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Economy 07-Feb, 2024

Health: A Subject Still Lacking in Union Budget 2025

By: Damini Mehta

Health: A Subject Still Lacking in Union Budget 2025

Source: Getty Images

General government (union and states) health expenditure as a percentage of GDP jumped from 1.3 per cent in 2015-16 to 2.1 per cent by 2022-23 Budget estimates. However, in terms of budgetary expenditure of the Union government, expenditure on healthcare saw a mere 13.8 per cent jump in 2024-25 compared to revised estimates for 2023-24.

With the Modi government’s announcement to award Former Chief Minister of Bihar, Late Karpoori Thakur India’s highest civilian honor, Bharat Ratna, the BJP government appears to be moving one step closer towards social justice. Since the formation of the first Modi-led BJP government in 2014, the party has taken several measures that mark an attempt to improve the lives of the less advantaged. Some of them involve refurbishing and rebranding schemes and programmes from the UPA regime like MGNREGA while others involve pioneering measures such as the PM Kisan Samman Nidhi Yojana. The Interim Budget 2024-25, released by the Finance Minister on 1st February 2024 puts a question mark on the government’s efforts in social justice and welfare with a decline in funding for key areas such as healthcare and education. 

In spite of repeated demands by experts, budgetary allocations for health and education have remained below expectations. Of the Rs 1,16,417 crore allocated for education in the previous budget, the government only spent Rs 1,08,878 crore. For health, while the budgeted expenditure was Rs 88,956 crore it actually spent only Rs 79,221 crore in FY 2023-24. 

The National Health Policy, 2017 envisages “the attainment of the highest possible level of health and well-being for all at all ages, through a preventive and promotive healthcare orientation in all developmental policies, and universal access to good quality healthcare services without anyone having to face financial hardship as a consequence. This would be achieved through increasing access, improving quality, and lowering the cost of healthcare delivery.” The Policy sets a target to increase Government’s health expenditure from then 1.2 per cent to 2.5 per cent of GDP by 2025. The Fifteenth Finance Commission gave similar guidelines recommending that public health expenditure of Union and States together should increase in a progressive manner to reach 2.5 per cent of GDP by 2025.

Budget estimates show that 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.

According to government estimates, the share of government health expenditure in total health expenditure has seen a considerable jump from 28.6 per cent in FY14 to 40.6 per cent in FY19. Figures from the Economic Survey 2022-23 also show the positive impact of increased government expenditure on healthcare in the form of a declining out-of-pocket expenditure for citizens. Out-of-pocket expenditure as a percentage of total health expenditure declined from 64.2 per cent in FY14 to 48.2 per cent in FY19. 

General government (union and states) health expenditure as a percentage of GDP jumped from 1.3 per cent in 2015-16 to 2.1 per cent by 2022-23 Budget estimates. However, in terms of budgetary expenditure of the Union government, expenditure on healthcare saw a mere 13.8 per cent jump in 2024-25 compared to revised estimates for 2023-24. The Ministry of Health & Family Welfare received an allocation of Rs 90,171 crore in the Union Budget 2023-24, compared to the revised Budget estimate of Rs. 79,221 for 2023-24.

Broad targets set by the Budget 2025 for healthcare include promoting vaccination for girls (aged 9 to 14) to prevent cervical cancer, launching a comprehensive maternal and child healthcare programme, reform Anganwadi centers to improve nutrition delivery, early childhood care, and development and extending healthcare coverage under the Ayushman Bharat scheme to caregivers, viz. ASHA workers, Anganwadi workers and helpers amongst other measures. 

Developed countries such as the United Kingdom, New Zealand, Finland, Netherlands and Australia spend over 9 per cent of their total GDP towards health. Similarly, Japan, Canada, Switzerland, France, Germany incur at least 10 per cent of their total GDP on health services. India lags far behind when it comes to spending on healthcare of its citizens. The budget expenditure indicates poor commitment on the part of the Union government towards improving healthcare facilities in the country and lacks inspiration when it comes to states making an equal or more contribution to better health care facilities. Moreover, increased government expenditure on healthcare will directly contribute to reduced cost of healthcare and less dependence on private health services for citizens.

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