While we are still a long way from ramping up India’s healthcare spending from the existing 1.6 per cent (central and state government spending combined) to the targeted 2.5 per cent under the National Health Policy, this Budget has taken steps in the right direction.
Higher public healthcare spending is a prerequisite for ensuring a smaller out-of-pocket expenditure on health by people. In India, 17 per cent of the population spends more than 10 per cent of its household income on healthcare-related expenses versus 13 per cent globally.
Health infrastructure
A chunk of the increased outlay announced in the budget will be spent on water and sanitation — an additional ₹96,000 crore, over that budgeted for this year.
Water and sanitation are a state subject and the allocation includes transfers to state governments. The Centre will launch the Jal Jeevan Mission for ensuring universal water supply with 2.86 crore household tap connections and liquid waste management in 500 cities. Money will also be spent on wastewater treatment.
Apart from that, the PM Atmanirbhar Swasth Bharat Yojana (outlay of ₹64,180 crore over six years) is expected to strengthen the State- and district-level health infrastructure, among other things. The scheme proposals include setting up health and wellness centres and integrated health labs in all districts in 11 states.
A wider availability of affordable public health labs could pose competition to private diagnostic companies.
Covid-19 allocation; no cess
It was expected that the Government would introduce a ‘Covid cess’ to fund the cost of vaccination. However, the budget has set aside ₹35,000 crore for this. While the amount may not be enough to inoculate the entire population (which may not even be required), it is likely to be adequate for the intended population. Let’s consider some numbers for a perspective.
If we assume that 50 per cent of the population will be inoculated at the Government’s expense, it could entail an expenditure of roughly ₹28,700 crore with additional costs for storage and transport. This calculation is based on Serum Institute of India’s vaccine cost of ₹420 for two doses.