Budget-2024 glosses over healthcare; allocation up by mere 0.15%
Total expenditure of ₹89,287 crore on healthcare is ₹1,371.63 crore or 1.54% less than that made in the interim budget in February
The Union Budget, envisioned as a roadmap to ‘Viksit Bharat’, which focuses on four ‘castes’—youth, women, the poor, and farmers—appears to have skipped the key sector of health. The budget themes, such as employment, skilling, MSMEs, and the middle class, also make no reference to the sector of health.
Health is also missing from the nine priority areas envisioned in the budget, which are focused on generating ample opportunities for all. The priority areas are productivity and resilience in agriculture, employment and skilling, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation, research and development, and next generation reforms.
PLI scheme for pharma sector
The only notable references to health in Finance Minister Nirmala Sitharaman’s budget speech were confined to the full exemption of three more cancer medicines from customs duties and the allocation of a medical college to Bihar. Besides the budget proposes changes in Basic Customs Duty (BCD) on x-ray tubes and flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.
Apart from these, the production-linked incentive scheme for the pharmaceutical industry has been increased from ₹1,200 crore of the budget estimate of 2023-24 to ₹2,143 crore in this budget.
Health is ranked seventh in the list of major items by budget allocation, falling behind Defence, Road Transport and Highways, Energy, Agriculture and Allied Activities, Home Affairs, Education, and IT and Telecom.
Health sees 0.15% rise in allocation
The total expenditure on the health sector is ₹89,287 crore, which represents a marginal increase of 0.15 per cent from the last Union Budget. The allocation is also over ₹1,371.63 crore less (approximately 1.54 per cent) than that made in the interim budget in February this year.
In the 2023-24 Budget, the Ministry of Health and Family Welfare was allocated ₹89,155 crore, with an increase of 13 per cent over revised estimates for 2022-23. The Department of Health and Family Welfare was allocated ₹86,175 crore, which accounts for 97 per cent of the ministry’s expenditure. The Department of Health Research was allocated ₹2,980 crore. The ministry was allocated ₹90,658.63 crore in the interim Budget for 2024-2025 presented in February, just before the elections.
Decline in health expenditure
Data collated by the PRS legislative research indicates a steady decline in health expenditure as a proportion of both the budget and GDP from 2018-19 to 2023-24.
“This trend becomes more significant when adjusted for inflation. In real terms, health spending has barely increased since 2019-20. The share of the total budget for health has fallen from 2.4 per cent in 2018-19 to just 1.9 per cent in 2023-24. Likewise, the percentage of GDP spent on health has decreased from 0.30 per cent to 0.28 per cent over the same period,” the report says.
Focus on social well-being
However the economic survey for the period 2023-24 claims, “the government’s spending on social services has shown a rising trend since FY16, with a focus on many aspects of the social well-being of citizens of the country. Between FY18 and FY24, nominal GDP has grown at a Compounded Annual Growth Rate (CAGR) of around 9.5 per cent. Overall, welfare expenditure has grown at a CAGR of 12.8 per cent. Expenditure on education has grown at a CAGR of 9.4 per cent – a tad below the rate of nominal GDP growth. Expenditure on health, as shown in the table below, has grown at a CAGR of 15.8 per cent.”