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Finance minister Nirmala Sitharaman is expected to focus on the underfunded healthcare sector when she unveils the Union budget for fiscal 2021-22 in the shadow of the coronavirus pandemic.

The pandemic global health crisis has transformed into an economic and social contingency, stretching India’s healthcare systems beyond its limits. A stressed healthcare infrastructure, limited diagnostic capacity and constrained manpower made it all the more difficult to deal with the pandemic. The highly infectious disease seems to be now receding in the country, with fewer cases being recorded each day. It has, however, left the government pondering that the sector needs a major boost to stay prepared for such pandemics.

“This year’s budget is going to be special as it will test the government’s fiscal prudence towards key sectors like health, in times when the economy is struggling to come out of the pandemic. Even in the best of times, the country’s healthcare expenditure towards healthcare has been dismal and expecting the government to apply a magic wand in distress is asking for too much. This coupled with additional spending required for covid vaccination will leave little freedom for the government to spend towards long-term healthcare improvements," said Himanshu Sikka, lead—health, nutrition and, water, sanitation and hygiene (WASH) at IPE Global, an international development consultancy. Prime Minister Narendra Modi had earlier said that the government will boost healthcare spending to 2.5% of GDP by 2025 from the existing 1.15%, but the sector has continued to receive minimal funding so far. The sector received 69,000 crore in this fiscal year’s budget up from 62,659 crore in 2019-20.

Healthcare and economy experts believe the budget may focus on public-private partnerships (PPP) and local firms, further tweaking of viability gap funding options to attract private investors. It may also contain investments in health to boost indigenous manufacturing of medical devices and PPEs, as well as raw materials for drugs.

“India should step up public investment on health comparable to nations with similar per capita GDP. Further, private sector participation in manufacturing of medical equipment, drugs research may be encouraged through... direct budgetary support," said Dr Sarit Rout, additional professor, Indian Institute of Public Health, Bhubaneshwar.

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