Budget brings no relief to health sector

FM does not mention Universal Health Coverage, combines rural and urban health missions while making allocations

By Kundan Pandey, Jyotsna Singh
Published: Thursday 28 February 2013

Finance Minister P Chidambaram’s presentation of the budget has left many in the health sector disappointed. The Union Ministry of Health and Family Welfare has been allotted Rs 37,330 crore. Of this, Rs 21,239 crore has been allocated to the National Health Mission (NHM). However, the government has merged the National Rural Health Mission (NRHM) and the National Urban Health Mission (NUHM) while making allocation. Last year, Rs 20,822 crore was allocated to NRHM alone.

Narendra Gupta of Prayas, a Delhi-based non-profit, says, “The budget contradicts the prime minister’s August-15 speech in which he claimed the government is committed to provide health security to all the citizens. The allocation is nothing especially because inflation in the last year has been steep.” Last year, around Rs 30,000 crore was allocated to the health ministry. Addition of around Rs 7,000 crore will not bring any relief to ailing health sector, he says.

Expectations regarding the Universal Health Coverage (UHC) took a hit when the finance minister did not mention it in his speech. It was estimated that Rs 300,000 crores will have to be spent in five years to give shape to UHC, which was recommended by the Planning Commission. “However, in the last two years, only Rs 67,000 crore has been spent. The budget is a disappointment. There is no push for improving healthcare,” Shaktivel Selvaraj, health economist, Public Health Foundation of India, says. He said an increase of 21 per cent in allocation to the health ministry is modest, but not sufficient for a robust health sector.

“Over the last six months, there has been a lot of hype about the 12th Five Year Plan and UHC. But in the budget expenditure, even provision of free medicines does not show up. The entire policy debate has been ignored in the budget,” says Ravi Duggal, senior analyst, International Budget Partnership. According to him, this is reflective of push towards privatisation. “There is no correlation between the promises for the 12th plan and the budget,” he adds.

Duggal expressed concern about clubbing of various national flagship programmes under one head. “Till now we had separate allocations for programmes on tuberculosis and immunisation. So we could judge the outcome against the allocation. This time all have been put under categories of communicable and non-communicable diseases. The states will be free to spend the money according to their choice. Thus, even if there is a situation where tuberculosis is a bigger problem, the fund might be spent elsewhere,” he says.

However, experts have welcomed extending Rashtriya Swasthya Bima Yojana to tertiary care.

Insignificant increase in expenditure

Over the years, the country’s public sector contribution to health has been steadily decreasing compared to the private sector. Public sector contribution refers to government’s expenditure on health while private sector expenditure means out of pocket money of the public. The economic survey presented in Parliament on Wednesday made it clear that India’s public sector has contributed 1.2 per cent compared to 2.9 per cent of the private sector in total 4.1 per cent of GDP expenditure on health in 2012-13. In 2009, the public sector expenditure on health was 1.4 per cent compared to private sector contribution of 2.8 per cent. This means public sector expenditure on health was around 50 per cent of private sector’s expenditure in 2009, and it decreased further to 41.4 per cent of the private sector expenditure this year. Government has sourced the data from the Factbook of Organisation for Economic Co-operation and Development.

The economic survey makes it clear that there has been no significant increase on health expenditure. The government spent 1.27 per cent of GDP in 2007-08 and 1.36 per cent of the GDP in 2012-13 (see table).


Year 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Expenditure on health (per cent of GDP) 1.27 1.32 1.36 1.29 1.29 1.36


Similarly, governmentÔÇÖs expenditure on health as percentage of social service expenditure has also decreased over the years. It spent 21.5 per cent in 2007-08 and 19.2 per cent in 2012-13 (see table).


Year 2007-08 2008-09 2009-10 2011-11 2011-12 2012-13
Expenditure (per cent of social services expenditure) 21.5 19.5 19.7 19.0 18.7 19.2


What major economies spend
Countries Expenditure on health (per cent of GDP)  
  Public Private Total
Australia 6.2 2.9 9.1
Norway 8.1 1.4 9.4
United Kingdom 8.0 1.6 9.6
United States 8.5 9.1 17.6
Mexico 2.9 3.3 6.2
Indonesia 1.3 1.3 2.6
Brazil 4.2 4.8 9.0
Russian Federation 3.2 1.9 5.1
India 1.2 2.9 4.1
China 2.7 2.4 5.1
South Africa 3.9 5.0 8.9


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