In this year’s interim budget, the Modi government has increased overall allocation to the Ministry of Health and Family Welfare by Rs 7,589 crore or 13% over last year. But more than half of this increase will go towards the flagship health insurance programme, the Pradhan Mantri Jan Aarogya Yojana, which is part of Ayushman Bharat.

The PMJAY has been allocated Rs 6,400 crore which is 2.5 times the budget of Rs 2,400 last year. In contrast, the government has only slightly increased the allocation to the National Health Mission that administers all other core programmes including maternal and child health, immunisation and control of communicable and non-communicable diseases.

On Wednesday, two days before the interim budget, The Hindu Businessline reported a conflict between the National Health Authority that administers the Pradhan Mantri Jan Aarogya Yojana and the National Health Mission that administers other core health programmes of the government. According to the report that cites senior health ministry officials, the National Health Authority had asked the finance ministry for Rs 7,400 but was allocated Rs 800 crore less after the health ministry said that the PMJAY budget was cutting into expenditure on other health programmes.

At the same time, the health ministry had asked for Rs 35,000 crore for National Health Mission but got just an allocation of Rs 31,745 cr. While this is an increase of 3% from last year, most of it will go towards compensating the decrease of allocation by 2% last year as compared to 2017-’18.

Figure for 2018-'19 is the Revised Estimate and for 2019-'20 is Budget Estimate.

Fighting over a small piece

Ever since the announcement of the mega health insurance scheme in the 2018 budget, public health experts have warned that large spending on the ambitious scheme will draw funds away from existing public health programmes and primary healthcare infrastructure. This seems to be playing out in the tussle for funds between the National Health Authority and the National Health Mission.

In March 2018, the cabinet had approved Rs 10,000 crore over two years for PMJAY, which is to come from the 1% health cess announced in the 2018 budget and not from the allocation to the Ministry of Health and Family Welfare.

While government estimates project an annual requirement of Rs 10,000 crore to Rs 12,000 crore to fully fund the health insurance scheme, economists have pointed out that this is too little for the scale of the programme. Jean Drèze has estimated that if beneficiary families spend just 1% of the Rs 5 lakh quota, the programme will have to pay out Rs 50,000 crore in reimbursements.

The National Health Mission is also responsible for the second part of Ayushman Bharat – setting up 1,50,000 health and wellness centres as well as all other primary and secondary healthcare infrastructure. The government has allocated Rs 1,600 crore to build these centres in urban and rural areas. This allocation is included in the amount for the National Health Mission.

Allocation to health insurance schemes


Rs cr





2018-19 (BE)


2018-19 (RE)


2019-20 (BE)

Source: Union Budget, BE stands for Budget Estimates, RE for Revised Estimates

The Ministry of Health and Family Welfare has two departments – the Department of Health and Family Welfare which runs the key schemes, and the Department of Health Research. The National Health Authority that has been approved is intended to be an autonomous body with the “accountability, authority and mandate” to run the PMJAY.

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