Budget 2022: Can the finance minister solve India's health challenges?

The annual ritual of scanning the Union Budget for signs of encouragement to the health sector unfailingly results in disappointment. While the telehealth programme for mental health, and allocation for anganwadi centres announced in the FY23 Budget are welcome, they are relatively minor tactical approaches compared to the grand vision and strategy for health that the country urgently needs. Before we sink into depression at another disappointing year of low government health spending, we must consider the following.  

First, the pandemic notwithstanding, or perhaps because of the Covid-19 pandemic, the fiscal space for health is small. The country has incurred a large unplanned and unavoidable expenditure on Covid-19 vaccination. Key priorities including of national defence, education and subsidies cannot be set aside overnight. Perhaps increases in taxes on tobacco to achieve improvements in health on non-communicable diseases were feasible, the finance ministry may have judged that it has little room to manoeuvre in a fragile economy. 

Second, the Union government only bears a third of total public health expenditures, and about 8 per cent of overall health spending.  States collectively spend twice as much on health as the Union government, and that is where the real action lies. The significant divergence in health spending across states is one reason for the large variations in health outcomes nationwide.  Allocations to health by states like Uttar Pradesh and Bihar have greater bearing on the health of the average Indian than the Union Budget. 

Third, it is unlikely that one year’s budgetary allocation to health can make a difference, without a long-term plan for deployment. Thus far, that vision has not been forthcoming from this government, and where it has been articulated, has not been followed up with long-term commitments of investment with much specificity. The much-vaunted health and wellness centres remain a distant dream. Health insurance cannot be a substitute for universal health coverage. 

Investments in health are important at two levels. First, expenditures on maternal and child health, and nutrition can pay off in terms of a more capable workforce. Early investments in these areas improve cognitive ability and therefore, the capacity to acquire skills and education.  Second, investments in health provide financial risk protection to the population.  Nowhere is this need greater than in India, where health expenditures are the number one reason for families to go into poverty, as has been particularly visible during the Covid pandemic. 

The window of opportunity to implement a grand plan for health is small. The 26 million children born in India each year represent the largest numbers of new citizens to any country in any point in human history. Without key investments early in their lives, we doom them to a future where they will be unable to compete globally for jobs and add to the unemployed masses. Any business owner in the country knows that there are jobs aplenty -- it is the quality of labour that is available to fill these positions that is in shortage and that quality of human capital gets built early in life.  
 

Bemoaning the gap between the finance minister’s commitment and the arbitrary benchmark of 2.5 to 3 per cent of GDP spending on health misses a key point. Without a sustained 20-year plan to enable the country to reach critical milestones on infant mortality (rates of which in some of the largest states in the country are comparable to those of sub-Saharan Africa), nutrition (India has high stunting and anaemia rates compared to other similar countries), child immunisation coverage (India lags neighbours like Bangladesh and Nepal), and reductions in both infectious diseases (India has high rates of tuberculosis, malaria, and antimicrobial resistance), and non-communicable diseases (rates of diabetes and obesity are high and rising), a simple annual budgetary commitment is inadequate.  

India aims to compete with the leading countries of Asia in terms of economic growth. China’s singular achievement of pulling hundreds of millions out of poverty was based on an ambitious plan and commensurate investments made in health and education 50 years ago, that were then leveraged by a deregulated economy. The National Health Mission was the equivalent in India but has lost steam. 

History shows that the country can achieve ambitious targets in health. It may be time for an annual health and education special session in Parliament, with all the pomp and ceremony of the Annual Budget. The annual plan could be presented jointly by the honourable ministers of finance, health, and education -- the country’s health is too important to be left to the finance minister alone. By separating health budgets from the broader work of investing in health, the government could demonstrate India’s seriousness to improve the quality of capital of its most plentiful and valuable resource – its citizens. 

The writer is senior research scholar at Princeton University and affiliate professor of global health at the University of Washington