Need to increase health budget allocation

Prof. (Dr.) Dharmakanta Kumbhakar

(The writer can be reached at drkdharmakanta@yahoo.com)

A much higher allocation has been made for the health sector this year compared to previous fiscals: Rs 90,958.63 crore, which amounts to 1.89% of the total budget estimates (Rs 48.21 lakh crore). This represents a 2.02% increase over the budget estimates of Rs 89,155 crore and a 12.97% rise over the revised estimates of Rs 80,517.62 crore for the 2023–24 fiscal year. Rs 3,712.49 crore has been allocated separately to the Ministry of Ayush, reflecting a 1.78% increase over last year’s Rs 3,674.50 crore.

However, the Finance Minister didn’t include the health sector among the nine priorities mentioned in the budget. There was no significant budget announcement related to the health sector, and no new major health schemes were introduced. Instead, focus was on the effective implementation of existing schemes. She mentioned that the administrative actions for approval and implementation of various schemes announced in the interim budget are well underway and that the required allocations have been made.

Of the total health sector outlay for the 2024–25 fiscal, Rs 87,656.90 crore has been allocated to the Department of Health and Family Welfare. The allocation for the National Health Mission (NHM) has been increased to Rs 36,000 crore from last year’s Rs 29,085.26 crore. The NHM includes a range of health schemes, and given the need for more funds to support healthcare for the poor, the allocation should have been higher.

The allocation for the government’s flagship insurance, Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), under which nearly 12 crore families (nearly 50 crore beneficiaries) receive cashless hospitalisation benefits up to Rs 5 lakh per annum per family on a floater basis in the empaneled hospital across India, has been marginally raised to Rs 7,300 crore from last year’s Rs 7,200 crore. The scheme aims to reduce out-of-pocket private healthcare expenses, which have pushed many people into poverty. However, the government’s plan to include all senior citizens above 70 years old, regardless of economic background, under AB-PMJAY will have to wait as no special budgetary allocation was made for this ambitious scheme, which was mentioned in the BJP’s election manifesto. To provide health cover to all such individuals, the government would need to allocate Rs 4,000 crore to Rs 5000 crore, which has not been included in the budget.

In the budget speech for FY 2021–22, the Finance Minister announced the launch of a new centrally sponsored scheme, ‘PM Atmanirbhar Swasth Bharat Yojana’, now renamed as ‘Pradhan Mantri Ayushman Bharat Health Infrastructure Mission’ (PMABHIM), with a total outlay of Rs 64,180 crore over a period of five years from FY 2021–22 to 2025–26. This year, Rs 3200.00 crore has been allocated for this scheme. The funds will be used to support wellness centres, set up integrated public health laboratories, and establish critical care hospital blocks in districts with a population exceeding five lakh. If implemented effectively, the scheme could transform the health scenario in India.

For the National Tele Mental Health Programme, launched by the government in FY 2022–23 to improve access to quality mental health counselling and care services, the budget allocation has been increased to Rs 90 crore from last year’s revised estimates of Rs 65 crore. Additionally, Rs 200 crore has been allocated to the National Digital Health Mission (popularly known as the Ayushman Bharat Digital Mission) in this budget, which is consistent with the 2023–24 revised estimates. The Finance Minister launched the National Digital Health Mission in 2022–23 to unify the entire healthcare network, facilitating better access for both healthcare providers and the public. The budget allocation of Rs 2,892 crore for the National AIDS and STD Control Program will undoubtedly aid in ensuring safe blood transfusion services and controlling HIV and STD cases in India. A separate allocation of Rs 3301.73 crore has been allocated to the Department of Health Research for medical and biotechnical research. The use of advanced machines and artificial intelligence in disease detection and prevention, which will stem from such research, will greatly benefit healthcare practitioners.

To make life-saving treatments more accessible and reduce the financial burden on cancer patients, the budget exempted three cancer drugs—Trastuzumab Deruxtecan, Osimertinib, and Durvalumab—from the 10% duty levy. Removing customs duty on these drugs will definitely provide relief to cancer patients. Last year, the key cancer drug Keytruda, made by Merck, was similarly exempted from customs duty. The government should also consider exempting all cancer drugs from GST to lower the cost of cancer treatment. The removal of import duty on drugs for rare and critical diseases has been a long-standing demand. Typically, medicines attract a 10% basic customs duty, while certain life-saving drugs and vaccines benefit from a 5% or complete exemption. The government should seriously consider this demand. The budget has also reduced the basic customs duty on components for medical X-ray technology items, such as X-ray tubes and flat panel detectors, under the Phased Manufacturing Program. This is a crucial step towards self-reliance and improving access to care in a cost-conscious, underpenetrated market.

The budget is a promising one in the health sector, and it underscores the government’s forward-looking approach to providing affordable, quality healthcare services to the people of India. However, there is a dire need to increase the health budget allocation, as India continues to face numerous health challenges and a strained health infrastructure. This budget allocation does not seem sufficient to address the current challenges of upgrading infrastructure and ensuring the accessibility and affordability of quality healthcare in the country. Increased government spending on the health sector is the only assured way to make health services affordable and prevent people from falling into poverty. The government should consider increasing public spending in the health sector, and hopefully, this will be addressed in future budgets.