Interim Budget 2024–25: Will the Government Honour That Health Is Wealth?

India as the fifth largest economy needs to step up its allocation from 2.1% of its GDP in '23-24 to 2.5% this year.

Six expectations from the interim budget pertaining to the healthcare space.

(Photo: The Quint)

Health is essentially at the core of sustainable development and the same has been recognised all over the globe. With the Interim Budget to be announced soon, the Indian healthcare sector waits in anticipation, considering the sheer size of the population and the sub-par facilities available to the majority.

In the past, this sector has been a priority for the government, with a steady increase in budgetary allocations every year.

The Union Budget for 2023-24 allocated Rs 89,155 crore to the Ministry of Health and Family Welfare, nearly a 3.4 per cent increase in comparison to Rs 86,200 crore in the Financial Year (FY) 2022-23. This is driven by increased allocation to the Central expenditure to continue building sustainable healthcare infrastructure and ensure Health system preparedness to handle growing needs.

Budgetary allocation the Ministry of Health and Family welfare.

Photo: The Quint

So, here are some of the expectations from the budget pertaining to the healthcare space.

Aligning Budgeting Allocation With SDGs

The four largest economies of the world, on an average spend close to 12 to 16 per cent of their Gross Domestic Product (GDP) on healthcare as per the OECD Health Statistics 2023.

India being the fifth largest economy in the world needs to step up its allocation in the said field from 2.1 per cent of the GDP in the FY 2023-24 to at least 2.5 per cent this year.

With 2030 soon approaching, it's important to stand true to the bold commitment that The Sustainable Development Goals (SDGs) make, to end the epidemics of AIDS, tuberculosis, malaria, and other communicable diseases by 2030, to achieve universal health coverage, and provide access to safe and affordable medicines and vaccines for world over and in India – home to almost one-fifth of the world’s population with the most diverse needs and expectations.

We all need to pull up our socks and align our budgetary allocation with the SDGs. More money needs to be pumped in to tackle the magnitude of healthcare challenges that India faces.  

Enhanced Investment towards 'One Health'

As defined by the World Health Organization, 'One Health' is based on the idea that human, animal, and environmental health are interdependent, meaning that human health cannot exist without "health" in the ecosystems that support it.

Therefore, to achieve the SDGs, One health will be instrumental, and the need of the hour is to also look actively at and work proactively towards Animal Health and Environmental Health, which in turn affects human health.

Animals happen to be the vector or carriers for a plethora of infectious diseases.

In recent decades, five out of the six public health emergencies of international concern declared by the World Health Organization (WHO) were of animal origin, and at least 75 per cent of newly emerging infectious diseases have animal origins, and it is believed that 60 per cent of infectious diseases that affect humans now are zoonotic.

The idea behind investing sufficiently in Animal Health is to reduce the risk that a pathogen will emerge from animals (both domesticated and wildlife) to be transmitted into the human population, potentially endangering the health, nutritional security, and livelihoods of vulnerable groups. 

As estimated in 2022, according to the World Bank, the expected benefit of One Health to the global community was approximately at least USD 37 billion per year as per WHO. The estimated annual need for expenditure on prevention is less than 10 per cent of these benefits.  

In the past, an allocation of 72 crores was made towards strengthening the National Centre for Disease Control (NCDC) branches to augment disease surveillance of zoonotic diseases. The Prime Minister's Science, Technology, and Innovation Advisory Council (PM-STIAC) in its 21st meeting, approved setting up a National One Health Mission with a cross-ministerial effort that will serve to coordinate, support, and integrate all the existing One Health activities in the country and fill gaps where it is appropriate. 

The need of the hour is to commit more funds towards the critical enabling activities of the 'One Health Mission' which involves work towards targeted Research and Development, data and database integration, streamlining regulatory approval processes, and building a governance model around it.

The focus area should be around designing and implementing programmes, policies, legislation, and research towards various zoonotic diseases which have the potential to jump barriers and cause infections in humans. Budgetary allocations should also be made towards enhancing and integrating disease surveillance and early warning systems, upgrading and expanding the laboratory network; improving interoperable data systems; and building capacity for data analytics for risk analysis and risk communication.  

The road to achieving and implementing One Health may not be the easiest due to the requirement of major structural changes to integrate the human, animal, and environmental health fields and support multi-sectoral communication, collaboration, coordination, and capacity strengthening.

However, a structured analysis of the critical gaps in one health implementation and how they can be narrowed might help.  

Reducing Out-of-Pocket Expense by Improving Primary Healthcare

Out-Of-Pocket Expenditure (OOPE) is the money paid directly by households in return for healthcare. This occurs when services are neither provided free of cost through a government health facility, nor is the individual covered under any public or private insurance or social protection scheme.

The world aims to achieve Universal Health Coverage (UHC) by 2030. Considering financial protection is at the core of UHC and one of the final coverage goals, contributing towards ensuring financial protection to individuals is instrumental.

Financial protection is achieved when direct payments made to obtain health services do not expose people to financial hardship and do not threaten living standards. Quality healthcare should be available, accessible, and affordable for all.

In India, the healthcare resources distribution is highly skewed with nearly 75 per cent of healthcare infrastructure being present in metro cities. The penetration of medical facilities in tier 2 areas and below is low.

At ground zero, what is needed is improvement and investment in Primary healthcare infrastructure. Primary healthcare encompasses the treatment of common health issues – providing essential drugs, maternal and child care, immunisation, and other preventive measures. Assuring free, comprehensive primary care should be the key objective.  

The scheme Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM ABHIM), which seeks to create primary health infrastructure and provide financial support to states to expand comprehensive primary health care has a planned total outlay of Rs 64,180 crore from 2021-22 to 2025-26.

In fact, the allocation towards PM ABHIM increased from Rs 1,885 crore in 2022-23 to Rs 4,200 crore in 2023-24.

While the OOPE in India has declined from 64.2 per cent of the total health expenditure in 2014 to 48.2 per cent in 2019, it is still high.

The Standing Committee (2022-23) on Health and Family Welfare noted that India ranks 176 out of 196 countries in terms of the percentage of current health expenditure spent out of pocket.

Incentivisation of the Private Sector

The inadequate allocation of public funds for healthcare in India has left a huge gap in the sector, leading to a shortage of medical infrastructure, equipment, personnel, and services in many parts of the country. In order to achieve UHC 2030 and considering the limited healthcare infrastructure and resources in rural areas, there is an urgent need to accelerate public health spending.

The best way forward would be to rope in the private sector to supplement the government efforts towards ramping up the physical and digital health infrastructure.

The government must take a proactive role in promoting and facilitating public-private partnerships in healthcare, by creating an enabling policy environment, and providing incentives and subsidies. Private players should also be offered beneficial tax rates on investments and tax breaks on the capital expenditure that they incur.

In a public-private partnership setting, the government can provide policy support, funding, and regulatory oversight, while the private sector can bring in expertise, innovation, and investments. 

Focus on Pandemic Preparedness

While a significant percentage of the budget has been dedicated to tackling Covid 19 since the pandemic hit the world, the past year's budget just had a mere 497 crore allotted to look after the Covid situation.

Given the rise in coronavirus cases globally, the government should commensurately increase the budgetary allocation to deal with such unprecedented situations.

There was and there should be a continued emphasis on strengthening the healthcare system’s ability to respond to future health crises. This could include investments in medical research, stockpiling essential medical supplies, and upgrading healthcare facilities.  

Allocation Towards Geriatric Care

To realise the Amrit Kaal Vision by 2047 ie, to make India Atmanirbhar, structuring an elderly-friendly society is crucial. India’s elderly population is steadily rising and along with the incidence of chronic diseases. Therefore, geriatric care is an area that needs to be looked at on an urgent basis.

The Pradhan Mantri Jan Arogya Yojana (PMJAY) should make an outreach to universally cover older persons with insurance so that hospitalisation needs are covered. The scheme should cater to the nation’s elderly population aged above 80 except for income tax payers.

The National Programme for Health Care of Elderly (NPHCE) should be made available in all the districts of the country and its budget should be available exclusively and monitored likewise. 

There can also be incentives for caregiving for the elderly within the family by the introduction of additional tax exemptions (beyond the exemption limit of 2.5 lakh), to be claimed by any one of the adult children taking care of the elderly. 

(The author is the Chief Strategy and Diversification Officer and the Practice Lead at Health, Nutrition and WASH I IPE Global Limited (international). Co-authored by Snigdha Rana, Associate, Health, Nutrition and WASH, IPE Global (international development consulting firm. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)