Parliamentary Committee Calls for Substantial Increase in Health Budget to 5 percent of GDP by 2025

The report mentioned that it "strongly recommends the Government to increase its health expenditure to 2.5 % of GDP in the next two years and to 5% by 2025."

The Department-related Parliamentary Standing Committee on Health and Family Welfare, headed by Prof. Ram Gopal Yadav, has submitted its 126^th report on Demands for Grants 2021-22 on 08.03.2021.

Also Read: Parliamentary panel on Health expresses concern over vaccine hesitancy among healthcare workers

During the meeting held on 17^th February, 2021, the Parliamentary Committee considered the Demands for Grants (2021-22) of the Department of Health and Family Welfare. After listening to the views of Health Secretary on the matter, the Panel came to understand that the Budget of the Department of Health and Family Welfare looked at the Health Sector in a holistic manner as the Budget was not only focusing on the Ministry of Health and Family Welfare but was also looking at the promotive, curative and preventive aspects of health.

So, the budget included the Department of Health and Family Welfare, Department of Health Research, Ministry of Ayush, Department of Drinking water and Sanitation as well as Nutrition because all these factors impinge on human health. In addition, it also included Covid vaccination.

The data regarding the Projection and allocation of Health Budget for the year 2021-22 made it clear before the committee that contrary to the Projection of estimates at a total of Rs 121889.55 crore, only Rs 71,268.77 Crore have been allotted for the department. Therefore, the department faced a shortfall of Rs 50,620.78 crore.

The Committee also took note of the fact that over the last three to four years the Health Ministry had spent more than 95%, at times even 100% of budgetary allocation. In fact, the Secretary of Health also submitted before the Committee that given the track record of utilization, the Department was hoping for a slightly higher allocation in the present financial year.

It had also been submitted before the Committee that although the Department of Health and Family Welfare had made a proposal of Rs.5,97,906.56 Crore to the 15th Finance Commission for the period 2021-22 to 2025-26 for the health sector, only Rs. 1,06,606 crore had been given to the health sector.

The Additional Secretary of Health pointed it out before the Committee that the need for more investment in the health sector lies in several factors including- an excellent benefit to cost ratio (10:1), millions of job opportunities especially for women, among others.

Clarifying the increased Health outlay (from Rs. 94,452 crore in 2020-21 to Rs. 2,23,846 crore in 2021-22) the Additional Health Secretary pointed out the increased estimates for Nutrition, safe drinking water and sanitation.

After taking note of all these facts, the Parliamentary Committee agreed that "Nutrition, safe drinking water and clean sanitary conditions are fundamental in paving the way towards holistic health. The Government in encompassing all these parameters under the head, "Health and WellBeing" has attempted to adopt the much needed multi-sectoral approach to health."

However, the Committee observed that the 137 percent increase in the health outlay from Rs. 94,452 crore in 2020- 21 to Rs. 2,23,846 crore in 2021-22 did not compensate the inadequate funds allocated to both the Departments of Ministry of Health and Family Welfare and the Ministry of AYUSH.

In fact, the Committee noted that Rs. 2,23,846 crore outlay on Health and Well Being included the budget for the Department of Health and Family Welfare, Department of Health Research, Department of Drinking-Water & Sanitation, Ministry of AYUSH, Package for Vaccination, Nutrition and Finance Commission(FC) Grants for Water and Sanitation and FC Grants for Health. Thus effectively, the budgetary allocation for health was just 32 percent of the much-hyped Rs. 2,23,846 crore funds.

Expressing serious displeasure over the figures of budgetary allocation and projected demands, the Committee noted that "even after its persistent recommendations in its previous Reports, the budget allocated to the Department of Health and Family Welfare has not been as per its projected demand."

The Health and Family Welfare department has only been allocated Rs. 71,268.77 in BE 2021-22, contrary to its projected demands of Rs. 1,21,889.55 crores. So, the allocated amount has only been 58.48 percent of its projected demand, leading to a shortfall of Rs. 50,620.78 crores.

Also, the earmarked allocation is also not in consonance with the proposal of Rs. 5,97,906.56 Crore submitted to the 15th Finance Commission for the period 2021-22 to 2025-26 for the health sector.

Keeping all these factors in mind, the Committee opined that, "such a huge shortfall in budgetary allocation will hamper the scaling up of various healthcare Schemes and robust implementation of the Ministry's initiatives and programs." Thus, the Parliamentary Committee recommended the Ministry to address the shortfall of funds and seek additional funds from the Ministry of Finance at the RE stage.

Finally, understanding the urgent need for massive investment in the healthcare sector, the Committee observed, "The Covid pandemic clearly exposed the fragility and inadequacy of healthcare infrastructure. The Committee strongly believes that the healthcare infrastructure should be capable of not only providing smooth, accessible and affordable healthcare services to its citizens but also aim towards financial protection against sudden medical emergencies. This can only be made possible with strengthening of the public sector infrastructure coupled with achievement of human resource for health."

Thus, the Committee, in its report, strongly advocated for "a substantial increase in the health budget and strongly recommends the Government to increase its health expenditure to 2.5 % of GDP in the next two years and to 5% by 2025."