ADEQUATE FUNDING CONCERNS FOR PUBLIC HEALTH PLAGUE UNION BUDGET 2024-25

Given the huge shortage of healthcare professionals and hospital beds, lack of pre and post hospitalization medical facilities at affordable costs, inadequate funding, and non-release of promised budgeted funds even
under the much-publicized government medical and health insurance schemes have emerged as serious concerns for the Union Ministry of Finance plaguing the preparation of Union Budget 2024-25.

Union Minister of Finance Nirmala Sitharaman’s pre-budget consultation with healthcare industry, professionals, and experts on June 27, had already highlighted such predicaments of the people. The top issue emerged was the inadequate public funding which is at present only about 1.2 per cent of the GDP of the country, as per the latest Lancet report. Participants demanded it to be raised at least to 3 per cent in the Union Budget 2024-25, so that some of the urgent health funding requirements could be met.

The Ministry for Finance is presently struggling to meet the expectation of the people now, since funding pattern in the Union Budget 2024-25 to be tabled on July 23 could not be possible far away from the provisions made in the Interim Budget 2024-25 tabled in the parliament on February 1, 2024, just one month before the Lok Sabha Election was announced. In the Interim Budget 2024-25, the total allocation for health was only Rs 90,171 crore making an increase from the previous year’s allocation of Rs 79,221 crore. It may seem a considerable increase, but it is much less than the requirement. As per the National Health Policy
2017, almost three years before the COVID-19 pandemic of 2020, public investment in health was
envisioned to reach 2.5 per cent of the GDP by 2025.

Though, COVID-19 crisis has necessitated much more investment, around 9 per cent of the GDP according to some international estimates, India’s spending only 1.2 per cent on health is totally unacceptable. Modi government has obviously failed even in achieving the target of 2.5 per cent as per its own National Health
Policy of 2017.

If we calculate the amount at 2.5 per cent on the projected GDP in the Interim Budget 2024-25, the national expenditure should have been Rs 819,000 crore in which Union Government’s contribution should have been Rs 327,718 crore calculated at 40 per cent. However, Interim Budget allocated only Rs 90,171 crore. It should be noted that the Health is in concurrent list of the Constitution of India, and 60 per cent of the public health expenditure is borne by the State governments.

The Lancet report has recently asserted that Indian government spends just 1.2 per cent of GDP on healthcare which is among the lowest among G20 countries, however, Modi government has criticized this observation claiming that health spending is at an all-time high and out-of-pocket expenditure as a per cent of the total health expenditure has decreased in Modi regime. Such claim was made in April during Lok Sabha election, when PM Modi was expecting 370 seats for the BJP. Now the political reality has changed and he is compelled to lead a coalition government with BJP’s 240 seats only.

It should also be noted that government health expenditure as per cent of GDP was 1.13 per cent in 2014-15, and 1.35 per cent in 2019-20. Estimated expenditure for the year 2023-24 was Rs 86,175 crore and therefore allocation of Rs 90,171 crore in the Interim Budget 2024-24 is a very small increase, which must be significantly increased in the full budget now. Now is the time not to criticize the critic of the government, but to take note of the issues being raised, and address them in the Union Budget 2024-25. Lancet in its report has mentioned about the failure of flagship initiatives on primary healthcare and universal health
coverage to deliver services to the people most in need.

One of the examples of the failure of the Modi government was even narrated by the Association of
Healthcare Providers of India DG during the pre-budget consultation. He said, “Prime Minister wanted
3,000 hospitals in the tier 3 towns with 100 beds which has not happened. So, we want government
should incentivize private sector in terms of cheaper electricity, cheaper land, affordable loan, and single window clearances so that these hospitals can be set up.”

Ayushman Bharat is a flagship programme of the Modi government, but it is now a wellknown fact that it suffered due to very big corruptions, apart from insufficient fund allocation and pull back of the private hospitals from it due to delay in receiving reimbursement, which has impacted the cash flow of private hospitals and created serious operational issues. The scheme was launched in 2018, and was jointly funded by the Centre and states in the 60:40 ratio.

Interim budget has allocated only Rs7,500 crore as against Rs 7,200 crore allotted last year, which in revised estimate reduced to Rs 6,800 crore. It clearly meant that the scheme is not performing well. This scheme aims to benefit 12 crore families with Rs 5 lakh per family per year, and hence funding is inadequate. It was only in May, serious concerns were voiced over inadequate release of funds by states, which are already fund starved and they have pending issues with sharing on revenue with the Centre, especially the opposition ruled states.

Moreover, there is lack of beds in India. We have less than 2 hospital beds per 1000 people as against WHO standard of 3.5 beds. Moreover, there is great disparity in states, and urban and rural areas. For example, Karnataka has 4 beds per 1000 people while Bihar has only 0.3 per cent. Then concentration of healthcare
facilities is in the cities. It goes without saying that benefit of Ayushman can’t be accessed by majority of the people. Pre-hospitalization needs are unmet for the majority of the people in India, which needs urgent increased funding to make Health for all possible. Union Budget 2024-25 must provide for adequate funding and make free healthcare a fundamental right.