At a time when the country is grappling with perilous effects of demonetisation, Finance Minister Arun Jaitley was expected to be sensitive to the suffering of millions of Indians and enhance the social safety nets in the form of expansion of employment, education, health, food and nutrition. He has, instead, made some nominal increases in the rural sector and offered tax sops to the middle class. This increase in allocation appears mere tokenism when we compare it to price increases and expenditure cutbacks over last few years.
For instance, an additional Rs 10,600 crores have been allocated for health in this budget compared to previous year. But, when adjusted against prices accounting for inflation, this allocation is not even equal to that made in 2011-12. Given the severe cuts in the overall health budget over last three years, the increase in allocation this year may not be enough to maintain existing health programmes. Union government spending on health is only 0.29% of GDP. The union and states’ health spending together is about 1.2% of GDP. The World Health Organisation recommends that governments spend between 2.5% to 5% of their GDP on health.
In addition, funds allocated in the budget were transferred to health ministry with considerable delays and with cuts and as a result little was spent on the ground. Only last month Health Minister Jagat Prakash Nadda expressed deep concern that his ministry has not been getting the money promised by the Finance Minister and as a result most central programmes were facing severe cash crunches. Although the health minister has expressed his gratitude to the finance minister after the budget, there is no reason to think that health programmes will suddenly be flush with funds. The government should have tried to make up for these cuts and delays and gone further to improve health overall health spending and not just in comparison to last year.
A large increase in allocation is long overdue just to maintain the momentum under National Rural Health Mission and to kick start the National Urban Health Mission that has not made much progress on the ground. The paltry increase in the budget this year is not adequate to even maintain current activities. In addition, several ambitious health programmes have been announced without any budgetary support.
One of big health promises from the budget was the intended conversion of 1.5 lakh sub-centres into health and wellness centres. If this is undertaken seriously, funded adequately and implemented appropriately to extend a comprehensive primary level care, a large number of vulnerable and poor people can benefit, especially in urban areas. Unfortunately there is no allocation specified in the budget for this programme.
Big bang health announcements often win the day and then disappear into oblivion for lack of funds. On August 15, 2012, Manmohan Singh who was then prime minister announced a scheme for free distribution of medicines but apart from paltry allocations and announcement to expand the Jan Aushadhi Scheme to set up generic stores in the last budget nothing concrete has been done so far. In his budget speech this year Finance Minister Arun Jaitley proposed to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines, while maintaining silence on the free medicines agenda. At a time when any attempt to regulate drug prices is being challenged vehemently by the pharmaceutical lobby and price control orders are being rampantly bypassed the efficacy of such price regulation is doubtful. It is essential that an alternative system of procurement, distribution and delivery of medicines, such as those in place in Tamil Nadu and Rajasthan, be scaled up for the entire country.
Similarly, in last year’s budget, Jaitley announced the launch of the National Health Protection Scheme, and improved version of the government’s flagship health insurance scheme Rashtriya Swasthya Bima Yojana. While coverage under RSBY was Rs 30,000 per annum, the NHPS offered coverage up to Rs 1lakh. Allocations under NHPS have been reduced from 1,500 crores last year to Rs 1,000 crores this year.
Some pre-existing schemes rebranded as “Human Resources for Health and Medical Education” have also been included to show an large increase in the mission’s budget. In reality, the budget for existing functions has increased only by Rs 2,500 crores, which is an increase of only 4% when adjusted for inflation.
The Finance Minister also reiterated Prime Minister Narendra Modi’s New Year promise to transfer Rs 6,000 directly to the bank accounts of pregnant women who undergo institutional deliveries and vaccinate their children. In fact, the National Food Security Act, which was passed in July 2013, promised universal maternity benefit of Rs 6,000 but has not been implemented yet. States like Odisha and Tamil Nadu that operationalised the scheme have been using their own resources.
Even if a quarter of all mothers delivering babies in a year get benefits under this scheme, around Rs 5,000 crores would be required per annum. If this amount is taken from the National Health Mission allocation of Rs 27,153 crores, it will further squeeze allocations for other existing programs.
Besides, global experience suggests that cash transfer schemes can work only if it is complemented with good quality public services. Notwithstanding its limitations, National Health Mission has helped in increasing institutional deliveries and saved thousands of mothers and children with a combination of improved quality of services and targeted cash transfer.
While quality of care in public facilities likely to be hit because of the National Health Mission’s cash crunch and further strain on the programme to provide incentives for pregnant women to have their babies in private facilities at greater financial cost to the patients and risks of unnecessary procedures. A normal delivery in a private hospital costs a minimum of Rs 15,000 to Rs 20,000. The issue of out-of-pocket expenditure is becoming a major concern for all kinds of healthcare, since financial incentives for medical care at private facilities are highly ineffective in providing financial protection.
All the revenue predictions in the budget are based on data from before November 2016 and do not take into account the impact demonetisation is going to have on the economy. In previous years, it has been hard enough for the finance ministry to honour its allocation commitments and send funds to the line ministries on time to finally reach intended beneficiaries. With the additional impact of demonetisation, there is little hope that these financial resources will be mobilised effectively.
The writer is a research scientist and assistant professor at the Public Health Foundation of India.