Budget 2023: Govt's health budget gets mere 12.6% increment; will public health suffer?

Ministry of Health & Family Welfare received an allocation of Rs 89,155 crore in the Union budget 2023-24, an increase by 12.6 per cent compared to the revised Budget estimates for 2022-23. 

Announcing a slew of measures for the Union Health Ministry, the nodal ministry tackling the worst health crisis in last many decades in the form of covid-19, Finance Minister Nirmala Sitharaman said the government aims to focus on skilling, research and innovation in the sector as the pandemic heightened the need.   

According to the Economic Survey 2022-23, Central and State Governments’ budgeted expenditure on the health sector reached 2.1 per cent of GDP in FY23 (BE) and 2.2 per cent in FY22 (RE), against 1.6 per cent in FY21. However, in the current budget, which is the last full budget of the Modi 2.0 government, the budgeted expenditure on the health sector stood at around 1.98 per cent of the GDP. This is when the National Health Policy, 2017 envisages raising public health expenditure to 2.5 per cent of the GDP in a time bound manner by 2025. 

“Continuing modest allocation towards the healthcare sector leaves India’s healthcare spend as a percentage of GDP well below the world average and other developing and developed nations,” said Shamsher Dewan, Senior Vice President & Group Head - Corporate Ratings, ICRA Limited. 

India’s expenditure is more than countries like Nepal and Bangladesh and Pakistan. When compared to countries such as United Kingdom, New Zealand, Finland, Netherlands and Australia that spend over 9 per cent of their total GDP towards health, India lags much behind. Similarly, Japan, Canada, Switzerland, France, Germany incurs at least 10 per cent of their total GDP on health services. At the same time, US spends around 16 per cent of its GDP for health. 

“Health allocation in the budget must lay emphasis on revamping the public healthcare system and technology. Enormous amount of capacity will have to be created in order to reduce the out of pocket expenditure which has been rising because of the huge charges taken by the private sector,” said Arup Mitra, Professor of Economics, South Asian University (SAU), New Delhi. 

“The health care infrastructure, particularly in the rural areas, needs immediate attention. For a wide range of diagnostic tests, the rural population has to migrate to the urban areas. Given the limited capacity in the public sector, their dependence on the private sector becomes an obvious choice. The recent Budget should have considered these aspects to a much larger extent,” he said. 

As per the Rural Health Statistics released by the union health ministry in 2021, the country has total of 5439 primary health centres (PHCs) in the urban areas and at least 3966 PHCs in the tribal areas as on 31st March 2021. NITI Aayog, the government policy think tank in a report released in 2021 that 50 per cent of India’s population has access to 35 per cent of hospital beds. The report titled ‘Reimagining Healthcare in India through Blended Finance’ indicated that there is a dire need to strengthen healthcare infrastructure in order to achieve universal health coverage.

In 2022-23, the only Covid-19 specific allocation under this Ministry is Rs 226 crore allocated towards the Insurance Scheme for Health Care Workers fighting COVID-19. In addition, the Ministry of Finance has allocated Rs 5,000 crore towards COVID-19 vaccination. As per the revised estimates of 2021-22, the Ministry of Health and Family Welfare has allocated Rs 16,545 crore towards COVID-19 related expenditure. 

“The budgeted increase in healthcare expenditure of overall 15 per cent does not seem to enough to tide over the current challenges of upgradation of infrastructure and providing accessibility and affordability for quality healthcare in the country.  We are looking forward to clear indications of the steps to be implemented for healthcare infrastructure development and move closer towards universal health coverage with increased expenditure as a percentage to GDP. It would have been better if there were tax exemptions for healthcare, which is vital to reduce healthcare expenses and out of the pocket spending,” commented said Gautam Khanna, CEO P.D. Hinduja Hospital & Chairman FICCI Health Services. 

While presenting the Union Budget 2023-24 in Parliament on Wednesday, Sitharaman announced that 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014. 

The minister said that a Mission to eliminate Sickle Cell Anaemia by 2047 will be launched, which will entail awareness creation, universal screening of 7 crore people in the age group of 0-40 years in affected tribal areas, and counseling through collaborative efforts of central ministries and state governments. 

On Medical Research, Sitharaman said that facilities in select Indian Council of Medical Research (ICMR) Labs will be made available for research by public and private medical college faculty and private sector R&D teams for encouraging collaborative research and innovation.   

Burden of non-communicable diseases (NCDs) continue to rise in India. NCDs contribution to all deaths in India shot up to 61.8 per cent in 2016 from 37.9 per cent in 1990, according to a study by the Indian Council of Medical Research (ICMR) in 2021.  National Family Health Survey (NFHS-5) released by the ministry of health and family welfare in May 2022 found that the prevalence of overweight or obesity among men and women, an indicator to the prevalence of NCDs in India rose around three to four percentage points during 2019-21 compared to the levels reported in 2015-16. 

Also, according to the Statista, in 2022, the share of deaths related to non-communicable diseases in India was close to 70 percent. The share of premature deaths on the other hand attributed to the non-communicable category was over 20 percent. The share of deaths related to childhood cancers has consistently been on the rise over the past decade in the country. 

Despite these announcements, allocation towards healthcare doesn’t seem to be adequate to achieve the universal health coverage and tackle the rising disease burden, public health experts have said. “Most boring budget in so far as health sector is concerned. Barring setting up 157 nursing colleges nothing else for health that is crying for huge capital investment and some financial risk protection for the lower middle classes. Yet another year gone by. Very disappointing,” said K. Sujatha Rao, former Union health Secretary and a public health expert in a tweet. 

Also Read: Decoding FM Nirmala Sitharaman's Budget math: Here's how the govt can maintain healthy fiscal deficit target