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Home >Budget 2019 >News >Govt spending on health infra likely to see a boost in budget

The long-term trend of low government spending on healthcare may begin a reversal in the Union budget as the nation struggles to overcome the covid-19 pandemic that has claimed over 150,000 lives and infected over 10 million.

According to the officials in health ministry, the budget may focus on public private partnerships (PPPs), further tweaking viability gap funding (VGF) options to attract private sector investors in tier 2 and 3 cities and invest more in healthcare to strengthen indigenous manufacturing of medical devices, personal protective equipment (PPE), and drugs raw material.

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The total budget allocated to the ministry of health and family welfare for 2019-20 was 61,398.12 crore against 52,800 crore in 2018-19.

“It is crucial to save the private health sector from collapse and improve government health sector infrastructure in tier-2 and tier-3 cities. This has to be supplemented with improving WASH (water, sanitation and hygiene) infrastructure and creating a robust workforce of healthcare providers to take care of the homeless and residents of unauthorized slums," said Professor Nirmal K. Ganguly, president, Jawaharlal Institute of Post Graduate Medical Education and Research in India and former director general of the Indian Council of Medical Research. “Greater investment is also needed for preparedness against other health emergencies that may arise in the future, by strengthening diagnostic testing capacities and contact tracing mechanisms," he added.

The health crisis has not only put immense pressure on the crumbling public healthcare systems, limited diagnostic capacities and constrained manpower, it has also made the government realise the value of PPPs and local manufacturers.

The private healthcare sector has suffered major losses along with all other sectors. NATHEALTH-healthcare federation of India, an industry body, has submitted a comprehensive set of recommendations to the government for the budget, with the prime objective to provide economic and structural measures to fast track recovery of the private healthcare sector.

“There is an immediate need to provide solutions to short-term problems caused due to covid-19 and, alongside, address the long-standing gaps in our healthcare system," said Preetha Reddy, President, NATHEALTH and vice chairperson, Apollo Hospitals. “The objective of these recommendations is to ensure recovery and sustenance of healthcare providers (small, medium, and large) and to drive policy consensus. The path to achieve a holistic goal of universal healthcare, hinges on collaboration where all stakeholders can work in tandem to bridge the vital gaps in service delivery," she added.

Health has always received minimal funding year on year. However, Prime Minister Narendra Modi has promised to increase health spending to 2.5% of gross domestic product (GDP) by 2025 from the existing 1.15%.

In May, Union finance minister Nirmala Sitharaman had announced an enhanced viability gap support of 30% for building hospitals in tier-2 and tier-3 cities, up from 20%.

“Cities and towns other than the million-plus ones require heavy investment in the health sector. The pandemic has cautioned the policymakers that the health sector will have to receive greater attention, else poor infrastructure and poor health outcome can reduce growth and well-being drastically. The growth indicators are hugely dependent on health, a fact which often gets neglected," said Arup Mitra, professor of economics at the Institute of Economic Growth, University of Delhi.

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