Pandemic impact: Health Ministry hikes fund requirement to ₹6.04 lakh crore

Our Bureau New Delhi | Updated on July 13, 2020 Published on July 13, 2020

Health Minister Harsh Vardhan   -  THE HINDU

Finance panel holds meeting with Health Minister

In the light of the pandemic, the Ministry of Health and Family Welfare has revised its fund requirements to ₹6.04 lakh crore during the period of 2021-22 to 2025-26.

The Ministry has submitted a revised proposal for fund requirement to the Finance Commission from the earlier demand of ₹4.99-lakh crore.

It has identified new areas for support which include urban health, essential medicines, Diplomate of National Board (DNB) courses and post-Covid health sector reforms.

The 15th Finance Commission held a meeting with the Union Minister for Health and Family Welfare, Harsh Vardhan and senior officials of the Health Ministry on Monday to revise State specific proposals of the Ministry to fight the pandemic.

The Commission is also exploring the possibility of back loading to ease the fiscal stress.

Chapter on Health

Chairman of the Commission NK Singh stated that looking at the peculiar state of the pandemic, the Commission has decided to have a separate Chapter on Health in its final Report to the Government. The Commission sought the Health Ministry’s views regarding the central government outlays, sector specific initiatives based on conditionalities and how the money set apart for the third tier could be assigned for health infrastructure.

“The pandemic has established the importance of the need to strengthen the public health sector, surveillance and public health management, preventive and promotive health care with special focus on urban health. MoHFW also felt that there was a need to increase the allocation of MoHFW on a year to year basis,” Harsh Vardhan has stated to the commission.

The Health Ministry told the Commission that the National Health Policy (NHP) 2017 targets include increasing public health expenditure to 2.5 per cent of Gross Domestic Product (GDP), in a progressive manner, by 2025.

It also said primary health expenditure should be two-thirds of the total health expenditure. The policy also asks for an increase in state sector health spending to more than 8 per cent of its budget by 2020. The Ministry said that presently 35 per cent of the public health expenditure is done by the Centre and the balance by States.

The Health Ministry has asked for additional resources to the tune of 0.4 per cent of GDP per annum to the States which they felt would lead to significant progress towards achievement of the National Health Policy target.

For performance based incentives, the Health Ministry has proposed a composite health index to encourage States to improve performance on a year-on-year basis. It should have a weightage of 20 per cent in the performance linked pool.

It also sought State specific funds for setting up medical colleges attached with district hospitals.

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Published on July 13, 2020
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