A Quick Take: Healthcare in the Union Budget

Written by Himani Rathore

February 01, 2021 | Christina A. D’souza

As a friend of mine once pointed out, ‘vital statistics’ often hide more than they reveal.

A first look at the numbers in the Union Budget for 2021–22 (FY22) show a big number for health spending. In her speech, Finance Minister Nirmala Sitharaman said that her Budget more than doubled ‘health’ spending from INR 94,452 crore in FY21 to INR 2,23,846 crore for FY22 — an increase of 137 per cent.

However, all big numbers need a closer look.

When she presented her last Budget exactly a year ago, that INR 94,452 crore included INR 25,218 crore for water and sanitation, and nutrition. The amount of money allocated for healthcare — via the Ministry of Health & Family Welfare (MoHFW) — was INR 65,012 crore plus another INR 4,222 crore for Health Research and AYUSH (which has a separate Ministry).

So, the actual amount to look at is INR 65,012 crore.

Then came the pandemic; COVID-19 and related costs increased the estimated final healthcare spending for FY21 to INR 78,866 crore.

When we look at the FY22 Budget the Finance Minister presented this morning, let’s compare apples to apples.

Of the INR 2,23,846 crore mentioned by the Finance Minister, INR 60,030 crore is for water and sanitation, and another Rs 2,700 crore for nutrition. An additional INR 36,022 crore is a Finance Commission (FC) grant for water and sanitation; INR 13,192 crore is another FC grant for health. These FC grants go to agencies and municipal corporations in states to make up any shortfall in their budgets.

In other words, INR 49,214 crore is a transfer to states.

That leaves INR 71,269 crores for the MoHFW (and INR 2,663 crore for Health Research plus INR 2970 crore for AYUSH).

Compared to the amount included in the FY21 Budget (INR 65,012 crore) the increase is 9.6 per cent — which is very far from an increase of 137 per cent!

But hold on.

There is one more number that isn’t included in the MoHFW Budget, but definitely included as health expenditure:

INR 35,000 crore for the COVID-19 vaccination programme.

Now let’s compare the total — INR 106,269 crore for FY22 — to the estimated INR 78,866 crore cited in the second paragraph above, that will be spent by March 31 this year (for the FY21 Budget).

The increase is almost 35 per cent.

That comparison is fairer; but COVID-19 is an extraordinary, one-time pandemic event.

The Finance Minister’s speech had one more vaccine announcement: that the pneumococcal vaccine programme would be extended nation-wide from the five states currently in the programme.

Well, this was just a glimpse to stimulate your thoughts!

Look at Annexure 1 to the Budget Speech for these numbers and the Ministry-wise statement estimates that are part of the Budget documents (pages 155–164). In case you don’t find it, let me know, and I will share the document with you!

The numbers are a matter of simple arithmetic that can enable you to compare apples to apples. Because an apple a day…


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