Parliamentary Panel Recommends Increased Budget Allocation for Health Sector in India

This recommendation comes amid a decline in revised estimates for the health sector in 2023-24 compared to the budget estimates.

As India's interim budget for the fiscal year 2024-25 proposes an outlay of INR 90,171 Cr for the health sector, a Parliamentary Panel has recommended a further increase in budget allocation for the Ministry of Health and Family Welfare.

The panel calls for the establishment of a mechanism to ensure optimal fund utilization, emphasizing the importance of meeting targets outlined in the National Health Policy 2017.

This recommendation comes amid a decline in revised estimates for the health sector in 2023-24 compared to the current budget estimates.

Budget Allocation: Detailed View

The interim budget for 2024-25 has outlined a provision of INR 90,171 Cr for the health sector, reflecting a slight increase from the budget estimates of INR 88,956 Cr. However, the revised estimates for the fiscal year 2023-24 have decreased to INR 79,221 Cr compared to the budget estimates.

The Department Related Parliamentary Standing Committee on Health and Family Welfare, chaired by Rajya Sabha member Bhubaneswar Kalita, presented its 154th report on the action taken by the government on Demands for Grants 2023-24 of the Department of Health and Family Welfare.

The committee observed that the National Health Policy 2017 aims to raise the government's health expenditure to 2.5% of GDP by 2025 and reduce the proportion of households experiencing catastrophic health expenditure by 25% from the 2017 level by 2025.

"In view of the above targets and to enhance preparedness for future pandemics like COVID-19, the Committee feels that the increase in allocation as informed by the Ministry is insufficient and recommends an increase in the budget allocated to the Ministry of Health and Family Welfare Departments, with establishing a mechanism ensuring the optimal utilization of funds," stated the report.

The Committee noted that budgetary allocations for the Department of Health & Family Welfare have consistently been less than the projected Demands for Grants for the last five years. The approved budgets have often been lower than the projected demands, and there has been a decline in the projected demands since 2021-22.

For 2023-24, the projected budget estimates were INR 89,532.00 Cr, but the approved budget estimate was INR 86,175.00 Cr. The Committee highlighted that adjusting for an inflation rate of 5.5% for December 2022, the expected BE for 2023-24 should have been INR 87,150.00 Cr over the BE for 2022-2023.

"Public health plays an important role in facilitating the economic development of the country; therefore, in view of inadequate and overstretched public health infrastructure, the investments in the health sector should increase," said the Committee in a previous report. It recommended higher budgetary allocations for the health sector, considering the expected higher inflation rate.

Current Budgetary Allocations

As per the Demands for Grants for 2024-25 document from the Ministry of Finance, the Budget Estimates for the Ministry of Health and Family Welfare total INR 90,658.63 Cr.

This includes INR 87,656.90 Cr for the Department of Health and Family Welfare and INR 3,001.73 Cr for the Department of Health Research. The allocation for the Department of Health & Family Welfare sees a 12.84% increase compared to revised estimates for 2022-23 and a 3.83% increase compared to budget estimates for 2022-23.

Further, the Committee's recommendation for increased budget allocation emphasizes the need for enhanced preparedness for future pandemics, such as COVID-19. Additionally, the report underscores the importance of achieving the targets outlined in the National Health Policy 2017 and addressing the challenges of gender-gap in health.

The Parliamentary Panel's recommendation for a higher budget allocation reflects the ongoing efforts to align India's health sector with the National Health Policy 2017 goals.

As the country strives to increase health expenditures and reduce catastrophic health expenditures for households, adequate budgetary support becomes crucial. The focus on optimal fund utilization and a mechanism to ensure it demonstrates a commitment to strengthening the public health infrastructure and addressing emerging healthcare challenges.

Days back, Parliament's Department-related Standing Committee (DRSC) on Chemicals and Fertilizers put forth recommendations to the government, urging measures to support the domestic manufacturing of medical devices.

These recommendations include reducing goods and services tax (GST) rates, providing short-term custom-duty concessions on imported components, and extending the Phased Manufacturing Programme (PMP) to cover more medical devices.