Prime Minister Modi is looking at massive spending cuts in his National Health Assurance Mission, as the program costs Rs.1.16 lakh crore for 5 years.

The Modi government’s first full-year Budget, announced in February 2015 by Finance Minister Arun Jaitley, had increased infrastructure spending, leaving less federal funding immediately available for social sectors. "The constraint on India’s financial resources was conveyed to health officials, and even to those from other ministries," said one government official who is not from the health ministry but attended the meeting where Modi was present.
Modi’s election manifesto had said that previous public health schemes had been mired in payment delays and could not meet the growing medical needs of the public. Still, he has another four years left in his first term to fulfill the promise.
India spends just about 1% of its gross domestic product (GDP) on public health, but even those funds are not fully utilized in the badly-managed public health system. A health ministry vision document in December 2014 had proposed raising spending to 2.5% of GDP in public health but did not specify a time period. That’s why health experts were disappointed when the Union Budget for 2015-16 raised the allocation only by about 2 percent from the previous year, less than inflation.
This lowered prospects for the massive health plan, they said. "How can it happen when you have truncated resources?" a health ministry official asked.
An expert panel along with an expert from the World Bank, in consultation with Modi’s office, had drafted the health plan. It included insurance that covered serious ailments and treatment such as heart surgeries and organ failure, although two officials felt that this benefit would soon be withdrawn. The new ministry couldn’t answer why this new plan could not be combined with existing health schemes.
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Source: Aditya Kalra
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