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An educated, healthy workforce is of crucial importance for any country that is aiming for sustained economic growth. In fact, empirical studies have shown that health improvements provide a significant boost to economic growth in developing countries.
It stands to reason then that health and education should top the agenda of the Modi government, which has promised to raise the pace of India’s economic growth to 7-8% in three to four years from less than 5% now.
In light of this fact, the lack of concrete measures for the healthcare sector in Finance Minister Arun Jaitely’s maiden budget speech was disappointing to say the least.
What disheartened me more was the fact that there was nothing in Mr. Jaitley’s speech that lived up to the BJP’s pre-election promise of introducing “radical reforms” in healthcare.
The BJP’s election manifesto had promised to address the ‘Right to Health’ through an ambitious universal healthcare program based on affordability and accessibility.
The free drugs and diagnostics program, which Mr. Jaitely said will be pursued on a "priority basis", was an initiative the previous UPA government had announced way back in 2012.
If Mr. Jaitely had provided details on where the money for free drugs will come from and how the government will go about procuring the medicines, it would have signalled some progress on the long path to a universal healthcare system in the country.
The delivery of basic and quality healthcare to all its citizens is a responsibility that the Indian government can no longer shirk off. India is challenged with a rising disease burden as non-communicable diseases (NCDs) like diabetes, cancer, respiratory and cardiovascular diseases are on the rise. Today, 60% of deaths in India occur due to NCDs, according to the WHO.
India’s rate of public spending on health, 1.4% of gross domestic product, according to the government’s own estimates, is one of the lowest in the world and woefully inadequate to tackle the mounting healthcare challenges.
The government needs to increase public spending on healthcare to at least 3% of GDP in order to expand the healthcare budget, invest in creating new medical infrastructure, ramp up existing public health infrastructure and promote local manufacturing and research.
Here too Mr. Jaitely’s Budget disappointed. The FY15 budgetary outlay for healthcare at Rs 39,237.82 crore was a mere 5% increase from the Rs 37,330 crore the UPA government had earmarked for FY14.
The Finance Minister also made a financial commitment of Rs 500 crore to improve the healthcare system by setting up All India Institutes of Medical Sciences (AIIMS) in West Bengal, Andhra Pradesh, Uttar Pradesh and Maharashtra. Though well-intentioned in that it could help bridge the gap for qualified medical personnel in India, I feel the amount allocated is inadequate.
The minister also proposed to open 12 government medical colleges and 15 rural health research facilities, but failed to detail their cost or when they would be set up.
What was most baffling however was the move to withdraw an existing services tax exemption given to clinical research organisations that test drugs on human subjects. This is a cruel cut indeed for the clinical trials industry that is already reeling from the ongoing moratorium and regulatory uncertainty.
Going forward, I hope the Modi government will act quickly and decisively on the healthcare front because in the final analysis the wealth of nations depends on the health of its people.