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India slashes health budget, as NDA government aims at ‘Health for All’

Stéthoscope et euros

New Delhi (March 01) – The budget presented before Indian parliament by federal Finance Minister Arun Jaitley for the fiscal 2015-14 was disappointing for the healthcare sector in as much as,  “Health for All”, a key initiative of the government headed by Mr. Narendra Modi would face resource crunch.  The financial allocation for health and allied services is Rs. 331. 52 million down by by 5.7 per cent from Rs. 351.63 billion, due to ‘reduced financial space for the Centre’.The lower allocation comes just on the heels of a cut of nearly 20 per cent of the approved budget estimates for the current fiscal 2014-15.
Lower allocation for his ministry notwithstanding, India’s federal health minister Jagat Prakash Nadda feels, it shows ‘the resolve to support the health sector in a big way….by the outlay for health’.
On the other hand, the finance minister introduced certain concessions for health insurance, in the form of tax relief on health insurance premium. But this might not provide succour to 39 million Indians, who are pushed to poverty due to ill-health every year and do not earn to be in the tax payers’ bracket to take the benefit. Worse, according to a report of WHO, around 30 per cent in rural India do not go for any treatment due to financial constraints, as per a WHO report.
The allocation is an indication of the government rejigging its role in social sectors and facilitate a higher role for private investment. As it exists today, private sector funding of India’s annual health burden of 19.22 billion US dollars is about 77.62%, amongst the highest in the world in percentage terms. Public spending on the other hand, is amongst the lowest and is even lower than the global average.
Several health security schemes for the economically and socially backward sections of the society, who could not afford costly services from the private sector, could take a hit due to lower allocations.
The budget however earmarked a major share to AYUSH – Ayurveda, Yoga, Unani, Siddha and Homeopathy, as it wants to promote alternative systems of medicines in an organised and scientific manner.
Indian healthcare sector faces significant challenges both in terms of accessibility of service and quality of patient care.
– Penetration of healthcare infrastructure is much lower than that of developed countries and even lower than the global average. The bed density in the country is 0.51 per 1,000 population, according to National Health Profile 2013, far below the global average of 2.6 and WHO benchmark of 3.5. Furthermore, existing healthcare infrastructure is unplanned and is irregularly distributed.
– Urban India is now on the threshold of becoming the disease capital of the world facing increased incidence of lifestyle-related diseases like cardiovascular diseases, diabetes, cancer, COPD (Chronic Obstructive Pulmonary disease), etc.
– Both urban poor and rural India are struggling with communicable diseases such as tuberculosis, typhoid, dysentery etc. Rural India is also seeing higher occurrences of non-communicable life-style related diseases.
– Lack of manpower – the doctor population ratio is below WHO prescribed guidelines of 2.5 doctors for a population of 1,000 – India’s doctor-population ratio in 2013 was 0.74 doctors for 1,000.
Additionally, the present thinking in the government is contrary to its own avowed public promises of ‘Health for All’.
A 2012 study by Indian business lobby Federation of Indian Chambers of Commerce and Industry and consultants Ernest & Young estimated that universal health cover in India is feasible in a decade and would require government health spending to rise to 3.7-4.5 percent of GDP.

Arun Jaitley kept a tight leash on his healthcare pie, even as he listed good health as a ‘necessity for both quality of life, and a person’s productivity and ability to support his or her family’. He now wants the states to chip in ‘to utilise their enhanced resources effectively in these areas’, as the federal government will support ‘programmes targeted for the poor and the under-privileged’.

Instead of subsidising healthcare from public funds, the budget had a few mechanisms like healthcare insurance. This include – tax exemption on health insurance premium increased from Rs. 15,000 to 25,000 (for senior citizen from Rs. 20,000 to 30,000), increase in limit of deduction in case of very senior citizens (80 years of age or more), service tax exemption for ‘Varishta Bima Yojana’, deduction of Rs. 30,000 towards expenditure incurred on treatment of very senior citizens not covered by health insurance.

Besides, the budget has also announced setting up five premier medical facilities – All India Institute of Medical Sciences in Jammu and Kashmir, Himachal Pradesh, Punjab, Assam and Tamil Nadu and an AIIMS-like institution in Bihar to provide a quantum jump in healthcare in these states and neighbouring areas. With this, the number of such super speciality institutions has gone up to 14 in the country.

The tight rein on healthcare by successive governments, despite their public stance, could push the poor to further down, or at best be at the mercy of unscrupulous insurance companies. At present, government spending on public health is only about 1 per cent of its gross domestic product (GDP), compared to 3 per cent in China and 8.3 percent in the United States.

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