Health Minister J.P. Nadda sought a "bare minimum" budget of nearly
$10 billion for 2018-19 - 33 percent higher than last year - in a
letter to the finance minister on Nov. 26, which Reuters has
reviewed.
Nadda argued the funds were needed for expanding vaccination
coverage and free drugs distribution, and also to ward off a growing
threat of non-communicable diseases, such as cancer and diabetes,
which killed 6 million people in India in 2016.
His request was not approved: the health budget is expected to rise
by 11 percent to $8.2 billion, three government officials told
Reuters. They declined to be named or be identified further as the
discussions were confidential.
Prime Minister Narendra Modi's government last year set a target of
raising annual health spending to 2.5 percent of India's GDP by
2025, from 1.15 percent now - one of the lowest proportions in the
world.
The health budget this year will put that pledge at risk.
"What's the point of having a (2025) GDP target? With this funding,
it still looks like a herculean task," said one of the officials
interviewed.
The finance ministry declined comment, while the health ministry did
not respond to requests seeking comment. The budget for the
financial year ending March 2019 will be presented on Feb. 1.
Shamika Ravi, a member of Modi's economic advisory council, said she
wasn't privy to the final budget numbers, but described a $8.2
billion annual health budget as "not sufficient".
"If we underspend on health, it will impact India's overall GDP by
lowering productivity in the long term," said Ravi, who is also a
research director at Brookings India.
Ravi however said she would continue to advise the government to
allocate more funds for healthcare to achieve its 2025 GDP target.
ECONOMY VS HEALTH
Last year, the government intensified efforts to overhaul the public
healthcare system. It capped prices of several medical devices to
help the poor, ramped up screening of non-communicable diseases and,
on top of that, also raised the federal health budget by more than a
quarter.
But the health budget increase for 2018-19 will be lower as the
government's finances are stretched by slowing economic growth and
tax collections that have lagged under a new sales tax regime, the
officials said.
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It was difficult to get the 11 percent hike approved, according to
one of the officials, who said that it took many rounds of
discussions between the health ministry and the finance ministry.
Initially, the finance ministry had earmarked only a five percent
increase in the budget, but that was increased after fresh
representations by the health ministry, the official said.
Collections under the new national goods and services tax system
stood at $12.6 billion in November, the lowest since its launch in
July, which finance officials say have upset the goverment's overall
revenues and their budget calculations.
In recent months, the finance ministry has said it wants to boost
spending on sectors such as infrastructure, including ports and
roads, to boost economic growth. That, along with the need to stick
to fiscal targets, means that the budget for other sectors will be
squeezed.
In his letter, Health Minister Nadda made a case for a significant
increase in his ministry's allocation, saying investments in public
health would eventually result in a "tenfold return for the
economy".
Low public health spending leads to "catastrophic" medical expenses
for people, he wrote.
India's overburdened health system remains plagued with an acute
shortage of government hospitals in rural areas. In 2016, more than
1 million children died before turning five, the highest number for
any nation in the world, a United Nations report said last year.
(Reporting by Aditya Kalra, additional reporting by Manoj Kumar;
Editing by Tom Lasseter and Raju Gopalakrishnan)
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