If there is one learning from the current coronavirus crisis, it is that a country must budget sufficiently for healthcare and create the necessary infrastructure to provide timely medical care. In this context, it is welcome that the government is considering a 50% increase in the upcoming Union Budget outlay from the Rs 67,111 crore in the previous Budget.
Considering the massive spending envisaged on vaccine production and distribution, the budgetary increase may be a drop in the ocean. However, the government expects to pump in higher amounts into health via the Rs 111-trillion five-year investment plan to develop the country’s medical infrastructure. The Centre and states together are spending just about 1.28% of the GDP on health and related infrastructure—around Rs 2.6 lakh crore. This is woefully inadequate.
India’s spending on healthcare is among the lowest in the world. Compared to our spend of 3.6% of the GDP (government + individual), the US spends 16.9%, France 11.2% and Japan 10.9%. Even among the BRICS nations, India is at the bottom, with Brazil spending 9.2% and China 5%. In our case, poor public health infrastructure forces people to spend personally from their overstretched budget on medical expenses, compelling them to cut the amount allocated for food and other essentials.
The 15th Finance Commission has recommended that the combined outlay by the Centre and states be hiked to 2.5% of the GDP from the current 1.28%. Investment in this sector has been going up and the expenditure per capita has increased from Rs 1,008 in FY 2015 to Rs 1,944 in FY 2020. Yet, this is not enough as much of the increase has gone into paying higher salaries for medical workers.
The future challenge is going to be financing an expensive purchase and distribution programme for the Covid vaccines. Second, the public availability of ICU beds and hospital infrastructure will have to be boosted as currently 80% of the ventilators and ICU beds are under the purview of private, expensive hospitals. There is progress, but more than anything else, it is the poor and inaccessible public healthcare system that needs maximum attention.