In Budget 2020-21, health sector allocations witness 8% jump
Health Infrastructure upgradation has been the focus this year, with many announcements made by finance minister Nirmala Sitharaman meant to improve the quality of medical colleges, especially at the district level, and also to increase the number of hospitals empanelled under the Ayushman Bharat scheme.
With about Rs 69,000 crore allocated to the health sector, there has been an increase of about 8% in the health budget as compared to the previous year, in this year’s Budget.
Even though the Modi government’s flagship health insurance scheme- Ayushman Bharat-Pradhan Mantri Jan Arogya Yojna (AB-PMJAY) didn’t see any budgetary increase this year, it still gets about Rs 6,400 crore of the total amount assigned to the health sector.
Health Infrastructure upgradation has been the focus this year, with many announcements made by finance minister Nirmala Sitharaman meant to improve the quality of medical colleges, especially at the district level, and also to increase the number of hospitals empanelled under the Ayushman Bharat scheme, especially in the tier 2 and tier 3 cities.
There are about 20,000 hospitals empanelled under the scheme currently.
“Proceeds from taxes on medical devices would be used for development of hospitals...The government will provide viability gap funding for the process,” said Sitharaman.
Rajiv Nath, forum coordinator of the Association of Indian Medical Device Industry (AiMeD), said, “Finally we may have something to help address over Rs 38,837 crore, 80-90% import dependent Indian Medical Devices Sector.”
“It’s an excellent idea to tax imports of medical devices to fund the capacity building of healthcare delivery in public healthcare and with the twin advantage of accelerating medical devices manufacturing as a Make in India enabler so that Indian National Healthcare security concerns are addressed.”
Following the National Health Policy document, the government is open to making use of the private sector to help build and sustain health infrastructure in the country.
The government thinktank Niti Aayog’s proposal to allow private players to run medical colleges attached to District Hospitals under the public private partnership (PPP) model also found mention in the finance minister’s speech.
Apart from running medical colleges, the PPP model will also be used to create more hospitals in tier 2 and tier 3 cities to be empanelled under the Ayushman Bharat scheme.“112 aspirational districts to get priority,” she said.
Setting up hospitals on Private Public Partnership with the provision of Viability Gap Funding (VGF) in 112 aspirational districts in the country got a thumbs up from the industry.
“It will go a long way in creating robust health infrastructure especially in areas where Ayushman Bharat benefits have not reached yet especially to the weaker section. We hope to see more investments in primary care and digital health to achieve the goal of Health for All,” said NATHEALTH President H Sudarshan Ballal.
“While this is a welcome move, we should earmark direct infrastructure funds and not tax medical equipment which are essential components for affordable healthcare, Private sector investments can supplement these efforts and sustainable and viable financing can be developed which leads to an expansion of the demand pool for preventive, curative and rehabilitative health services. Increase in deposit insurance, lower individual rates for middle class and change in dividend tax are welcome steps that will boost overall sector confidence,” he added.
The government-run Jan Aushadhi stores that sell generic medicines at cheaper rates would be expanded to every district in the next four years, with improved number of medicines and surgical items.
However, the central allocation for the National Health Mission saw a marginal drop this year from Rs 34290 crore to Rs 34115 crore.