Budget 2023: No Effective Rise for Health Deptartment, Experts Say

Though the allocations for the department rose marginally, it does not amount to much once adjusted for inflation. Experts also pointed out that the revised estimates for last year's budget were lower than the budgeted estimate.

New Delhi: Union finance minister Nirmala Sitharaman’s proposal to allocate Rs 86,175 crore to the department of health and family welfare for the financial year 2023-24, on the face of it, meant an increase of 3.82% compared to the previous budget.

However, in real terms, it meant a decline, experts said. “While this appears to be an increase, adjusting with inflation, this is actually a decline in funds,” says Indranil Mukhopadhyay, a health economist, who teaches at O.P. Jindal University. The inflation for December 2022 last year was 5.5%. “Therefore, to say that the budget for the health department has gone up is not true at all,” he added.

Former president of the Public Health Foundation of India K. Srinath Reddy said the allocation signals that health was not a dominant priority. “The priority is economic development and to focus on the economic growth story of the country. It is understandable because the worst phase of the pandemic is behind us,” he asked. Asked if pre-pandemic budgetary allocations gave sufficient room to do it at the cost of health, Reddy said, “Not very much.”

The budget claimed that the percentage of GDP spent on health has gone up to 2.1%. Both the experts The Wire spoke to expressed doubts, saying it was not clear whether only the health budget has been included in making this calculation or schemes which apparently improve health but are that of other departments have also been taken into consideration. For instance, in her speech presenting the Union Budget 2021-22, Sitharaman, had claimed that the “health and wellness budget” had been increased by 137% – when she had included the funds allocated to the departments of health, health research as well as drinking water and sanitation.

Furthermore, the budget documents also revealed in the last financial year, the government failed to allocate to the department of health what it had proposed. Against the budget estimates of Rs 83,000 crore, the revised estimates stood at only Rs 76,370 crore for the FY 2022-23.

An analysis of budgets of five preceding financial years showed this is the first time where the revised estimate was lower than the budgeted estimate. 

Also Read: Eight Charts to Make Sense of Budget 2023

New announcements

Sitharaman, in her budget speech on Wednesday, announced the launch of a special mission to “eliminate” sickle cell anaemia by 2047. “It will entail awareness creation, universal screening of 7 crore people in the age group of 0-40 years in affected tribal areas, and counselling through collaborative efforts of central ministries and state governments.” According to the tribal affairs ministry, this genetic condition is widespread among members of tribes. One in 86 births among Scheduled Tribes suffered from it, the data showed.

There is no specific head in the budget documents to say how much would be spent this year on tackling sickle cell anaemia. The health ministry, though, has clarified that it will be a part of the National Health Mission – an umbrella scheme of managing various programmes in which the Centre contributes 60% and the rest is borne by state governments. No more details are available on this Mission.

It may be noted here that this is yet another elimination target that India has set for itself after missing deadlines for similar targets for other diseases. Kala Azar (elimination deadline 2020), and filariasis (2017) are two such examples. Now, their deadlines stand revised for 2023 and 2030, respectively. India also envisages eliminating tuberculosis by 2025 – a target that experts say may not be achieved.

The finance minister also announced plans to open 157 new nursing colleges. “This is a welcome move as it will not only make India self-sufficient in nurses but also help generate human capital for other countries, especially, which have an ageing population,” Reddy, currently the honorary distinguished professor at the Public Health Foundation of India, said.

However, it remains to be seen if the creation of more nursing colleges will fill up the vacancies in rural areas. The latest Rural Health Statistics of India revealed that the creation of more medical colleges has failed to solve the problem of inadequacy of doctors in rural areas.

Nurses receive COVID-19 vaccine dose, at a nursing training college in Thane, Friday, July 30, 2021. Photo: PTI


Yet another important announcement came regarding the pharmaceutical industry. “A new programme to promote research and innovation in pharmaceuticals will be taken up through centres of excellence. We shall also encourage industry to invest in research and development in specific priority areas,” Sitharaman said.

The budget documents reveal that a major hike in allocation for this department has actually been done under the head ‘development of pharmaceutical industry’. Under this head, Rs 1250 crore have been proposed as allocation against Rs 100 crore last year. Under this head, the biggest amount has gone to the subhead ‘promotion of Bulk Drug Parks’ (Rs 900 crore) and promotion of Medical Device Parks (Rs 200 crore), among other components.

The idea behind both these components is common – infrastructure facilities for drugs, or medical devices, as the case may be – to bring down their cost of production. Bulk drugs, or Active Pharmaceutical Ingredients (APIs) are the main ingredients, or raw materials, of a medicine. Both these schemes were launched in 2020. This hike has been hailed by the pharmaceutical industry.

But what has seen a decrease is the production-linked incentive scheme (PLI) for manufacturing of APIs. Though the Indian pharma industry is the third largest in the world, by volume, its dependence on the import of APIs has been a matter of concern for a long time. To reduce this dependence, and increase domestic manufacturing of APIs, a PLI scheme to handhold SMEs and MSMEs was launched in 2020 for 10 years.

According to a reply given in the Lok Sabha in July last year, India imported APIs worth Rs 35,249 crore in 2021-22, as against exports worth Rs 33,320 crore. In the two years prior to this, as per the reply, the exports though had slightly outstripped the imports – a trend that saw a reversal in 2021-22. Amidst this, the allocation for PLI linked to APIs this year has seen almost a four-fold decrease to Rs 100 crore.

No specific allocations for research and innovation

As far as research and innovation in pharmaceuticals is concerned, which the minister described in her speech, there seems to be no specific allocation as such. The details to roll this out may come later in the year.

The Association of Indian Medical Device Industry (AiMed), nonetheless, minced no words in expressing disappointment. In a press release, its coordinator Rajiv Nath said the government did nothing to bring down the dependence on imports of this equipment. “Though our honourable prime minister urges India to become Atmanirbhar in Medical Devices, the medical devices imports continued to grow at an alarming level by 41% in FY22,” he said.

Imports of Medical Devices from China went up by nearly 50% last year on account of low duties and convenience to import. These are the same domestic manufacturers, when imports got disrupted during the COVID-19 crisis, the government relied heavily on them to meet the rising demand for essential COVID items,” he added.

The department of health research, which functions under the Union health ministry, saw a cut from Rs 3,200 crore in last year’s budget to Rs 2,980 crore for the next fiscal.

The Biotechnology Industry Research Assistance Council (BIRAC), which functions under the Union science and technology ministry and played a crucial role in the development of COVID-19 vaccines in India, got Rs 40 crore – a hike of Rs 5 crore in absolute terms. BIRAC is a not-for-profit company that serves as an ‘industry-academia interface’ to aid innovation in biotechnology.

Representative image of pharmaceutical research. Photo: Louis Reed/Unsplash

The budget for the National Health Mission (NHM) – a combined programme of the National Rural Health Mission (NRHM) and National Urban Health Mission (NUHM) – which is arguably one of the biggest umbrella schemes of the health ministry that seeks to serve various verticals including the health of children and women, also came down from Rs  37,159 crore previous year to Rs 36,785 crore this year.

Under the Tertiary Care Programme of the Centre, all major non-communicable diseases, which are on the rise in India, are covered. To aid their treatment, the Union government transfers money to states for the implementation of schemes for cancer, diabetes and cardiovascular diseases, health care for the elderly, the national blindness control programme, telemedicine, mental health and tobacco control. Its budget was slashed to Rs 289 crore from Rs 500 crore.