Budget 2018: India Needs Higher Health Allocation. Will It Happen?

Union Budget 2018: Will govt expenditure on healthcare come close to global standards of 6 percent of the GDP?

Presently the total expenditure on health is below 4 percent of the GDP.

(Photo: iStock)

As we approach the Union Budget, I have listed some expectations for the Union Budget 2018 with regards to healthcare.

Health and education must occupy centre space. The outlay for both these should go up significantly.

Presently, the total expenditure on health is below 4 percent of the GDP while the government expenditure is below 1.3 percent of GDP. The new National Health Policy (NHP) promises to increase this to 2.5 percent by 2025. On education again, the government expenditure is below 4 percent of GDP and must go up to 6.5 percent quickly.

In the last NHP (2002), the aim was to improve expenditure on health to 2 percent of the GDP without specifying a date. The financial requirements are actually much larger than what is targeted in the new policy; the government must spend about 3.8 percent of its GDP on health.

Pertinent Pre-Budget Questions

• Will the honourable finance minister allocate funds for Health Special Economic Zones which he has been talking about?
• Will he deliver on the “Health Assurance for All” which featured in the manifesto in 2014?
• Union Budget 2017 talked of renaming Primary Health Care centres as “health and wellness centres,” which will cater to non-communicable diseases, mental health challenges, geriatric and palliative care, and rehabilitative care services. What are the allocations one may expect towards these concerns now?
• The new National Health Policy, which was announced in 2017, came after 15 whole years. Can one expect the FM to talk about its progress or plans for implementation during the Budget speech? Will he be able to allocate additional funds for most goals that the policy ambitiously targets?

Today, the government spends 1.3 percent of GDP on health, though some estimates put it at 2 percent. The new policy wants to improve this to 2.5 percent of GDP by 2025 while the global average is 6 percent. Will we see any indication towards reaching this global target in the Union Budget 2018?

Proposed Goals

India’s Infant Mortality Rate, i.e. the number of deaths of infants under one year old who die per 1000 live births (in a year), is now at 34. (Photo: Reuters)

As per the Sample Registration System (SRS) Statstical Report 2016, India’s Infant Mortality Rate, i.e. the number of deaths of infants under one year old who die per 1000 live births (in a year), is now at 34. The Ministry of Health and Family Welfare, Government of India, aims to bring this down to 28, by 2019. Although there has been progress, without sizeable allocations towards vaccination and nutrition, this will not be possible.

The SRS report also mentions India’s under-five mortality rate (probability of dying between birth and exactly 5 years of age, expressed per 1,000 live births) has come down to 39. To reach the goal of reducing this to 23, what improved allocations can we expect to see? Also, what will be the allocations specifically towards the health and development of the girl child?

India’s maternal mortality rate is 174 per 1,000 live births (as per World Bank data), indicating the large number of women dying in this country during childbirth. While the objective is to bring this number down to 100 by 2020, these goals still seem unacceptably high. Will we see improvements in allocations towards the Ministry of Women and Child Development?

Some Reflections in Anticipation

The only aspect on which the country seems to be doing well is on fertility rates. The number of children per young woman, is already down to 2.3.(Photo: iStock)

• India’s abject failure in improving health allocations and expenditure and in providing essential public services has depressed living standards, and continues to be a persistent drag on growth.
• On most indicators, India performs worse than many of its South Asian neighbours and sometimes even worse than Sub Saharan Africa – annually more than 3.5 lakh children in India die from infectious diseases like pneumonia, tetanus, and diarrhoea each year; more than 4 lakh people die of tuberculosis, while diseases like diarrhea and malaria continue to be huge public health challenges across the country. Will we see some discussion on these in the Budget?

The Union government has announced some more targets in the health sector – for example, life expectancy in India is at 68.35 years now. The new policy aims at improving this to 70. Even this target keeps us below countries like Sri Lanka which is already at 75.

• The fact that close to 50 percent Indians defecate in the open, more than 50 percent children are malnourished and only 62 percent are immunised makes for poor comparison even with much poorer countries like Bangladesh and Nepal. China has done much more by way of interventions in health and is way ahead on all such counts. With less than 19 doctors and nurses for 10,000 people, India is in a crisis situation as per WHO standards.

The only aspect on which the country seems to be doing well is on fertility rates. The new policy notes that fertility rates, or the number of children per young woman, is already down to 2.3. And the policy aims at reaching 2.1 by 2025. In fact, if present trends continue we should reach this figure by 2021 itself.

• The policy states that the government will eliminate leprosy, kala azar, elephantiasis and TB over the next 8 years. Where are the funds?
• The Public Health Foundation of India has pointed to the fact that in primary healthcare around rural India there is no qualified doctor in most cases and the centres are run by paramedics and unqualified doctors trained in traditional forms of medicine. The new Medical Commission has been tasked with improving these numbers. However this too will need improved allocations of funds to set up new institutions.
• There is already growing pressure from international investors, pharma companies, and domestic players that the government withdraw the price controls and drug price lists that they claim have reduced investment in the healthcare and pharma sector. Will the FM buckle under this pressure?

(The author is a Health Economist and Professor at Maulana Azad National Urdu University, Hyderabad. The views expressed in this article are his own)