Healthcare Budget may face 16-17 percent Cut

The healthcare budget may face a cut of 16-17 percent in the revised estimates for the financial year ending March 31, government officials indicated on Tuesday. The public spending on health in India is already one of the lowest globally.


“The final revised estimates for healthcare are yet to be determined but we are expecting a 16 to 17 percent reduction, based on our meetings with finance ministry officials in last few weeks,” confirmed a health ministry official. The plan outlay for 2014-15 for health and family welfare stood at Rs 30,645 crore. Even under the previous UPA regime, public spending on health had faced similar cuts year after year.
For instance, in 2013-14, budgetary allocations for healthcare stood at Rs 29,164 crore. This was cut by about Rs 6000 crore in the revised estimates of 2013-14. But expectations from the Narendra Modi-led government to deliver on country’s creaking public healthcare infrastructure were high. The BJP manifesto promises to upgrade basic health infrastructure and make medical services more affordable for the poor.

“We were not expecting budget cuts this time looking at the commitments BJP made in the manifesto on healthcare,” said a health ministry official. India spends a little over 1 % of its gross domestic product on public health, much lower than countries like China and US, where governments invest over 3% and 8% on health, respectively. The ministry has been preparing ground for an ambitious universal healthcare programme that Modi plans to launch next year. This program aims at providing all citizens with select free drugs and diagnosis, along with insurance benefits.

“Over next few months, it will become clear whether we are going ahead with the larger plan of rolling out universal healthcare plans,” the health ministry official said. Earlier the Manmohan Singh-led UPA government had made similar plans of offering free drugs from public hospitals but had shelved it under fiscal strains.


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