Are we budgeting for a safe and healthy India? Uncertainty surrounding the new grants is disheartening

The allocation of Rs 1,06,606 crore by the 15th Finance Commission for strengthening the public health infrastructure, accounting for 0.1% of GDP, was unexpected as hitherto, FCs were reluctant to earmark grants as the determination of spending preferences was considered the prerogative of elected governments. States’ revenue spending continues to hover around 5% while overall health spending for India in 2018-19 was a measly 0.96% of GDP.

Like never before, the FC established a Working Group for Health with representation of corporate hospitals that led most to believe there was a greater thrust towards privatisation. But Covid seems to have impacted thinking towards strengthening public health. The grant was provided in two categories: Rs 70,051 crore to be spent by local bodies for gap filling in primary healthcare infrastructure – diagnostics and buildings, effectively scaling up the Kerala model.

Due to variances in the capacities of the local bodies across states, implementation could be challenging. However, Rs 5.6 lakh per panchayat per year for five years can incentivise states to innovate, reconfigure the design and re-engineer a more accountable system based on local participation and decentralisation of responsibilities.

The second category is Rs 31,755 crore for strengthening rapid responses to epidemics – laboratories in 469 districts; skill training of medical and non-medical personnel in district hospitals; and construction of critical care hospitals in 362 districts. Government has only agreed to the recommendation related to local bodies.

For a better understanding of health spending in actual terms, the FC and the Budget pronouncements need to be read together. As a starter the Budget itself provided for Rs 78,866 crore – a 7.6% increase to the revised estimates of the previous year, after discounting Rs 14,217 crore spent in the last quarter for Covid related expenses like ramping up beds, procuring PPEs, masks, ventilators etc.

To the regular health budget, three new items have been added – Rs 13,192 crore as first tranche of the FC grant for local bodies; Rs 35,000 crore for the Covid vaccine; and Rs 64,180 crore, spread over six years, under a new initiative – the PM Atmanirbhar Swasthya Bharat Yojana. The PMASBY is expected to undertake strengthening 29,000 primary healthcare facilities, establish integrated laboratories in districts and blocks, nine biosafety laboratories, four Regional Institutes of Virology, and strengthen the surveillance systems and the National Centre for Disease Control etc.

While the first two grants are administered by the finance ministry, there is no clarity on the PMASBY grant as it does not find mention in the Budget – whether it will be an additionality or be subsumed in the existing NHM budget.

Considering the severe economic downturn due to Covid, it is gratifying that the health budget has not been slashed as in the case of nutrition, education and rural employment. However, given that this was a once in 100 years moment, expectations were of a fundamentally transformative response. It was therefore the moment when government should have boldly opted for massive capital spending to build the battered health infrastructure and strengthen public health capacities at all levels of care.

Besides, uncertainties surround the new grants. While we have only an announcement of the FM regarding the PMASBY, the FC grant for strengthening primary care through local bodies is conditional on the states establishing the State Finance Commission, revising property taxes etc. Such an attempt of releasing conditional grants for local bodies by earlier Commissions failed as devolution of functions, funds and functionaries as required under the 73rd and 74th Amendments is considered to be a politically risky reform that most states are reluctant to undertake.

Regarding the allocation for vaccine, since the spending is by the finance ministry not health, it will be for actuals, with no scope for utilising savings, if any, for health infrastructure strengthening. After all the sordid drama, the story seems to have the same ending. How many more Covid like pandemics does India need to face to make health a central concern is a question on everyone’s mind.



Views expressed above are the author’s own.


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