Budget for Health Sector Highlights: Finance Minister Nirmala Sitharaman tabled the Union Budget 2024-25 today. Although, the industry leaders were expecting major announcements for the healthcare sector, nothing significant proposals were made.
However, Finance Minister Sitharaman proposed to completely exempt three major cancer medicines from basic custom duty. She also proposed exemption of customs duty on components of Xray tubes and digital detectors.
During the Interim Budget 2024, Sitharaman announced various programmes on healthcare, pharmaceuticals and medical devices segments.
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Budget 2024 Allocation for Healthcare Sector
The Union Health Ministry has been allocated Rs 90,658.63 crore in the interim Budget for 2024-2025. The Ministry has witnessed a hike of 12.59 per cent over 80,517.62 crore in the Budget (revised estimates) for 2023-2024.
Union Budget For Health Care Sector 2024 Highlights: Stay connected with us here for real-time updates on all updates from the Union Budget 2024 for the healthcare sector:
Following Nirmala Sitharaman’s Union Budget 2024 speech, Preetha Reddy, the executive vice chairperson at Apollo Hospitals said: “While there is a bit of a disappointment that there was no big announcement for building the healthcare sector, it is heartening to note the emphasis on youth and on employment generation.”
Read more | 'Focus on youth and skilling apt and timely but health and research need fillip too'
Finance Minister Nirmala Sitharaman has proposed to remove the custom duties for these medicines, Trastuzumab Deruxtecan, Osimertinib and Durvalumab, from 10 percent to nil. Read on to know all about these cancer drugs and the impact of custom duty exemptions.
The Health Ministry has been allocated Rs 90958.63 crore in the Union Budget 2024-25. The Ministry has witnessed a hike of 12.9 per cent over 80,517.62 crore in the Budget (revised estimates) for 2023-2024.
Out of Rs 90958.63 crore, the Department of Health and Family Welfare has been allocated Rs. 87656.90 crore and the Department of Health Research has been allocated Rs. 3301.73 crore.
READ MORE | Budget 2024: At Rs 90,958.63 crore health ministry’s allocation sees surge of nearly 13 per cent from FY24
The 75th Round of the National Sample Survey revealed that there is a significant gap in out-of-pocket treatment costs between the private and public sectors. In 2017-18, the average medical cost of hospitalisation was Rs 4,452 in government hospitals and Rs 31,845 in private hospitals. In rural areas, the average out-of-pocket cost for non-childbirth hospitalisations was Rs 4,290 in government hospitals and Rs 27347 in private hospitals. These figures are higher in urban areas, with an average cost of Rs 4,837 in government hospitals and Rs 38,822 in private hospitals. Individuals also fund health expenditures through borrowings. The survey shows that 13.4% of the hospitalisation cases in rural areas and 8.5% in urban areas were financed by individuals through borrowings.
In India, healthcare is paid for by the government at the central and state level, charitable institutions, or by individuals themselves. In India, the share of expenditure by individuals (also known as out-of-pocket expenditure or OOPE) is high as compared to other countries. The lack of public investment in healthcare has led to dependence on private healthcare providers, which are typically more expensive. While OOPE in India has declined from 64.2% of the total health expenditure in 2014 to 48.2% in 2019, it is still fairly high. The Standing Committee (2022-23) on Health and Family Welfare noted that India ranks 176 out of 196 countries in terms of the percentage of current health expenditure spent out of pocket.
Finance Minister Nirmala Sitharaman also proposed changes in the basic customs duty for X-ray tubes and Flat panel detectors for use in medical X-ray machines under the phased manufacturing programme to synchronise them to domestic capacity addition.
During her Union Budget 2024 speech on Tuesday, Finance Minister Nirmala Sitharaman proposed that three cancer treatment medicines be exempted from basic customs duty completely.
Finance Minister Nirmala Sitharaman tables the Union Budget 2024-25 in the parliament.
Finance Minister Nirmala Sitharaman will shortly announce the Union Budget 2024-25.
There is an urgent need to increase investments in primary healthcare to improve health outcomes. Schemes such as the NHM have set targets for these indicators such as Infant Mortality Rate (IMR) and the prevalence of anaemia. According to PRS analysis, data indicates that these targets are yet to be achieved. IMR is the number of deaths of infants (less than a year in age) that occur per 1000 live births. IMR provides a crude metric for the effectiveness of a healthcare system in a given population. The NHM has set a target for IMR of less than 25 per 1000 live births. As per the latest data from the Sample Registration System (2020), IMR in India is estimated to be 28 per 1000 live births.
Anaemia among women is a key indicator of nutrition and health since it can have significant adverse health consequences for both women and children, but can be addressed via primary care. NFHS 2019-21 reveals that 53% of women between ages 15 and 49 have anaemia, much higher than the global rate of 30% for this age bracket.
In March 2022, the Standing Committee on Health and Family Welfare recommended increasing allocation towards the NHM given its high rate of utilisation and considering its importance in increasing access to primary healthcare. The Committee recommended substantially increasing allocations at the revised estimates stage of 2022-23. However, as per the revised estimates for 2022-23, the allocation has been increased by a mere 0.4% (Rs 29,085 crore). In the context of projected 6.4% real GDP growth, this is effectively a decline in expenditure. 76% of this amount has been allocated towards the Flexible Pool for RCH & Health System Strengthening under both NRHM and NUHM (Rs 22,095 crore). 23% is allocated for infrastructure maintenance (Rs 6,798 crore).
Primary healthcare is provided by states through a three-tiered system, consisting of Sub-Centres (SCs), Primary Healthcare Centres (PHCs), and Community Healthcare Centres (CHCs). As of March 31, 2022, there were 1,61,829 SCs, 31,053 PHCs, and 6,064 CHCs across India. 16 Each tier is subject to upper thresholds for population coverage as per the Indian Public Health Standards (IPHS), 2022. As per the Rural Health Statistics 2021-22, while the population covered by the SCs centres has improved, it worsened in PHCs and CHCs. The numbers of all three types of centres that are currently operational fall short of targets based on these thresholds; SCs have a shortfall of 25%, PHCs of 31%, and CHCs of 36%. While the number of centres has increased, this increase has not kept pace with projected population growth, PRS analysis found.
Insufficient investment in public health infrastructure can have negative consequences on access to healthcare, and consequently, on health indicators, PRS report reveals. The National Health Policy, 2017 proposed that the overall government expenditure on public health (central and governments combined) should be at 2.5% of GDP. As per the Economic Survey 2022-23, the overall public health expenditure was at 1.6% of GDP in 2020-21 (actuals) and estimated at 2.1% of GDP in 2022-23 (BE).
As per the National Health Accounts, in 2018-19, 4.8% of the expenditure of the general government (total of central and state governments) was allocated towards healthcare. According to the World Health Organization (WHO, India’s allocation towards health in 2018-19 was low compared to other countries such as Malaysia (8.5%), Russia (10.2%), Brazil (10.5%), and South Africa (15.3%). This figure is much higher in developed economies, such as the United Kingdom (19.7%), the United States of America (22.4%), and Germany (20.1%).
The estimated expenditure of the Department of Health and Family Welfare in 2023-24 is Rs 86,175 crore, approximately 2% of total central government expenditure for 2023-24. This is an increase of 13% over the revised estimates for 2022-23.
According to an analysis by PRS India, allocation towards PM ABHIM, which seeks to create primary health infrastructure, increased from Rs 1,885 crore in 2022-23 RE to Rs 4,200 crore in 2023-24 BE (an increase of 123%).
Meanwhile, PMSSY is a scheme for the establishment of new AIIMS and the upgrading of Government Medical Colleges across states. Allocation for PMSSY has is Rs 3,365 crore in 2023-24 BE. In addition, a head has been created for new AIIMS, under which Rs 6,835 crore has been allocated. Together, they amount to a total of Rs 10,200 crore. This is a 23% increase from revised estimates for 2022,23 (Rs 8,270 crore). Expenditure towards COVID-19-related measures under the Department of Health and Family Welfare has been reduced from Rs 16,445 crore in 2021-22 to Rs 497 crore in 2023-24 BE, the report revealed.
Between 2012-13 and 2023-24, allocation towards the Department of Health and Family Welfare has increased at an annual average rate of 12%. The allocation increased from Rs 25,133 crore in 2012-13 to Rs 86,175 crore in 2023-24, as per PRS India analysis. In 2023-24, 33% of the Ministry’s budget has been allocated towards the National Health Mission. The next highest allocation, at 19%, is towards the regulatory and autonomous bodies, at Rs 17,323 crore. Allocation towards the insurance scheme, PMJAY, is estimated at Rs 7,200 crore, which is 12% more than the revised estimate for 2022-23.
Low investment in primary healthcare is one of the key issues in the health sector of India. Consequently, there is inadequate health infrastructure including human resources, and slow improvement in key health indicators. Moreover, the lack of public healthcare infrastructure has led people to use private health services more, and that has increased the financial burden on citizens.
After the COVID-19 pandemic, it was evident that there are issues in the Indian public health system and the extent to which it can respond to public health crises. Where health refers to physical, mental, and social well-being, public health refers to the measures to maintain health at the scale of a society or state. In India, states are responsible for public health and sanitation, including hospitals and clinics. Interestingly, the Ministry is responsible for formulating policy for public health.
The health ministry also provides administrative and financial support to states to operate public health facilities and infrastructure, and to deal with specific health issues, such as maternal health and nutrition. It also establishes and runs medical Institutes of National Importance such as AIIMS as well as establishments in union territories including Delhi.
The budget allocation for centrally sponsored schemes has been increased from Rs 77,624.79 crore to Rs 87,656.90 crore. Among these centrally sponsored schemes, the budget allocation for the National Health Mission has been increased from Rs 31,550.87 crore in 2023-24 to Rs 31,967 crore in 2024-25 and the allocation for Pradhan Mantri Jan Arogya Yojna (PM-JAY) hiked from Rs 6,800 crore to Rs 7,500 crore. The allocation for National Digital Health Mission has been increased from Rs 200 crore to Rs 250 crore.
For the National Tele-Mental Health Programme, the Budget allocation has been increased from Rs 65 crore to Rs 100 crore. The allocation for autonomous bodies increased from Rs 17,250.90 crore in 2023-2024 to Rs 18,005.65 crore in 2024-25. Among the autonomous bodies, the allocation for AIIMS, New Delhi has been increased from Rs 4,278 crore to 4,523 crore. The allocation for the ICMR has been increased from 2295.12 crore to Rs 2432.13 crore.
In FY2023-24, the expenditure of the Ministry of Health and Family Welfare was estimated to be Rs 89,155 crore, a 13 percent increase from revised estimates for 2022-23. The National Health Mission is its largest component, accounting for 33 percent of the Ministry’s budget, and medical colleges and hospitals account for 27 percent of the budget. High out-of-pocket expenditures and a shortage of healthcare personnel continues to be major issues.
During her interim budget speech in February 2024, Sitharaman announced that healthcare cover under the Ayushman Bharat insurance scheme will be extended to all ASHA and anganwadi workers and helpers.
Sitharaman also said the government plans to set up more medical colleges by utilising existing hospital infrastructure and will form a committee to examine the issues and make relevant recommendations.
Additionally, various schemes for maternal and child healthcare will be brought under one comprehensive programme for synergy in implementation. The newly designed U-WIN platform for immunisation and intensified efforts of the Mission Indradhanush will be rolled out throughout the country.
Sitharaman also announced that the government will encourage vaccination for girls in the 9-14 year age group for the prevention of cervical cancer.
During the Interim Budget 2024, Sitharaman announced various programmes on healthcare, pharmaceuticals and medical devices segments. The Union Health Ministry was been allocated Rs 90,658.63 crore in the interim Budget for 2024-2025. Out of Rs 90,658.63 crore, Rs 87,656.90 crore has been allocated to the Department of Health and Family Welfare while Rs 3001.73 crore to the Department of Health Research. The Budget allocation for the AYUSH ministry has been hiked from Rs 3,000 crore to Rs 3,712.49 crore, recording a 23.74 per cent increase.
Finance Minister Nirmala Sitharaman will table the Union Budget 2024-25 at 11 am today. Infrastructure development will be one of the key focal areas in Sitharaman’s Budget speech, alongside critical sectors such as aviation and roadways. Stay tuned to all the latest updates from the infrastructure sector!
Good morning! Welcome to our live coverage of the Union Budget 2024-25 for Healthcare. The Finance Minister Nirmala Sitharaman will table the Budget at 11 am. Here we will provide all the latest happenings from the healthcare announcements of the Union Budget 2024-25 that will unfold today. Stay tuned to get all updates.
According to a Niti Aayog report, several factors are driving the growth of the Indian healthcare sector including an aging population, a growing middle class, the rising proportion of lifestyle diseases, an increased emphasis on public-private partnerships as well as accelerated adoption of digital technologies, including telemedicine, besides heightened interest from investors and increased FDI inflows over the last two decades.
