What health sector got in 2016?

Surbhi Kaul / Janaury 10, 2016

India’s union budget is one of the nation’s most closely watched events -- not just for the numbers, but for understanding the country’s future planning. As the government presented its second budget in the office, the question is what has it planned for the health of a population of 1.25 billion? Here are the five takeaways from the health budget.

1.       This year the Union Budget comes with a slight increase in allocation to health, compared to last year when it allocated Rs. 33,282 crore for health.  It does not reflect the larger governmental resource pool available for healthcare from the growing GDP and falling petroleum prices. However, out of the nine pillars of Union Budget, one was social healthcare.

2.       The Government has announced a health insurance coverage that will cover health cover up to Rs. one lakh per family. For senior citizens an additional top-up package of up to Rs 30,000 will be provided. This is all the more important considering that nearly 75% of India population is currently without any health insurance.

3.       The Government has acknowledged that quality medicines are unaffordable for common citizens and therefore has decided to open 3,000 drug stores under the Prime Minister's Jan Aushadhi Yojana (scheme). The stores will handle the shortage of drugs, especially in rural areas.

4.       One of the major announcements was also about the launch of National Dialysis Programme to deal with the high costs involved in renal dialysis processes. As part of the programme, every district hospital will have facilities of renal dialysis. Finance Minister Arun Jaitley also added in his budget speech that dialysis equipment will be exempt from customs duty, fully or partially. However, the government has not addressed the issue of recent increase in import duty on medical equipment and devices. The medical technology sector is in an infancy stage in India with manufacturing limited to less complex devices. India still imports more than 75% of medical equipment / devices and hence the duty increase will result in increased healthcare cost.

5.       In comparison to previous years, a lesser amount of focus was given to the development of healthcare sector. In the last budget the government had allocated budget for five AIIMS-like hospitals across the country, and had given tax deduction for medial expanses. Overall India spends 49% of its Union health budget on primary healthcare, 22% on secondary and 28% on tertiary care services. Despite economic growth over the past two decades, successive governments have kept a tight rein on healthcare expenditure. India spends only about 1 per cent of its GDP on public health, compared to 3 per cent in China and 8.3 per cent in the US.

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