[Editorial Analysis] Hitting the right notes with the health budget

Mains Paper 3: Economy
Prelims level: Union Budget 2021–22
Mains level: Government Budgeting: Inclusive growth and issues arising from it.


• Health care and health budget has taken centre stage due to an unfortunate novel corona virus pandemic that has devastated lives and livelihoods across the globe.

• Although India has performed relatively better in its COVID-19 management, even compared to countries with highly developed health systems, the impact of the outbreak on society and the economy is undeniable.

• The Union Budget 2021–22 was an eagerly awaited one and the announcements for the health sector, in particular, have been widely discussed.

Context of packages:

• The various Aatmanirbhar Bharat Abhiyaan packages announced by the Government of India, which also include several short-term and longer-term measures to strengthen the health sector.

• The Production-Linked Incentive schemes have been announced to boost domestic manufacture of pharmaceuticals and medical devices.

• The Mission COVID Suraksha has also been launched to promote the development and testing of indigenous vaccine candidates.

• At least 92 countries have approached India for a COVID-19 vaccine, thus bolstering the country’s credentials as the vaccine hub of the world.

• To ensure food and nutrition security for the poor and the vulnerable during the COVID-19 crisis, the Government of India launched the Pradhan Mantri Garib Kalyan Package for providing free foodgrains to 800 million beneficiaries.

• To facilitate access to subsidised grains across the country, the ‘One Nation One Ration Card’ scheme has been enabled in 32 States/Union Territories covering 690 million beneficiaries.

With respect to the “pandemic” of the health Budget:

• The health Budget, with allocations for water, sanitation, nutrition and clean air, it is important to appreciate that the presentation of a combined ‘health and well-being’ budget, is a welcome step.

• The National Health Policy (NHP), 2017, highlights the close links between health, water and sanitation.

• This year’s Economic Survey too recognises that improvements in access to bare necessities such as water, sanitation and housing are strongly correlated with progress in health indicators.

Good water, vaccine coverage:

• The substantive allocation for the newly launched Jal Jeevan Mission (Urban) is especially commendable as access to adequate, good quality water supply has major positive externalities for the health sector.

• Suboptimal access to clean water and sanitation is directly linked to diseases such as diarrhoea, polio and malaria. Moreover, water contaminated with heavy metals such as arsenic increases the risk of developing heart ailments and cancer.

• Another announcement in Budget 2021 was to expand the coverage of the pneumococcal vaccine across the country. Pneumococcal pneumonia is a major killer of children under the age of five years.

The Budget Strengthen “PMANSBY” and “PM-JAY” Yojana:

• The priority accorded to capital expenditure through the launch of the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana (PMANSBY), is also a much-need step.

• Further, PMANSBY lays emphasis on the health system being strengthened at all levels, including establishing integrated public health laboratories and institutes of virology.

• This is crucial as experts have repeatedly highlighted the need for enhancing disease surveillance and diagnostic capabilities to be better prepared for disease outbreaks.

• The emphasis on expansion of health and wellness centres under PMANSBY, together with a Rs.13,192 crore Finance Commission grant for strengthening the primary health system through local government bodies, is also noteworthy.

• The health Budget is the stagnant allocation for the Pradhan Mantri Jan Arogya Yojana (PM-JAY), a flagship scheme launched by the government in late 2018 as part of the Ayushman Bharat initiative.

• The Economic Survey estimates a 20% decline in the infant mortality rate between 2015–16 and 2019–20 in States that adopted PM-JAY, compared to a 12% decline in States that did not.

• It is important, therefore, to persist with this highly ambitious scheme and accelerate its roll-out as the absorptive and governance capacity of States improves.

The Promoting Ayurveda:

• The health Budget is the nearly 40% hike for the Ministry of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy (AYUSH).

• The pandemic has catalysed a behavioural shift in favour of preventive care, holistic health and wellness.

• There is considerable potential for promoting ayurveda and yoga as well as integrative health-care approaches in the post-COVID-19 scenario, especially for stress reduction and the management of chronic diseases.

The States must act too:

• We also have to ensure adequate funds for critical and closely-linked sectors such as nutrition, water and sanitation. The onus of increasing health spending, however, does not lie with the Centre alone but also with the States also.

• As elucidated in the National Health Accounts 2017, 66% of spending on health care in India is done by States.

• The States increase expenditure on health to at least 8% of their budget by 2022 as recommended by the National Health Policy (NHP), 2017 and the Fifteenth Finance Commission.


• The High-Level Expert Group on Universal Health Coverage had estimated that by 2020, India needs a 114 per cent increase in sub-centres and primary health centres, 179 per cent increase in community health centres and a 230 per cent increase in sub-district and district hospitals.

• The health sector has found a prominent place in the government’s agenda over the last few years, with the implementation of a series of well-thought-out and carefully sequenced reforms.

• While much remains to be done, the Union Budget 2021–22 has laid a strong foundation to increase the resilience of the sector in the post-COVID-19 era and achieving Universal Health Coverage by 2030 as part of the Sustainable Development Goals agenda.

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