Budget must revive tottering public healthcare sector, but Modi govt is sold on the idea of corporatisation

Over 40 per cent of Indians must sell assets or borrow for medical treatment in absence of poor public healthcare facilities. But Modi govt’s policies favour privatisation of existing infrastructure

Representative Photo
Representative Photo
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Dr Arun Mitra

Good health and education form the basis of development of any society. Investment in these two sectors is an asset for the present as well as the future. Unfortunately, however, successive governments have ignored these two sectors. Public health spending, in particular, is highly inadequate, severely impacting the health of the people of our country.

Whereas the first National Health Policy 1983 emphasized on promotive, preventive curative and rehabilitative services, the latest National Health Policy shifted its emphasis towards the provision of healthcare through the private sector and opening up secondary and tertiary level healthcare for private investment.

As a result, the spirit and principles of primary healthcare was compromised. This resulted in a setback to the equitable distribution of healthcare. This was a reflection of neo-liberal economic model adopted by the current government country and the World Trade Organisation after it was founded on 1st January 1995.

The National Health Policy (NHP) 2017 made a leap forward to a corporate-centric and insurance-based healthcare system. It also highlighted on strategic purchase of non goverment secondary and tertiary care services. Insurance system was further strengthened and public funds were diverted to the private insurance and healthcare sector.

Presently, 75 per cent of healthcare expenditure is borne by the people from their own pockets. Out of this, nearly 70 per cent is spent on OPD care. This is pushing 6.3 crore population of India to poverty every year. This catastrophic healthcare cost is an important cause of impoverishment which in turn adds to poor health.

India has roughly 20 health workers per 10,000 population, with 39.6 per cent doctors, 30.5 per cent nurses and midwives, and 1.2 per cent dentists. Total doctor-population ratio 1:1445. It is to be noted that govt. doctors-population ratio is 1:11,926 in contrast to the desired 1:1,000. This is a major cause of inequality in healthcare for the marginalized sections of society who are dependent solely on State healthcare system.

WHO recommends a minimum of 5 per cent of the GDP as expenditure on health. The Planning Commission of India had said that State spending on health will be 2.5 per cent of GDP by end of 12th five year plan and 3 per cent by 2022.

Interestingly, under the present BJP government, the 2015 NHP draft put this figure at 2.5 per cent of GDP by 2020. The revised NHP 2017 pushed the time frame further to 2025. National Health Mission budget was decreased by 10 per cent. The ICDS budget has been decreased. Nutrition budget decreased by Rs.1000 crore from Rs 3700 crore to Rs 2700 crore in the 2021-22 budget.


Meanwhile, investment in health insurance has increased. Ayushman Bharat scheme is an insurance-based system. The whole healthcare concept is insurance based which fails to provide comprehensive healthcare. Senior citizens are the worst affected.

Ayushman Bharat covers only 50 crore population while the remaining 88 crore are left out. Moreover, it is applicable for indoor care only, whereas 70 per cent of out of pocket expenditure on health is on OPD care.

There are several conditions attached to get registered with this scheme. Even eligible people find it very hard to get a card made. Other State-run insurance schemes offer a limited benefit.

For a person to get insured with a private or public sector company, one has to shell out huge amounts of money. The ESI started in 1952, CGHS in 1954 and ECHS in 2003 provide comprehensive healthcare to their employees to an extent. But there is a move to dilute the ESI.

The government is planning to handover district hospitals to the private sector to open medical colleges. In these hospitals, 50 per cent patients will get free treatment while the rest will have to pay. The free patients will have to get authorization from a designated authority, thus creating hurdles for them.

Much was expected from the Union budget presented last year. An outlay of Rs 223846 crore on health in the budget for the year 2021-22 appeared very encouraging. It was said to be a 137 per cent increase from the previous budget of Rs 94452 crore.

However, a detailed review of this brought forward the truth. The actual amount was a marginal increase in the allocation to Department of Health and Family Welfare from Rs 65012 crore in 2020-21 budget to Rs 71269 crore, a meagre 10 per cent increase and only 2.04 per cent of the total budget of Rs. 3483236 crore.

The most worrying factor in the budget was reduction in the spending on nutrition from Rs 3700 crore to Rs 2700 crore. This is at a time when India is at the 102nd position in global Hunger Index out of 117 countries, worse even than our neighbouring south Asian countries.

Various studies have concluded that to ensure comprehensive primary healthcare, there is a need to enhance public health spending on health to a minimum of 5 per cent of the GDP.

More than 40 per cent of our population has to borrow or sell assets for medical treatment. This is totally against the principles of equity and justice. Marginalised sections like Dalits, Muslims and other socio-economically weaker groups are the worst affected.


The concept of universal comprehensive healthcare was first of all realized by the Soviet Union. The Soviet constitution in 1936 guaranteed that the citizens of the USSR had the right to health protection. The National Health Services (NHS) was launched in the UK on July 5, 1948 by the then Health Secretary Aneurin Bevan. This gave the benefit of free healthcare to the population. The Cuban government adopted the concept of social medicine into practice. Its effect is well recognised globally. The government of Cuba spends approximately Rs.25000 per person each year on healthcare, while India spends around Rs.1753 on health per capita. The corresponding figure is Rs. 2.65 lakh in the UK.

Economic Survey 2020-21 had strongly recommended an increase in public spending on healthcare services from 1 per cent to 2.5-3 per cent of GDP as envisaged in the National Health Policy 2017. It also noted that this can significantly reduce Out-of-Pocket-Expenditure (OOPE) from 65 per cent to 35 per cent of the overall healthcare spend.

It is therefore imperative that the public health spending be increased to a minimum of 5 per cent of the GDP. An immediate increase to three times of the present allocation to health is the need of the hour in the upcoming budget.

(IPA Service)

Views are personal

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Published: 24 Jan 2022, 9:00 PM