Indian health sector is an ignored child & needs much more care, as long as its relation with Union Budget 2016 is concerned
The government of India has announced $4.81 billion or 297 billion rupees in the union budget allocation (2016), which is roughly 2 per cent more than its previous financial year for its health sector. Experts comment it as the ‘tight leash’. The union government has asked the state government to contribute more funds to the health programs which is one of the most important programs for the country.
The 2016 Union Budget has allotted $4.81 billion i.e. 297 billion rupees for this sector. The amount is just 2 % higher than the previous government’s revised & last financial budget. Prime Minister Modi’s vow to achieve the goal of revamping health sector and succeed in universal health coverage does not find the match with this paltry 2 % increase for fulfilling the commitment of making medical services reachable to the poor.
The fallacy of the dream project
As per the allocations of this year’s budget, health sector is not adequately allocated in the budget. Until health is prioritized, the promise of universal health will remain far away from reality, as commented by the Public Health Foundation of India’s President, K.Srinath Reddy, while talking to the Reuters.
The comparative budgetary provisions in USA & China
USA spends 8.3 per cent of its budgetary provision for the health sector; China spends 3 per cent of its GDP while India spends merely 1 per cent of its GDP. Of course all the individual Indian states have their own budgetary provisions for their health sectors.
The paltry situation
During the last 2 decades, India has been shining with its economic growth, but all the successive governments could not be generous to the health sectors in their budget allocations.
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Over and above, the states have been asked to contribute to the national Health Mission. In spite of these foul weathers, the government is planning to open 6 new AIIMS (the large public hospitals) across the country. But the financing of these hospitals are not under the ambit of sufficient funds. The total costs are budgeted within the cost of Rs. 33,150 crores. Even the health ministry officials are very much disappointed with the “discouraging” budgetary allocation to this important health department.
Synopsis of health sector & its connected departments’ budget allotment
The budget allocation for the financial year 2016 & 2016 are 332,162 crore for health & its related sectors. If compared with last year’s budget (351.63 billion rupees) this year’s budget allocation for this health sector is a bit less, but the tax deduction in the premium of health insurance is changed as the accessibility and affordability of the individuals which are aimed at boosting health insurance schemes in the country.
The criteria’s are listed here below:
a) Deductions from health insurance has been hiked to 25,000 rupees, it was 15,000 rupees in the last budget. The senior citizen will get 30,000 rupees benefit from tax deduction; the figure was Rs. 10,000 in the outgone yearShah, views that correction of the inverted structure is a right move, but its impacts on the Pharmaceutical industry is yet to be seen in practice. Under active pharmaceutical ingredients (API) movement, the union Government is upbeat to encourage raw materials manufacturing. But in case the raw material duty is brought down to a great extent, the new manufacturing prospect under Indian Pharmaceutical Alliance will get a bang for producing the raw materials in the domestic market.
However, no direct benefit has been offered to pharmaceutical industry in this budget, although there are some positive lining in the health sector.
The middle class—the budget—and the health sector
The middle class has been given different types of incentives towards their net disposable income, which may result in more investments towards health sector. Chairman and Managing Director of Biocon, Kiran Mazumdar-Shaw views the budget as not mere directional rather it is destination focussed.
Pharmaceutical Industry’s hits & misses
Hits: - i) Health covers have been extended by initiating the health insurances. By this way ‘out of pocket spending’ can be reduced.
ii) As the government has linked the “Swatch Bharat Abhijan” to hygiene and the allocation in the budget is in the tune of Rs. 33,150 crore for setting up 5 AIIMS in 5 states, the union health ministry is sure to harvest its fruit in the next financial year. It is believed that these states will have quantum jumps. Even the neighbouring states will also have its benefits. According to Mr. J P Nadda, the Union Health Minister, the ministry is up in to its toes in implementing these schemes within a shortest possible time.
The minister is also in the view that the focus on “Swatch Bharat Abhijan” is going to flatter an overall health awareness program throughout the country. The minister termed the budget as progressive, pragmatic, balanced and pro-people. He is optimistic that the budgets will bring in all-round social and economic growth because of its outcome orientation and inclusiveness.
Joint Managing Director, Apollo Hospitals Enterprise, Sangita Reddy is in the opinion that although the budgetary allocation’s percentage is not increased, the EPF fund has been enabled by the budget, which is a good sign for the health care through the budgetary provision.
Other than this, universal health coverage and health insurance has got the strategic and unique boosts through this budget
Misses: - 1) R & D could have been encouraged at least to some extent. No R & D support in the Pharmaceutical industry has been envisaged in this budget.
2) No extension of reduction in minimum alternate tax (MAT) has been done for R & D.
3) Education cess, like health cess, could have been initiated. This is noticed as the big missed opportunity, because health sector is suffering from funds provisions..
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