Economy

‘2.5% of GDP on health spend is a realistic target’

Our Bureau New Delhi | Updated on January 15, 2018 Published on March 16, 2017

Health Minister JP Nadda said Uttar Pradesh had recenlty returned Rs 1,500 crore of unutilised funds

health eps

Existing budget on health is not being fully utilised, says Health Minister Nadda

The government is not prepared for increasing health expenditure in tandem with trends in other developing and developed countries where spending is around 4-5 per cent of the GDP.

While addressing the media on Thursday, a day after the Cabinet gave a nod to the National Health Policy (NHP) 2017, JP Nadda, Minister of Health and Family Welfare, said there was a problem of fully utilising even the existing budget.

India fares among the worst in terms of spending on healthcare which currently stands at around one per cent of the GDP.

The new NHP 2017 seeks to increase this spending to around 2.5 per cent of the GDP. The target set by the last NHP in 2002 of raising the expenditure to 2 per cent of the GDP has not been met even 15 years later.

Despite massive infrastructure needs and resource crunch, both admitted to by government officials, the country is failing to utilise the health budget. Nadda said Uttar Pradesh had recently returned over ₹1,500 crore of the unutilised funds.

The target of 2.5 per cent, to be achieved by 2025, is a more “realistic” target, Nadda said.

CK Mishra, Secretary, Ministry of Health, also added to achieve the target of 2.5 per cent of the GDP, the health budget has to increase by about 20 per cent annually.

No health cess

However, surprisingly, the earlier proposal to introduce a health cess, which found a place in the draft documents, has now been done away with, the Minister said.

Under the draft it had been proposed that a health cess, similar to an education cess, would be introduced to generate funds from special commodity taxes such as on alcohol and tobacco.

It also proposed to raise funds from “extractive industries and development projects that result in displacement or those that have negative impacts on natural habitats.”

Yet, Nadda said, there was no need for any taxes and funds were easily available as the government and the Prime Minister wanted to focus on health.

The Minister also justified scrapping the earlier proposal to declare health a fundamental right asking “what if we are not able to provide the services”. If health was declared as a right, citizens would be able to take legal recourse in the event of not receiving adequate health services.

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Published on March 16, 2017
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