Budget 2023: Marginal hike in healthcare allocation, key schemes see cuts

India’s budget for healthcare saw a marginal increase of 13 percent in Budget 2023-24 from Rs 79,145 crore in 2022-23 to Rs 89,155 crore in 2023-24. Over the last five years of the Modi government, the sector has seen a 27 percent rise in allocations from Rs 62,659 crore in FY20 to Rs 89,155 crore in 2023-24.

However, schemes such as Pradhan Mantri Ayushman Bharat Health Infrastructure Mission as well as the Pradhan Mantri Swasthya Suraksha Yojana have seen lesser amounts being allocated to them in this budget.

The allocation for one of the flagship schemes of the government — Pradhan Mantri Ayushman Bharat Health Infrastructure Mission, a pan-India health scheme for strengthening healthcare infrastructure — fell to Rs 645.8 crore from the previous budget estimate of Rs 978 crore. The utilisation of the fund has been even lower, with the revised FY23 estimate standing at Rs 281.6 crore.

The Pradhan Mantri Swasthya Suraksha Yojana, announced with the objectives of correcting imbalances in the availability of affordable/ reliable tertiary healthcare services, has been allocated Rs 3,365 crore, a significant decline from Rs 10,000 crore the previous year.

According to the Economic Survey of 2022, India's public expenditure on healthcare was 2.1 percent of GDP in 2022, up from 1.8 percent in 2021 and 1.3 percent in 2020. However, in the current budget, which is the last full budget of the Modi 2.0 government, the budgeted expenditure on the health sector stood at around 1.98 percent of GDP.

With reported cases low for over a year, allocation for the Pradhan Mantri Garib Kalyan Package, an insurance scheme for healthcare workers fighting COVID-19, has come down from Rs 226 crore to just Rs 1 lakh.

“Covid showed how vulnerable healthcare infrastructure is. Even though there was 16.5 percent growth in money spent on healthcare, it remains only 1-.15 percent of GDP. This needs to go to at least 3-4percent,” said Sudhir Kalhan, chairman, Institute of Minimal Access, Metabolic and Bariatric Surgery, Sir Ganga Ram Hospital, and chairman, Healthcare Council.

Universal health coverage amount raised by 10 percent

The government’s ambitious health insurance policy, Pradhan Mantri Jan Arogya Yojana was launched with a goal to provide universal healthcare by 2030. The scheme, under which nearly 50 crore Indians receive cashless hospitalisation benefits of up to Rs 5 lakh, has been given an increased allocation of Rs 7,200 crore in FY24, up from last year’s allocation of Rs 6,412 crore.

While the scheme has been able to cover the bottom 50 percent of the population and around 20 percent were covered through social and private voluntary health insurance, it is the remaining 30 percent that continue to be devoid of health insurance, said a NITI Aayog report published in October 2021.

Research department sees significant rise in budget allocation

The amount for the department of health research has been doubled from Rs 3,143 crore allocated the previous year to Rs 6,026 crore for the coming financial year. The budget for this department in the past five years has seen a rise of 67 percent from Rs 1,900 crore in FY20.

Medical research seems to be a priority this year. Facilities in select Indian Council of Medical Research labs will be made available for research by public and private medical college faculty and private sector R&D teams for encouraging collaborative research and innovation.

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,” finance minister Nirmala Sitharaman said in her budget speech last week.

Futuristic tech to become part of medicare

Focusing on the Indian medical device industry, Sitharaman laid down the Centre’s road map. She said that dedicated multidisciplinary courses for medical devices will be supported by the government in existing institutions to ensure availability of skilled manpower for medical technologies. High-end manufacturing and research will also be promoted by the government.

The investment had been long awaited by the healthcare sector which says that this will have a multiplier effect, bolstering private investment in paramedical education, while also attracting many more players.

“The announcement has come as a shot in the arm for institutions. This initiative will create a tech-savvy talent pool who will be able to operate new-age medical devices. What comes as a boon is the announcement of the setting up of centres of excellence (CoEs) for artificial intelligence at top educational institutions to develop cutting-edge AI solutions. Undoubtedly, the CoEs will facilitate the creation of many tech-enabled health solutions,” said Pranav Bajaj, co-Founder, Medulance Healthcare.

Budget announcements this year

The government has announced its plan to set up 157 new nursing colleges, and also a Sickle Cell Anaemia Elimination Mission that aims to eradicate the disease by 2047. The mission will entail awareness creation, universal screening of 7 crore people in the age group of 0-40 in affected tribal areas, and counselling through collaborative efforts of central ministries and state governments.