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Union Budget: The main takeaways for health

Union Budget printed on New Indian currency notes.Union Finance Minister Nirmala Sitharaman presented India’s 2020 Union Budget over the weekend, her second. Whilst it has won praise from Union Health Minister Dr Harsh Vardhan, some in the healthcare sector have expressed dissatisfaction. 

How much did the Union Budget allocate the health sector?

Among the main takeaways of the 2020 Union Budget for healthcare is a Rs 69,000 crore budget for the health sector for the 2020-21 period. This marks an increase compared to last year’s Union Budget, which saw Rs 62,659.12 crore allocated in what Health Issues India described at the time as “a marginal hike” and “far below the industry expectations of increasing spending levels to 2.5 percent of the GDP [gross domestic product] to slowly move towards global average of four percent of the GDP — an increase that has previously been promised by the government on numerous occasions and which the Modi government plans to enact by 2025.” 

The healthcare allocation includes Rs 65,011.8 crore for the Union Ministry of Health and Family Welfare; Rs 2,122.8 crore for the Ministry of Ayurveda, Yoga and Unani, Unani, Siddha, and Homoeopathy (AYUSH); and Rs 2,100 crore for the Department of Health Research. The Centre’s flagship health insurance scheme, Ayushman Bharat or the Pradhan Mantri Jan Arogyana Yojana (AB-PMJAY), received an Rs 6,400 crore infusion as the Government plans a continued expansion. Rs 6,341 crore was awarded to the initiative last year. 

Ayushman Bharat

The Budget aimed to expand the public health infrastructure in the country under Ayushman Bharat, including funding government-run hospitals in tier II and tier III cities. “Presently, under AB-PMJAY, there are more than 20,000 empanelled hospitals,” commented Sitharaman. “We need more such hospitals empanelled in tier II and III cities for poor people to benefit from them. It is proposed to set up a viability gap funding window for setting up hospitals in PPP [public-private partnership] modes in the first phase. 

“Out of 112 aspirational districts, those who are not empanelled under Ayushman empanelled hospitals, will be covered and given priority, so that in tier II and tier III cities, we have more such hospitals. This would also provide large-scale opportunities to youth.” 

Sitharaman acknowledged “a shortage of doctors in districts” and proposed to “attach a medical college with the district hospital in the PPP mode” in order to address this. For the purposes of preventive medicine under Ayushman Bharat, Sitharaman said that “using machine learning and AI in the Ayushman Bharat scheme” can enable “health authorities and the medical fraternity can target disease with an appropriately designed preventive regime.”

One of the significant proposals in the 2020 Union Budget was a tax on medical device imports. “To achieve the twin objectives of giving impetus to the domestic industry and also to generate resource for health services, I propose to impose a nominal health cess, by way of a duty of customs, on the imports of medical equipment keeping in view that these goods are now made significantly in India,” Sitharaman explained. “The cess would be used for creating infrastructure in health services in aspirational districts.” 

The Union Budget includes Rs 12,300 crore for the Modi government’s flagship sanitation scheme Swachh Bharat Abhiyan, which aims to rid the country of open defecation. In addition, Jal Jeevan Mission – which aims to increase water availability to households – has been allocated Rs 11,500 crore. 

malnutrition 20948537 - poverty and hunger concept with a fork and knife on a broken asphalt road shaped as a dinner plate as a social problem of food shortage hardships caused by financial distress or natural disaster resulting in living poor on the streets as a health risk
Steps to address malnutrition in the Union Budget have been praised by commentators.

Other schemes

Sitharaman also spoke of schemes such as ‘Fit India’ and Mission Indradhanush, the Government’s large-scale programmes to promote physical activity and immunise against vaccine-preventable diseases, and need for continued efforts to ensure they reach the target populations and make a positive impact on the health of the nation. 

In addition, the Union Budget sought to increase access to medicines. The stationing of Jan Aushadhi Kendras in every district of the country is the proposed mechanism by which this will be done. The Kendras provide medicine at affordable rates to consumers. Last year, it was reported that the Government aimed to add 2,500 Jan Aushadhi stores to its stock by this year – with the eventual aim of one store for every block. The Union Budget reaffirms this commitment. 

Union Budget a boon for nutrition

In a key move, and one which has been welcomed by experts, Rs 35,600 crore has been allocated to nutrition-related schemes. With malnutrition a major public health threat, being responsible for 68 percent of child deaths in the country, such a focus is indeed welcome. “Health of [the] mother and child are closely correlated,” said Sitharaman. “Nutrition is a critical component of health. 

“To improve the nutritional status of children (0-6 years), adolescent girls, pregnant women and lactating mothers, our Prime Minister launched a ‘Poshan Abhiyan’ [or the National Nutrition Month] in 2017-18. More than six lakh Anganwadi workers are equipped with smartphones to upload the nutritional status of more than ten crore households. The scale of these developments is unprecedented.” 

The move was praised by Dr Chandrakant Pandav, member of the National Council on India Nutrition Challenges under Poshan Abhiyan. “Severe malnourishment is a silent emergency,” Pandav said. “With a 25 percent increase in the budget outlay from Rs 29,165 crore in 2019-20 to Rs 35,600 crore in 2020-21 for nutrition-related programmes and proposed taskforce for recommending the age of a girl entering motherhood, the Government has shown intent about improving the national nutritional status of women, children of 0-6 years of age, lactating mothers, adolescent girls.” 

He went on to say that “the Government has hit the right notes and it must continue to lay down a sustainable and consistent approach to ensure that severe acute malnutrition, moderate acute malnutrition, stunting and anaemia will become conditions of the past.”

Union Health Minister Dr Harsh Vardhan praised the Union Budget, but it has been criticised by others in the medical community. Image credit: Ministry of Health and Family Welfare (GODL-India) [GODL-India (] This file or its source was published by Press Information Bureau on behalf of Ministry of Health and Family Welfare, Government of India under the ID 54064 and CNR 56840. (direct link)

How did the health community react to the Union Budget?

However, the response of the healthcare community to the Union Budget has been mixed overall.

Union Health Minister Dr Harsh Vardhan lauded the outlays for the healthcare sector. Speaking of other initiatives, “With an emphasis on holistic health, he said “the Budget underscores the importance of positive, preventive and promotive health with support for Mission Indradhanush, Fit India campaign, digital linkage of all Ayushman Bharat Health & Wellness Centres (to help wide use of telemedicine).” 

The Union Budget, he said, “indicates the strong focus of the Government on the health sector. The Budget has positioned health as a prime mover in the journey of development and growth of the country.’’

Other responses have not been so positive. Indian Medical Association (IMA) president Dr Rajan Sharma took umbrage with funding for Ayushman Bharat, stating “deficit financing of Ayushman Bharat continues. Whereas at least Rs 160,000 crores are needed to provide effective care under Ayushman Bharat, the money currently provided is gross underfunding.” IMA officials also criticised continued emphasis on health insurance as a means of promoting healthcare accessibility and the proposed use of PPPs, which Sharma described as “backdoor corporatisation of civil hospitals.” He suggested that the Government “revisit their decision.” 

Other experts weighed in unfavourably. “Overall, it is a lacklustre budget,” said Vikram Vuppala, founder and chief executive officer of NephroPlus, which provides dialysis. “There is no clarity on how the government is specifically increasing its commitment to invest in healthcare to 2.5 percent of GDP. Even 2.5 per cent is too low if compared with BRICS countries.” 

Similarly, Dr Avinash Supe, executive director of Hinduja Hospital, said “though the budgetary allocation has been increased, it has not met the expectations of the healthcare sector.” 

Specific proposals were alternately criticised and praised. For example, the proposed tax on imports of medical devices was critiqued on grounds that it “would prove a drain on the patients’ pockets, causing them to have second thoughts about being treated at government hospitals” according to Ajay Pandey, vice president of Lilavati Hospital. Others, however, supported the manoeuvre as a boon for the domestic industry. 

Whether a holistic budget for health or a mere eye-wash in the face of long-standing demands by industry players for increased funds to the health sector, the Union Budget has been presented and will lay the groundwork for the Government’s ambitions for healthcare going forward into this fiscal year. Inevitably divisive, with the roadmap laid out, it remains to be seen how India will proceed. 

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