Health Budget FY 2025

Budget Financial Year 2025 – Some discussions

It took me some time to understand a few details of the budget which has been placed before the parliament by our Honourable Finance Minister, Ms. Nirmala Sitharaman on the 23rd of July 2024. The major talking point of this budget is the huge allocations made to Andhra Pradesh and Bihar, though they have been denied the special status. The opposition calls it “Kursi Bachao Budget” as the stability of this NDA government is overtly dependent on the ruling parties of these 2 states. This might be a political compulsion and a reality; I am happy for these states and sincerely wish they prosper with such generous allocations. Of course, oversized allocation to a few will always deprive many as we, like all other countries, have finite resources. Thus, there are several states crying foul due to unfair distribution going against them. Be that as it may, the political leaders will fight it out on the floor and the fields, I shall confine my discussions on subjects that matter most to me. A disclaimer, I am no way an economist and thus am subject to corrections by the experts. I shall try to delve into the health budget only.

Health Budget

Building a healthy nation is one of the topmost priorities of any government. In our case, unfortunately, health has never seen a great priority in the budget allocations mainly because a significant part of our healthcare is driven by private enterprises and thus are out of pocket. Though our health insurance is on a rapid growth, a large part of our health expenses is out of pocket. One might be shocked to learn that about 100 million (7% of our population) people are pushed into poverty every year due to healthcare expenses (Report by Niti Aayog). Thus, health should be a focus area for any government, after all a healthy nation is a wealthy nation.

The allocation to health care for the financial year is INR 910 billion (approximately) which is less than 2% of the total budgeted expenses for the year and, as a percentage, few points lower than the previous year’s allocation. This, in my views, is hopeless as the health care requires a lot more importance.

The health of the aging population and the consequent higher expenses is also a concern. A part of the pre-poll promise, the BJP had spoken of covering all the people above 70 years of age under the Ayushman Bharat scheme (PM-JAY). We do not find any mention of this in the budget.

I have 3 points to put before the experts and then the government, as follows:

1.????? The government should focus and strengthen the infrastructure and resources in preventive and primary health care. For the next 10 years (till our resources are further strengthened) the tertiary care should be left to the private enterprises with some additional measures to make it affordable.

2.????? We all know that diseases like cancer and rare diseases require extremely expensive treatment and thus becomes unaffordable not only for the poor but also for the middle class. But we also know that these diseases are much less prevalent. Cancer incidence (new cases) in India is 1.4 million cases a year which is 0.1% of the population. Thus, there must be an universal cancer care coverage by the government who can avail the treatment at any centre of their choice. Vaccines are available for cervical cancer which is one of the biggest killers in women. Our governments (both at the centre and the states) must push vaccination against cervical cancer, for the eligible group, aggressively. This should be free and will yield not only to cervical cancer free India but also a lot less burden on the exchequer in the course of time. Another case in point is oral and head & neck cancers. A ban on chewing tobacco is a need and that would reduce the number significantly in the years ahead.

3.????? The Universal Health Cover like the PM-JAY or the state sponsored health covers must be made universal. I am sure of that the PSUs and the private insurers will enthusiastically participate in such schemes.

A few concessions on a few drugs will not help. The 3 drugs that are given exemption from Basic Customs Duty (BCD) will lower their prices by a certain percentage. But let us all realise that these are not basic drugs for cancer treatment and are very expensive ones used only in the 2nd or 3rd line of treatment. The exemption is welcome, but this won’t help as the audience is small and the impact isn’t significant. I would strongly recommend exemption of GST from all drugs used to treat cancer and rare diseases.

The government has brought almost all the drugs for cancer treatment under price control, thereby reducing the margins of the manufacturers and supply chain. Now government must forego the GST of such drugs.

Thank you