with this, a focus on child health and maternity is essential to achieve the goals of sustainable development.
In line with the National Healthcare Policy 2017, the allocation is expected to increase the number of patient beds in the country with the creation of new hospitals. It also calls for transforming micro units of health centres at the district and town level to provide improved facilities using existing infrastructure. The lack of long-term financing options for infrastructure expansion is a supply-side obstruction. Therefore, there is a need for lower rates of interests for capacity building in the health sector. ICRA suggested that “new infrastructure developed through incentives can also be utilized for catering to the growing medical tourism in the country, which is expected to continue to grow by 20 percent over the next five years, generating export revenues and employment.“
The way forward
In the previous budgets, the government has focussed on a lot of public health issues, but it still lacks emphasis on private sector investment in healthcare. The private sector provides nearly 80 percent of out-patient and 60 percent in-patient care in our country. Tax incentives are a major tool to boost this sector. The reduction of input service tax paid by clinical establishments for using various services, in turn, reduces the cost of medical treatments. It also expands the scope to include support services like pathological services, dermatology, logistics, etc. Subsidies should be provided for operating technology-driven healthcare services (e.g. telemedicine, radiology) in remote areas to improve accessibility and affordability of quality healthcare.
The financial overview and the budgetary goals are a means to an end: To increase public health spending to 2.5 percent of the GDP by 2025. It is a step towards ensuring healthcare services for all Indian citizens. All governments implement schemes to uplift the underprivileged, especially the ones below the poverty line. However, it is imperative for the projects to focus on people merely above the poverty line too, to ensure an overall higher standard of living. In accordance with the NHP17, there is a policy shift from sick care to wellness, a perspective around which we hope the budgetary allocations towards the health sector will revolve.
Featured Image Source: kenteegardin on Visual hunt / CC BY-SA