Home / Budget 2019 / News /  Budget 2020: Ayushman Bharat insurance plan outlay unchanged

New Delhi: The Union Budget for 2020-21, presented on Saturday, kept unchanged the outlay for the government's flagship health insurance scheme, Pradhan Mantri Jan Arogya Yojana (PMJAY) under Ayushman Bharat at 6,400 crore.

The government is expected to utilize only half of its initial allocation in the current financial year. The revised Budget estimate for Ayushman Bharat-PMJAY for this year has been slashed to 3,200 crore from the initial estimate of 6,400 crore.

Of the total allocation for the next fiscal, 6,200 crore will come from the National Investment Fund (NIF) and not in the form of gross budgetary support.

The government had constituted the NIF in 2005 to channelize proceeds from disinvestment of Central Public Sector Enterprises.

While the funds are supposed to be primarily used for investment in other state-owned companies, certain infrastructure projects and recapitalization of public sector banks and public sector insurance companies, the United Progressive Alliance government between 2008 and 2013 used it for social sector schemes, as per information on the Department of Investment and Public Asset Management website for NIF.

The under-utilization of funds allocated for PMJAY once again signals the lack of secondary and tertiary hospitals in smaller cities.

The PMJAY, launched in September 2018, aims to provide health insurance for secondary and tertiary hospitalization to over 100 million poor and vulnerable families, which would total around 500 million beneficiaries.

However, since its introduction, only 8.1 million hospitalizations have taken place using the scheme, primarily attributed to lack of hospitals.

In her Budget speech, finance minister Nirmala Sitharaman today also announced the use of proceeds from taxes on medical devices to fund health infrastructure in 112 aspirational districts.

The Cabinet Secretary in November wrote to secretaries of all ministries, chief secretaries of all states and Railway Board chairman Vinod Kumar Yadav, asking them to sign up hospitals operated by state-run companies and Indian Railways.

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