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Budget 2017: Jaitley unlikely to spring big surprises in health sector

While the budget is expected to increase marginally over the last year, larger funds are likely to be allotted to the National Health Protection Scheme (NHPS) that may be rolled out by April.

union budget Updated: Jan 26, 2017 17:50 IST
Rhythma Kaul
Rhythma Kaul
Hindustan Times
Budget 2017,Arun Jaitley,Rashtriya Swasthya Bima Yojana
Union finance minister Arun Jaitley to present the General Budget on February 1.(HT File Photo)

India needs to increase its public health spending from 1.2% of the gross domestic product (GDP) to at least 2% to boost healthcare services in a significant way, but finance minister Arun Jaitley is unlikely to oblige.

The government’s ambitious draft health policy that is being given final touches targets health spend to be 2.5% of the GDP. While the budget is expected to increase marginally over the last year, larger funds are likely to be allotted to the National Health Protection Scheme (NHPS) that may be rolled out by April.

The scheme is an improved version of the Rashtriya Swasthya Bima Yojana (RSBY) that provides cashless health cover up to Rs 30,000 for population below the poverty line and 11 other defined categories of unorganised workers during secondary and tertiary care hospitalisations.

The new scheme will provide a cover of up to Rs 1 lakh with additional top up of Rs 30,000 per senior citizen in those families.

The Union health ministry’s department for medical research was allocated Rs 1,017 crore in the last fiscal - a jump of 15%, as compared to Rs 880 crore in the last to last fiscal. This year, too, some additional funds are expected to be set aside for health research.

The draft health policy also talks of about 5% of the budget money to be allocated for the purpose under this policy.

There could be an increase in sin taxes like that on tobacco products. The government could hike excise duty on bidi, which was left out in the last budget.

Health budget in numbers
  • Despite new initiatives such as the National Health Protection scheme, Jan Aushadhi stores to sell affordable drugs, introduction of 10 more AIIMS-like institutes and national dialysis services, health outlays have remained stagnant under the NDA government.
  • 2016-17: Rs 33,000 crore
  • 2015-16: Rs 33,150 crore
  • 2014-15: Rs 35,163 crore

“The government doesn’t have much of fiscal space so they won’t increase the spend much. However, I would strongly recommend the Philippines model,” K Srinath Reddy, the president of Public Health Foundation of India, said.

The Philippines increased taxes on tobacco and of the revenue that was generated 85% was allocated to health. Of which, 80% was assigned to universal health coverage and the remaining 20% to strengthening health infrastructure.

“Taxes can also be increased on sugar and sweetened beverages. We have evidence in the form of Mexico where consumption of these harmful items came down significantly after it was taxed,” Reddy said.

Read More: India needs to prioritise its healthcare agenda to fast track country’s progress

Kerala set a precedent by introducing a ‘fat tax’ on junk food items such as burgers and pizzas sold in restaurants last year. The state government said the 14.5% tax was aimed at making people more conscious about food choices and curbing obesity.

Taking a clue from this development, this year’s budget could introduce a similar tax bracket.

The National Health Mission (NHM) is expected to see some additional budgetary allocation though marginal in comparison as there are sustainable development goals (SDGs) to be met.

Ministry of Ayush is likely to find a special mention in the coming budget, especially to boost the research projects that the ministry announced lately.

First Published: Jan 25, 2017 18:29 IST