This year’s budget estimate for India’s Health Ministry is at Rs 67,111.80 crore. This is up by just 3.75% from last year’s budget estimate.

Health budget 2020 has sucked funds from core areas and passed on to health insuranceCourtesy: PTI
Health Health Budget Sunday, February 02, 2020 - 12:12

India’s healthcare budget over the last few years appears to be in a cycle of “robbing from Peter to pay Paul.” Money has systematically been moved from core components like maternal and child health, and passed on to health insurance, for the government’s Ayushman Bharat scheme. The annual budget for 2020-2021 announced on Saturday shows the same trend.

Despite many statements by Finance Minister Nirmala Sitharaman in her speech today, that healthcare was an important element of the three pillars of this new budget, the Health Ministry’s allocation has barely budged. Here is the big number: This year’s budget estimate for India’s Health Ministry is at Rs 67,111.80 crore. This is up by just 3.75% from last year’s budget estimate, which was Rs 62,659.12 crore.

The other major shift in healthcare announced in the budget is that the government is looking to withdraw from public health in district hospitals, and hand over some of that to the private sector in a public-private partnership model. This move has been designed to expand the Ayushman Bharat scheme.

National Health Mission’s budget barely changes

For years, nearly half of the Health Ministry’s budget has always been spent on core activities in the National Health Mission (NHM) for urban and rural areas. The NHM focuses on disease control as well as maternal and child health. But the budget for the NHM has been stagnating over the last few years, while money for the Ayushman Bharat scheme has been increasing.

So in this year’s budget, NHM has been allocated Rs 33,400 crore. This is a drop by 1.15% of last year’s revised budget estimate, where the ministry in fact revised its estimate for NHM would to Rs 33,789. The usual trend with important budget heads is to increase allocations, based on the previous year’s revised estimate, but with NHM, the reverse is taking place.

Health Budget, 2020-21
HeadBudget Estimate 2019-20 (in crores)Revised Estimate 2019-20 (in crores)Budget Estimate 2020-21 (in crores)Change from Budget Estimate (in %)Change from Revised Estimate (in %)
Rural Health Mission2703927833.6270390-2.854822948
Urban Health Mission95095095000
Ayushman Bharat6400320064000100
Total Health Budget62659.1262659.1265011.83.7547287613.754728761

Under the NHM, the rural health mission’s budget has in fact stayed the same – It was allocated Rs 27,039 crore in 2020-2021 and also in 2019-20. Once again, this is even though the revised estimate last year was higher by nearly Rs 800 crore. But this year’s budget allocation has not budged.

Meanwhile, the allocation for the NHM’s urban health mission has stayed the exact same as last year – Rs 950 crore, which was the revised estimate for 2019-20 as well.

Ayushman Bharat is rewarded richly

This brings us to Ayushman Bharat, which is one of the only heads in the entire health budget which bucks this pattern of stagnancy or decrease.

On the whole, the scheme has been allotted Rs 6,400 crore in this year’s budget – and while this is the exact same amount that was also allotted in last year’s budget, seemingly a 0% increase, it’s important to note that the revised estimate for last year is Rs 3,200 crore – the scheme's allocation this year has doubled its revised estimate last year. In the year before, ie., 2018-19, the actual expenditure on the scheme was a little less than Rs 2,000 crore. We can see that the scheme has gone from about Rs 2000 crore to Rs 6400 crore in just three years of operation.

So on the one hand, NHM which needs a lot of money, reflected even in its revised budget, was not granted an increase. But Ayushman Bharat, which made use of just half the budget allocated to it last year, was still given a huge chunk.

Ayushman Bharat scheme, which was announced in various iterations since 2017 and launched in 2018, has promised an insurance coverage of Rs 5 lakh per family for 10 crore families. The government has called it the ‘world’s largest healthcare scheme.’ While Ayushman Bharat promises to cover 500 million people, it also leaves out about 700 million of the population.

The scheme also promised 1.5 lakh health and wellness centers. In this budget, for rural areas, Rs 1,350 crore has been allotted for this and Rs 250 crore for urban areas. This has barely changed between last year and this year.

Government to boost private sector hospitals

In 2017, the NITI Aayog announced a plan to privatise some parts of district hospitals for the provision of treatment for non-communicable diseases. Four states – Haryana, Punjab, Odisha and Tamil Nadu – were reluctant to participate, saying that this model would not hold private players accountable.

In 2019, the government announced plans to make hospitals into an ‘industry’ and to give ‘viability gap funding’ to private players to set up hospitals in areas they may not want to venture into, all for Ayushman Bharat.

Now, this budget has announced a cozy deal for private hospitals, which builds on these earlier announcements. The Finance Minister said that viability gap funding would be given to private players to set up hospitals, in marginalised areas which don’t have hospitals empaneled under Ayushman Bharat. She also said that medical colleges will be attached to these district hospitals in a public-private partnership.

However although the government has specifically announced a boost to medical education, this is not entirely reflected in the budgetary allocation. One budget heading for this is ‘Human Resources for Health and Medical Education,’ which looks into upgrading state government medical colleges and new medical colleges at district hospitals. In this budget it has received Rs 4,686 crore. This has increased just 4.13% from 2019-2020 revised estimate which was Rs 4,500 crore.

But there has been a substantial increase in funding for the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) which intends to build AIIMS and government medical colleges. Rs 6,020 crore has been allotted for this, in 2020-2021. This is up by Rs 1,287 crores, from Rs 4,733 crore from last year’s revised estimate.

Boosts to Swach Bharat and Jal Jeevan will also impact healthcare

Although not managed by the Health Ministry, the government’s focus on ending open defecation via the Swachh Bharat Mission and the Jal Jeevan Mission which will bring piped water to houses, will both have major impacts on health and sanitation.

On open defecation, Finance Minister Nirmala Sitharaman announced that Swachh Bharat Mission would get Rs 12,300 crore in 2020-2021. The Jal Jeevan Mission has been allocated Rs 11,500 crore.

Nutrition of mothers and children is also not managed by the union ministry and is largely overseen by the Ministry of Women and Child Development. The government has allotted about Rs 35,600 crore for nutrition related programmes.

The government had earlier suggested a ‘bridge course’ to meet India’s shortage of doctors especially in rural areas. By this course, the government proposed that practitioners of traditional medicine would be able to legally practice some western medicine. This met with a lot of opposition from medical bodies who said this would legalise quackery.

Now this budget has proposed another kind of bridge course for increasing the numbers of nurses, paramedical staff and care-givers who might want to work abroad. About Rs 3,000 crore has been set aside for skill development, including for this bridge course.

The government has also announced a health cess linked to medical devices. Since 2017, the government has been closely regulating the prices of medical devices with an eye on boosting the domestic medical device manufacturing sector. On Saturday, the Finance Minister announced a new customs duty of 5% on imported medical devices and the money collected from this would be channeled into “creating infrastructure for health services in the aspirational districts.”

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