Those at the helm of policymaking in the country have been, for some time, strongly advocating austerity as the principle for public expenditure policies, particularly for the social sectors.

Arvind Panagariya, the vice-chairperson of the NITI Aayog, suggests that “for just three-quarters of a per cent of the GDP”, 0.76 per cent to be precise, “the government can provide at least a modest healthcare cover for the bottom half of the population” after which “there does not remain a case for additionally free provision of the service by the government”.

Such perceptions form the basis of an alternative for an eventual obliteration of the public services and in the process, lowering further the already low public spending in health.

The budgetary allocation for health and allied reveals a much wider hold of such perceptions as articulated by Panagariya.

The stage is set for a more concerted effort in that direction. This is not surprising as the word ‘subsidy’ has been given a negative connotation when to the poor but when offered to the medical industry it becomes an ‘investment’.

Misplaced priorities The projected 13 per cent increase of total allocation on health for 2016-17 over previous year’s spending of ₹33,841 crore amounts to a nominal increase by ₹4,365 crore.

Using CPI-IW as deflator and assuming that inflation will stay at this year’s rate of 5.9 per cent, we estimate in real terms an erosion of ₹2,000 crore. So, in real terms, the increase in 2016-17 amounts to a mere 6.6 per cent.

This is especially meagre if we consider the fact that last year’s health expenditure (revised estimates) had declined in real terms from actual spending of 2014-15. In proportion to GDP, this year’s total allocation on health has reduced to 0.254 per cent compared to actual spending of 0.256 per cent in 2014-15.

There are serious issues of misplaced priorities as well within the health budget itself. To illustrate this, we look at the budget in real terms (estimating expenditures at 2016-17 projected prices for previous years), as well as the proportion of different components within the health budget.

While drawing comparisons with the previous years, we are careful of the rearrangements and re-classification of budget heads for this year.

One of the major concerns is the gradual weakening of the National Health Mission (NHM) whose main components are public health care infrastructure other than tertiary care, programmes for prevention of communicable diseases like TB, vector-borne diseases, etc. The share of NHM in total health budget has been gradually reduced during the last three years from 56.2 per cent in 2014-15 to 54.1 per cent in 2015-16 to this year’s allocation of 49.8 per cent.

There is a consistent decline in real terms as well. With a 5.9 per cent inflation rate, expenditure of 2015-16 in real terms had declined from 2014-15 levels and there is a further reduction of allocation now (assuming same level of inflation) in NHM for 2016-17.

Another significant reduction is in Family Welfare Scheme whose allocation this year is less than half of 2015-16 expenditures or less than one-third of expenditures in 2014-15. The budget is primarily for promoting, procuring and distributing contraceptives and other materials and for information, education and communication (IEC).

Where’s welfare? It is evident from the tragic deaths of women in Bilaspur sterilisation camp in November 2015 (in a private set-up), that the IEC without infrastructure and welfare services means nothing. The maternal health and welfare component of family welfare has borne the brunt of cuts. Thus, instead of welfare, the budget is tuned to population control!

Medical care institutions, primarily in the tertiary care sector, see a boost of 18 per cent over 2015-16 at the cost of primary and secondary healthcare institutions. The majority of the population lags in access at that level. What this policy programming indicates is that while the majority of the population has been left to its own devices, the state has become a protector of the medico-industrial complex catering only to the rich.

Allocation on insurance — CGHS and RSBY/RSSY — has increased to 9.5 per cent of total allocation on health from 7.3 per cent of expenditure in 2014-15. Health insurance for protection from catastrophic expenditures, splitting financing and provisioning into public and private, cannot be a substitute to a well functioning state-run public health-care system. Splintered state-led insurance run by private providers and insurance companies are pushing up costs.

Allocation in human resources in health and medical education — which is for establishing new medical colleges (by upgrading district hospitals), upgrading/strengthening of nursing services, pharmacy schools/college, paramedical institutions etc, is another grey area. There is a sharp increase in allocation compared to the previous years.

However, given the acute shortage of healthcare personnel, an allocation of ₹600 crore is still meagre. Second, given the emphasis on medical care, especially tertiary care, it is doubtful how much of it will go to training primary level workers. Allocation in health research has increased by 6.8 per cent in real terms but the total allocation of ₹1,145 crore is inadequate to expand research into critical areas of public health.

Neglect of allied sectors People’s health is dependent upon allocation of allied sectors such as food subsidy and ICDS, and these have declined in real terms. Water and sanitation, which had faced significant budget cuts in 2015-16, have been allocated just the amount incurred as expenditure for 2014-15 in real terms. Allocation in MGNREGS — an important scheme to boost rural employment and wages — has also declined in real terms from the revised estimates of expenditure for 2015-16, even without considering the ₹6,000-crore pending payments. As a percentage of GDP, allocation in food subsidy, MGNREGS and ICDS have declined compared to 2015-16 and 2014-15, while that of water and sanitation have reduced vis-à-vis 2014-15.

This budget, thus, is not only about rearranging subheads to inflate and deflate allocations without an overhaul of public expenditure in health, it is also about transforming the core of public health and health sector planning.

Mere reallocation of resources from the primary care sector to the tertiary with paltry health coverage for a small section of the population through health insurance is grossly inadequate. The substance of the latest Budget for health is that it promotes not universal health coverage but the medical care market.

Qadeer headed the department of social medicine and community health at JNU and is visiting faculty at the Council for Social Development (CSD); Ghosh is a research consultant with CSD

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