Budget 2015-16 and the Health Sector – Continued Neglect

The Finance Minister Mr. Arun Jaitely makes a statement in his opening remarks about

health, “Good health is a necessity for both quality of life, and a person’s productivity and

ability to support his or her family.  Providing medical services in each village and city is

absolutely essential.”

This generic statement in good faith does not get reflected in budgetary commitments. Please note he says “providing medical services in each village and city” and does not say by whom.

The budget overall is very disappointing - it is a budget for Adanis and Ambanis. The corporate tax reduction to a rate of 25% is nearly 17% less burden on Corporates. So corporate hospitals, pharma and medical devices industry, apart from the general corporate world will benefit in a huge way.

Hike in service tax through a cess to fund Swacha Bharat is not a good move as it will hike up patient bills and increase further out of pocket expenditure burdens.

The increased rebate on health insurance premiums from Rs 15000 to 25000 must be creating euphoria in the insurance industry but it is bad for the health of the aam aadmi. This is a clear message from Modi Sarkar that arrange for your own healthcare through purchase of insurance - healthcare is your personal responsibility so we are reducing the budget allocations from Rs 39231 crores budgeted in 2014-15 to Rs. 33260  crores for 2015-16, a slashing of over 15%. This too will contribute to further increase in out of pocket spending. Further if we look at the flagship NHM program the cut in spending is even worse from Rs. 24491 crore in 2014-15 down to Rs. 18295 crore, a whopping decline of over 25%.

Further in the budget speech Jaitley is suggesting an option for ESIS covered workers to opt out and seek cover with health insurance. This will kill the ESIS and social security of workers. He should have instead asked ESIS to cover all organized sector employees by removing the income ceiling for ESIS membership so that not only the working class is covered but also the white collar and executive class. This would be a tremendous boost for not only workers health but also health for the general population as huge resources can be generated with such a move.

While more AIIMS type hospitals in different states is welcome the allocations for it are meagre. The Delhi AIIMS has a budgetary provision of Rs. 1470 crores and for the other AIIMS as of now about 10 the budget is a mere Rs. 1756 crores. That apart getting appropriate faculty and other staff remains a huge challenge for the AIIMS in other states which have already started operations.

The pharmaceuticals department has made a provision for the Jan Aushadi scheme to the tune of Rs. 35 crores up from Rs. 30 crores last year. However in the health budget there is no provision of the much talked about free medicines and diagnostics scheme for public healyth facilities.

One disturbing feature in the health budget is the allocation for CGHS. Why should the general health budget support what is essentially a social security package for its employees. So the real health budget should actually be reduced by the Rs. 915 crores for CGHS dispensaries and further Rs. 2249 crores for medical treatment of pensioners covered by CGHS. If we reduce this total of Rs 3164 then the net health budget is even lower at Rs. 30096 crores. This works out to a Central government allocation of a mere Rs. 240 per capita.

To conclude, the trajectory of public healthcare spending is quite dismal. The neglect of public healthcare continues. Infact the much touted NHM allocations for 2015-16 are even less than the actual expenditure two years ago as is the allocations for AIDS control. So certainly no aache din for peoples healthcare is on the horizon.

Table: Central Government Health Sector Allocations – Rs. crores

	2013-14 A/C	2014-15 BE	2015-16 BE
Health and Family Welfare	27145.29	35163	29653
of which Medical Institutions	2020.55	2004.7	2248
Medical Education and Training	4798.73	5110.8	5569.24
Public Health Programs	960.49	1929.94	1767.15
NHM	18633.81	24490.88	18295
AYUSH	642.41	1272.15	1214
Health Research	874.08	1017.67	1018.17
AIDS control	1473.15	1785	1397
Total Health Sector	30134.93	39231.01	33260.6