Union Budget 2010–11: Impact on Health Care

The union budget, for the year 2010-11, was presented yesterday by the finance minister, Pranab Mukherjee.

As usual, it elicited mixed response -- there were those who endorsed the budget and there were the others who thought that a lot more could be done.

The present budget has its highs and lows, but what did it offer the health sector?

Highlights

This time the focus of the budget is on rural healthcare, with the fund allocations rising to a whopping 22,300 crores (Rs 223 billion/$4.82 billion) from 19,534 crores during the previous fiscal year. This escalation is in keeping with the evolving needs of the growing healthcare industry of the country.

The finance minister also said that there are plans to carry out a national annual survey to analyze the health profiles of the populace in the rural districts.

"The findings of the survey should be of immense benefit to major public health initiatives, particularly the National Rural Health Mission (NRHM), which has successfully addressed the gaps in the delivery of critical health services in rural areas," the FM said.

It may be noted that the NRHM, which has been regularly funded since 2005, was launched during the same year to tackle health inequalities in rural areas, especially in the 18 states with particularly poor health-related infrastructure.

The gist of the budget concerning the health sector are the following-

• Allocation of overall funds increased by Rs 2,770 crore;
• Annual surveys to prepare the health profile in rural districts 
• Assess expenditure carried out under National Rural Health Mission;
• Uniform / concessional basic duty of 5% for all medical appliances;
• Convergence of National Rural Employment Guarantee Act (NREGA) with wider health insurance coverage through Rashtriya Swasthya Bima Yojana (Health insurance for BPL families)
• Countervailing duty of 4% on all medical equipments, with full exemption from special additional duty

Commenting on the budget Rajen Padukone, CEO of Manipal Hospital, says  “Relaxation of FDI norms may see more international players coming in to India in the healthcare sector. Added to it, rationalisation of duties on medical equipment can make imports cheaper and can significantly lower healthcare costs in the country.”

Satish Reddy, MD of Dr. Reddy’s Laboratories, said the recent budget allocation was “a positive and encouraging move,” given the fact that India figured low on various health care indices.

The Lows

However the budget invoked disappointments too, as no announcement was made regarding the promotion or setting up of new hospitals.

Dr Vishal Bali, CEO, Fortis Hospital says,  “It is ironical that the budget provides for investment-linked deductions to the tourism sector but does not provide for any impetus for investments made in setting up new hospitals.” 

While commending the finance minister on pulling India out of the global crisis Prathap C Reddy, Chairman of Apollo Hospitals, said that India needs one lakh more hospital beds in the next decade .He also said that the government should do everything to promote investment in this sector besides promoting skill development of doctors, nurses and paramedical staff.

His daughter and MD of Apollo Hospitals, Preetha Reddy said that although the budget was a progressive one, promoting security and stability in the health sector, there was little done for the rationalization of corporate taxes, especially for green -field projects. She pointed out that she was also expecting a tax exemption for the education sector, especially teaching hospitals.

One cannot help but appreciate the finance minister for all the measures that he has taken to improve the nation’s healthcare system especially of the rural sector and for people below the poverty line. If the budget seems to have invoked a mixed response, however its share of disappointments, it is, overall, a promising one! Proper utilization of the funds allocated will be a big challenge. If one looks at the accounts statement of Government of India from last year the number of project on which no fund has been spent so far are innumerable. For example Rs.15 crores were allotted for Telemedicine – no money had been spent till Nov last year. Similarly the Transplant programme was allotted Rs.1 crore – this was not utilized either. The question one needs to address is –are there are no takers for these projects or is it the inertia on the part of the departments or is it lack of knowledge that these funds exists. No one has an answer to these questions.   

Ref-
http://www.mohfw.nic.in/Oct.2009/Data%20on%20Expenditure/
October%202009%20%28Actual%29%20Health.pdf.

Source-Medindia
Dr Reeja Tharu/S