Home News What A Close Reading of Budget 2021's Outlay for Healthcare Sector Reveals

What A Close Reading of Budget 2021's Outlay for Healthcare Sector Reveals

File photo of finance minister Nirmala Sitharaman

Despite the significant burden of diseases like tuberculosis, polio along with sporadic outbreaks of infectious diseases like chickenpox — the Indian healthcare system has always remained largely deficient in resources. The faults in our healthcare system became more obvious with the Covid-19 pandemic.

In light of the pandemic, that put immense pressure on our healthcare systems, all eyes were on the Union Budget 2021 with hopes for a bigger allocation for the Health Ministry. Finance Minister Nirmala Sitharaman on Monday allocated a budget of Rs 2,23,846 crore in budget estimate 2021-22, as against the 2020-2021 budget estimate of Rs 94,452 crore — a whopping overall increase of 137 per cent. It included Rs 35,000 crore for immunisation with Covid-19 vaccines.

Sitharaman underlined that the government will take a “holistic approach” this time by strengthening three critical areas – preventive health, curative health and well-being.

However, a closer look at the budget allocation reveals that in 2020-2021 the health ministry’s budget estimate was Rs 67,112 crore, and they ended up spending Rs 78,866 crore. This year’s budget estimate, for the health ministry stands at Rs 71,269 crores, a sum lower than the revised estimates of 2020-21.

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The Rs 2.23 lakh crore will include expenditure on six components in varying proportions — Department of Health & Family Welfare (31.83 per cent) with finance commission grant (5.89 per cent), Department of Drinking Water & Sanitation (26.81 per cent) with finance commission grant (16.09 per cent), vaccination (15.63 per cent), health research (1.89 per cent), Ministry of AYUSH (1.32 per cent), and, nutrition (1.20 per cent).

The departments which received an enormous boost of 179 per cent is the drinking water and sanitation, while the allocation for health and family welfare increased by 9.62 percent. However, nutrition witnessed a drop of 27 per cent.

Sitharaman said that Rs 64,180 crore would be allocated to the new scheme PM Atma Nirbhar Swastha Bharat Yojna with an outlay of six years. This implied that each year only an additional Rs 10,000 crores will be pumped in the health sector each year. It will be implemented in addition to the National Health Mission and will provide support for 17,788 rural and 11,024 urban health and wellness centres — developing the capacities of primary, secondary, and tertiary care health systems.

“It will strengthen existing national institutions, and create new institutions to cater to detection and cure of new and emerging diseases,” Sitharaman said in her speech.

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The government added that the allocation will also be utilised in supporting health and wellness centres, setting up of integrated public health laboratories, establishing critical care hospitals and for strengthening the National Centre for Disease Control.

Dr Sakthivel Selvaraj, director of the Health Economics, Financing and Policy, Public Health Foundation of India said, “The major intervention which happened and which was well-needed is Rs 35,000 crore for Covid-19 vaccination and we welcome it. Leaving this aside, the allocations have been modest. However, around 4 per cent has been allotted to the National Health Mission which is a major concern. The only silver lining in addition to vaccination is allocation of additional around Rs 12-13,000 crore as the Finance Commission Grant.”

Welcoming the government’s allocation, Health Minister Harsh Vardhan said, “The experiences of the country’s yearlong fight with Covid have shaped the Union Budget. This will give a tremendous boost to India’s health infrastructure. Investment on Health Infrastructure in Budget 2021 has increased 2.37 times or 137 per cent.”

Meanwhile, the allocation for the health research department which includes ICMR has also not witnessed any significant rise from Rs 2,100 crore estimates of last year — it has risen marginally to Rs 2,663 crores for 2021-22. As compared to 2020-21, the allocation to PMJAY, which includes Ayushman Bharat and health and wellness centres was worth Rs 6,400 crore and the budget has remained unchanged for this financial year, despite constant revisions in budget estimates.

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