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Health Budget 2021-22: Where is the ‘Unprecedented’ Hike in Allocation?

‘The increase in allocation to the Department of Health and Family and Welfare is not extraordinary and the allocation for nutrition even saw a decrease of 27%. Hence, the claim of an increase of 137% in health spending is slightly deceptive.’
Health Budget 2021-22

In the Economic Survey 2021 citizens were promised that healthcare had finally taken centre-stage. There had been rumours of the Union Government doubling spending on health for the next fiscal year. Early during her budget speech for the fiscal year 2021-22, Finance Minister Nirmala Sitharaman said that the budget outlay for health and well-being for the upcoming year was Rs 2,23,846 crores, which, when compared to the budget estimate of Rs 94,452 crores for FY 2020-2021 is an increase of 137%, a move that has since been hailed by the leaders of the ruling party.

However, if one delves into the numbers, the budgetary allocation for healthcare has not seen a significant increase even though the ongoing pandemic has exposed the vulnerabilities and shortcomings of the healthcare system.

The Ministry of Health and Family Welfare (MoHFW) was allocated a total of Rs 73,931.77 crore which is to be shared between two departments – the Department of Health and Family Welfare and the Department of Health Research. In the budget estimate for FY 2020-2021 the allocation for MoHFW was Rs 67,111.80 crore; the amount has seen an increase of 10.16%. For the upcoming year, Rs 65,011.80 crore has been allocated to the Department of Health and Family Welfare, an increase of 9.62% from the budget estimate for the current fiscal year while the Department of Health Research has been allocated Rs 2,663 crore.

Health Budget 2021-22

IS THE 137% INCREASE A GIMMICK?

The supposed whopping 137% increase in the allocation for health and well-being, as announced by the finance minister, is being hailed by many quarters. However, this includes allocations for the Ministry of Ayush, Department of Drinking Water and Sanitation, and the Rs 35,000 crore reserved for COVID-19 vaccination.

Health Budget 2021-22

(Source: Union Budget 2021-22)

The numbers show that the increase is 137% only because of the allocation for vaccination, a significant increase in funds for the Department of Drinking Water and Sanitation, and due to the introduction of Finance Commission grants for Water and Sanitation and Health. The increase in allocation to the Department of Health and Family and Welfare is not extraordinary and the allocation for nutrition even saw a decrease of 27%. Hence, the claim of an increase of 137% in health spending is slightly deceptive.

HAS ALLOCATION FOR HEALTH ACTUALLY INCREASED?

In the budget estimate for FY 2020-2021, the allocation for MoHFW was 2.2% of the total budget. In the budget estimate for FY 2021-2022, this proportion has decreased by 0.1 percentage points to 2.1% of the total budget while the total budget has increased by 14.5%, which is to say that the allocation for healthcare has not increased as much as it should have. The allocation also saw a decline of 9.3% -- from Rs 78,866 crore in the revised estimate for FY 2020-2021 to Rs 71,268.77 crore for FY 2021-2022.

Most of the budget heads under the Department of Health and Family Welfare have seen a very slight increase, cumulatively resulting in an increase of 9.62% from the current year’s budget estimate. The allocation for the National Health Mission saw an increase of 9.5% and the allocations for National Rural Health Mission and National Urban Health Mission saw increases of 11.32% and 5.26% respectively.

Though the Economic Survey showered PM Modi’s flagship scheme AB-PMJAY with praises, like FY 2019-2020, the Union government failed to spend even 50% of the Rs 6,400 crore that had been allocated to it. Despite this, the same amount was yet again allocated to the scheme for FY 2021-2022.

There is no mention in the Union Budget of the new centrally sponsored scheme, the Pradhan Mantri AtmaNirbhar Swasth Bharat Yojana, which was announced by the FM during her budget speech. The scheme will be supposedly launched with an outlay of Rs 64,180 crores over six years. According to the finance minister, this will develop capacities of primary, secondary, and tertiary care health systems, strengthen existing national institutions, and create new institutions to cater to detection and cure of new and emerging diseases. The minister did not explain the need for this new scheme; schemes for these issues already exist and are underfunded by the Union Government.

While the Economic Survey 2021 made it seem like the Union Government had realised the importance of strengthening the structure of the healthcare system, the health budget said otherwise. The government continues to remain keen on expanding the insurance model of the Ayushman Bharat Scheme while the primary and secondary healthcare and hospital infrastructure barely gets any importance.

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