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In the Union Budget 2022-23, the health sector has been allocated a little over Rs 86,000 crore – a hike of 16 percent over nearly Rs 74,000 crore in 2021-22. Out of this, Rs 83,000 crore have been allocated to the Department of Health and Family Welfare while Rs 3200 crore have been allocated to the Department of Health Research. Finance Minister Nirmala Sitharaman also announced a National Tele Mental Health Programme and roll out of an open platform for the National Digital Health Ecosystem. The National Tele Mental Health Programme will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre and IIT-Bangalore providing technology support. The National Digital Health Ecosystem will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.

Problems in India’s health sector

  • There is a massive shortage of medical staff, infrastructure and last mile connectivity in rural areas. Eg: Doctor : Population 1:1800 and 78% doctors cater to urban India (population of 30%).
  • Massive shortages in the supply of services (human resources, hospitals and diagnostic centres in the private/public sector) which are made worse by grossly inequitable availability between and within States.
    • Data from the National Health Profile-2019, the total number of hospital beds in the country was 7,13,986 which translates to 0.55 beds per 1000 population.
    • Furthermore, the study also highlighted that 12 states that account for 70 per cent of India’s 1.3 billion population were found to have hospital beds per 1000 population below the national average of 0.55 beds.
    • For example, even a well-placed State such as Tamil Nadu has an over 30% shortage of medical and non-medical professionals in government facilities.
  • Health budget: The health budget has neither increased nor is there any policy to strengthen the public/private sector in deficit areas. While the Ayushmaan Bharat provides portability, one must not forget that it will take time for hospitals to be established in deficit areas.
    • This in turn could cause patients to gravitate toward the southern States that have a comparatively better health infrastructure than the rest of India.
  • Infrastructure constraints: There are doubts on the capacity of India’s infrastructure to take on the additional load of patients during pandemics like Covid-19 as seen recently.
    • There is a growing medical tourism (foreign tourists/patients) as a policy being promoted by the government, and also domestic patients, both insured and uninsured.
  • Absence of primary care: In the northern States there are hardly any sub-centres and primary health centres are practically non-existent. First mile connectivity to a primary healthcare centre is broken. For eg, in Uttar Pradesh there is one PHC for every 28 villages.
  • Out of pocket expenditure high: Even the poor are forced to opt for private healthcare, and, hence, pay from their own pockets. As a result, an estimated 63 million people fall into poverty due to health expenditure, annually.
    • Inequities in the health sector exist due to many factors like geography, socio-economic status and income groups among others. Compared with countries like Sri Lanka, Thailand and China, which started at almost similar levels, India lags behind peers on healthcare outcomes.
  • Rural medical practitioners (RMPs), who provide 80% of outpatient care, have no formal qualifications for it. People fall prey for quacks, often leading to grave disabilities and loss of life.
  • Dependency on import: Compounding the problem of poor health infrastructure and low spending, especially in the current COVID-19 environment that has caused significant disruptions to the global supply chains, is India’s dependence on medical devices imports.
    • As per IMA data, India’s medical devices imports were around Rs 39,000 crore in FY2019, having seen a growth of 24 per cent from the previous year.
  • Numerous Schemes: The Government has launched many policies and health programmes but success has been partial at best. The National Health Policy(NHP) 2002 proposed to increase Government spending on health by two to three per cent of the gross domestic product (GDP) by 2010 which has not happened yet. Now, the NHP 2017, has proposed to take it to 2.5 per cent of the GDP by 2025.
  • Healthcare without holistic approach: There are a lot of determinants for better health like improved drinking water supply and sanitation; better nutritional outcomes, health and education for women and girls; improved air quality and safer roads which are outside the purview of the Health Ministry.

 Capital Expenditure on Health Sector will yield multiplier effect:

  • The priority accorded to capital expenditure is also a much-need step.
  • Capital expenditure has, historically, constituted only a small percentage of the overall health Budget, with the majority of funds going towards salaries and administrative costs.
  • Further, PMANSBY lays emphasis on the health system being strengthened at all levels, including establishing integratedpublic 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.
  • Additionally, the emphasis on expansion of health and wellness centres for strengthening the primary health system through local government bodies, is also noteworthy.

 Successful implementation of PM-JAY: decline in Infant Mortality rate:

  • Another point of discussion in relation to the health Budget is the stagnant allocation to a flagship scheme launched by the government in late 2018 as part of the Ayushman Bharat initiative.
  • Despite being a relatively new scheme, the Economic Surveyestimates 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 improve.

 Resilience of health sector: Good water, vaccine coverage:

  • 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 important public health-related announcement in Budget 2022 was the government’s decision to expand the coverage of the  vaccineacross the country.
  • Pneumococcal pneumoniais a major killer of children under the age of five years. Once universalised, this indigenously developed vaccine could save up to 50,000 lives annually.
  • India has already delivered over eight million doses of the vaccine to health-care and frontline workers thus far the fastest vaccination drivein the world.

Links between Health, Water and Sanitation:

  • With respect to the “padding” of the health Budget, with allocations for water, sanitation, nutrition and clean air, as pointed out by some commentators, it is important to appreciate that the presentation of a combined ‘health and well-being’ budget,which sets the tone for greater integration of these areas, is in fact a welcome step.
  • The National Health Policy (NHP), 2017, highlights the close links between health, water and sanitation.
  • Economic Surveytoo recognises that improvements in access to bare necessities such as water, sanitation and housing are strongly correlated with progress in health indicators.

 States must act too on spending on Health sector:

  • Undoubtedly the budgetary allocation for health needs to be ramped up over time.
  • We also have to ensure adequate fundsfor 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.
  • In fact, as elucidated in theNational Health Accounts 2017, 66% of spending on health care in India is done by States.
  • It is imperative, therefore, that States increase expenditureon 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 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 2022–23 has laid a strong foundation to increase the resilienceof the sector in the post-COVID-19 era and achieving Universal Health Coverage by 2030 as part of the Sustainable Development Goals agenda.