Healthcare allocation in Budget 2020 5.7% lower than last budget

The healthcare allocation in the Union Budget 2020-21 is just a modest increase of 5.7 per cent to Rs 67,484 crore from the revised estimate of Rs 63,830 crore in the previous year and falls short of the target of spending 2.5 per cent of GDP on healthcare, experts note.

"It is unfortunate that the allocation of Rs 69,000 crore for the sector is only just one per cent of GDP, which will be highly inadequate for any major leap forward in the sector", said Dr Azad Moopen, founder chairman of Aster DM Healthcare.

FULL COVERAGE: Union Budget 2020

With a nominal estimated GDP growth of 10 per cent, this also translates into a fall in the public healthcare expenditure as a percentage of GDP and thus, the public sector spend on healthcare will continue to lag, at below 1.5 per cent of GDP, said Shubham Jain, Group Head & Senior Vice President, Corporate Ratings, ICRA. "The increase in healthcare spend was a healthy 15 per cent in the previous budget and the current allocation is much below expectations", he said.

Dr. Prathap C Reddy, Chairman, Apollo Hospitals Group said the Budget has announced innovative initiatives that will enhance ease of living, improve the health quotient and boost opportunities for education and job creation, for all sections of our society and meet the expectations of an aspirational India.

"Though there has been a gradual increase in the percentage of allocation, the percentage of GDP spent on healthcare is a concern," said Dr Vishal Beri, CEO, Hinduja Hospital.

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Experts said despite the limitations, announcements like eradication of tuberculosis by 2025, Viability Fund Gap support for hospitals in Tier 2 and 3 cities to meet the requirement for Ayushman Bharat, PPP model hospitals in 112 aspirational districts and making 2,000 essential medicines available through Jana Aushadi stores to common man will benefit the healthcare sector.

Viability Gap Funding to set up hospitals and medical colleges in the most undeserved districts will go a long way in addressing the shortage of beds and enhance geographical accessibility under the PMJAY programme, said Dr. Rana Mehta, Leader - Healthcare. "Public Private Partnerships will help both unlock capacity and ensure cost effective delivery of care in rural areas. However innovative business models will be critical for widespread private sector participation", he said.

The Budget allotment of Rs 3,000 crore for skill development sector will help to further develop skills of Indian healthcare practitioners to match the international standards, said Gautam Khanna, CEO, PD Hinduja Hospital and Medical Research Centre.

"The overall thrust on ease of doing business in terms of regulatory simplification and policy stability should help to realize the potential of the industry going forward," said Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance.

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