Health sector sees Rs 2,011-crore cut

Aditi Tandon

The BJP government’s first full Budget has fallen short of expectations on the health front with the sector witnessing a cut of Rs 2,011 crore over the last Budget. This translates into a 5.7 per cent reduction, a move that doesn’t bode well for Prime Minister Narendra Modi’s promise of Universal Health Assurance, which required increased expenditure.

The justification the government is giving for reducing the education (and the health) budget is that as per the recommendations of the 14th Finance Commission, 62 per cent of all tax receipts will now go to states.

Finance Minister Arun Jaitley’s Budget speech in fact sidestepped the mention of Universal Health Assurance Mission altogether even though this was BJP’s Lok Sabha poll promise. Former Health Minister Harsh Vardhan had formed a committee to suggest ways of rolling the Mission, a project which incumbent Health Minister JP Nadda is pursuing. But Jaitley’s meager allocation of Rs 33,152 crore for the health sector (this includes Rs 1,008-crore allocation for AAYUSH, now a separate ministry) will make the goal of universal health coverage challenging. The allocation also won’t help the government’s plan to raise public expenditure on health from 1.4 per cent of the GDP to 3 per cent as the National Health Policy document (under discussion) promises.

Some good news

The good news is the establishment of six new AIIMS-like institutes in J&K, Punjab, Tamil Nadu, Himachal, Assam and Bihar. With these announcements, Bihar becomes the first state to have two AIIMS-like institutes, a move the RJD and Congress termed the BJP’s “election stunt”.

No love lost for tobacco

The government continues to tax tobacco with Jaitley increasing excise duty on cigarettes to the extent of 25 per cent on cigarettes of length not exceeding 65 mm and 15 per cent for cigarettes of other lengths, cigars, cheroots and cigarillos. The budget has also increased excise duty on cut tobacco from Rs 60 per kg to Rs 70 per kg.  Another positive is the exemption of basic customs duty of 5 per cent and countervailing duty (CVD) on artificial hearts and the FM’s move to offer service tax exemption for all ambulance services provided to patients.

Health insurance

Though the Budget proposal of increasing the limit of deductions in respect of health insurance premium from Rs 15,000 to Rs 25,000 appears encouraging on the surface, public health activists say it will would push people from government to private sector. “This means the government is foregoing public money it was earlier getting to spend on strengthening public health infrastructure. This also means the government is abdicating its responsibility and encouraging people to buy health insurance from private players. Also, the government’s focus on new AIIMS is misplaced when our primary health infrastructure is crying for attention,” said Amit Sengupta of Jan Swasthya Abhiyan.