Health Budget gets a Booster Shot, but Experts prescribe a Second Dose

By Arunima Rajan

Discover what industry leaders have to say about the impact of the Union Budget on the healthcare sector.

In a highly anticipated address to the nation on the first day of February, Finance Minister Nirmala Sitharaman unveiled the Union Budget for the upcoming fiscal year of 2023-24. Among the many initiatives and policy priorities detailed in her speech, one particular announcement stood out for its potential to transform the healthcare landscape in the country.

Medical Infrastructure

Specifically, the Minister outlined a plan to create 157 new nursing colleges close to the 157 medical colleges established since 2014. The objective? To expand access to quality healthcare for individuals and families across the length and breadth of the nation and to help address the longstanding gaps and disparities that have hampered progress in this crucial area.

13 % Hike in Budget Allocation for Health

The government has earmarked a staggering Rs 45,03,097 crore for the upcoming fiscal year, which represents a notable 7.5% increase from the revised estimate for 2022-23. Of particular interest to those in the healthcare sector is the allocation of INR 89,155 crore, which represents a 13% increase from the previous year's allocation of INR 79,145 crore.

Funding for Disease Control and Prevention

The government has also launched a mission to eradicate sickle cell anaemia by 2047. This ambitious effort seeks to address a longstanding public health challenge that has affected millions of Indians over the years. With the support of increased funding and resources, the hope is that this mission will help significantly reduce the disease burden and improve outcomes. Overall, the government's commitment to investing in healthcare is a welcome development and sure to positively impact the lives of millions of Indians in the years to come.

The plan will involve spreading awareness, conducting comprehensive screenings for seven crore individuals aged 0-40 in areas inhabited by tribes affected by the disease, and offering counselling services through the combined efforts of various central government departments and state governments.

The Union Health Minister, Mansukh Mandaviya, revealed that over 200 districts in India are susceptible to sickle cell anaemia. Tribals, particularly from Gujarat, Rajasthan, Jharkhand, Chhattisgarh, and Odisha, are highly vulnerable to the disease. As part of the campaign, he highlighted that massive awareness would be created, and universal screening of 7 crore individuals aged between 0 and 40 years will be conducted in affected tribal areas. The Central government will provide funds for the sickle cell elimination program under the National Health Mission, and state governments will share the funds on a 60:40 basis.

Funding for Medical Research

In addition, the Finance Minister also announced that facilities at selected ICMR laboratories will be accessible for research by public and private medical college faculty members and private sector R&D teams to foster collaborative research and innovation. The allocation for the AYUSH Ministry has experienced a significant 28% increase, rising from INR 2,845.75 crore to INR 3,647.50 crore.

Strategic prioritisation of R&D in AI = Tremendous potential for healthcare solutions?

In the Budget 2023 speech, Nirmala Sitharaman outlined her vision for India to become an AI leader. She proposed the establishment of three AI centres in top educational institutions, aiming to create an effective AI ecosystem and nurture quality human resources in the field. The National Informatics Centre (NIC) has already established a centre of excellence in AI. The government is also focusing on “making AI in India” and “making AI work for India”, and the centres will be partnered with leading industry players to conduct research in interdisciplinary ways to create applications and solutions.

In a speech at the International Engineering and Technology Fair organised by the Confederation of Indian Industry (CII), President Droupadi Murmu also highlighted that India is dedicated to broadening its global reach by leveraging its impressive manufacturing capabilities, highly skilled workforce, and mastery of advanced technologies. "India is committed to expanding its global footprint by drawing on its wealth of manufacturing experience, top-notch talent, and cutting-edge advanced technology expertise," remarked Murmu. She predicted that AI will have a revolutionary impact on healthcare, transforming it in ways we cannot even fathom.

Which Top Ministries are getting Big Allocation increases in 2023-2024?

In the budget allocation for 2023-24, the Ministry of Railways is leading the pack among the top 13 ministries with the highest allocations, with a remarkable 49% increase in its allocation. Following closely are the Ministry of Jal Shakti, with a 31% increase, and the Ministry of Road Transport and Highways, with a 25% increase.

The Department of Health and Family Welfare received INR 86,175 crore, while the Department of Health Research was allocated INR 2,980 crore. From the new fiscal year, the Pradhan Mantri Swasthya Suraksha Yojana will be split into two sub-schemes, the PMSSY and the establishment expenditure of 22 new AIIMS, for which INR 6.835 crore has been allocated.

The budget allocation for the Pradhan Mantri Swasthya Suraksha Yojana for 2023-2024 stands at INR 3,365 crore. Within the central sector schemes, the allocation for the National Health Mission has increased from INR 28.974.29 crore in 2022-23 to INR 29.085.26 crore in 2023-24, and the allocation for the Pradhan Mantri Jan Arogya Yojna has gone up from INR 6,412 crore to INR 7,200 crore.

The allocation for the National Digital Health Mission - NHM has also significantly increased, rising from INR 140 crore to INR 341.02 crore. Similarly, the National Tele Mental Health Programme allocation has been boosted from INR 121 crore to INR 133.73 crore.

The allocation for autonomous bodies has increased from INR 10,348.17 crore in 2022-23 to INR 17,322.55 crore in 2023-24. Among the autonomous bodies, the allocation for AIIMS, New Delhi, has been reduced from INR 4,400.24 crore to INR 4,134.67 crore. Finally, the allocation for ICMR has been increased from INR 2.116.73 crore to INR 2,359.58 crore.

Industry Insiders Weigh In on Initiatives in the Budget

Joy Chakraborty, the COO of P.D. Hinduja Hospital & Medical Research Centre in Mumbai highlighted the government's continued prioritisation of healthcare initiatives in recent union budgets. Nevertheless, Chakraborty noted that the overall allocation of around 2% of GDP towards healthcare is quite low. While this year's budget included an increase in healthcare allocation compared to the previous year, it may not be sufficient to meet the growing needs of India’s healthcare industry and patients. The addition of 157 new nursing colleges and the launch of multi-disciplinary courses for medical devices and centres of excellence for artificial intelligence are promising steps towards strengthening and upskilling the healthcare workforce. Chakraborty also emphasised the importance of upgrading existing nursing colleges. In addition, the new R&D program for pharma is expected to boost innovation in medical solutions in India and help reduce the cost of treatment. The government's focus on eliminating sickle cell anaemia is another welcome development. Despite these positive aspects, the healthcare industry had hoped for greater emphasis on preventive healthcare, such as increased tax exemptions and reduced taxes on healthcare services to improve access to quality healthcare. Overall, this year's budget, with its focus on medical education and public-private partnerships, prioritisation of R&D, and new-age technology, is a step in the right direction for the growth of the industry, according to Chakraborty.

In praise of the newly announced Budget 2023-24, Dr Amardeep Singh Kohli, CEO of PSRI Hospital in New Delhi, lauded it as both people-friendly and pro-development. Notably, the budget stood out for its keen focus on infrastructure development, green buildings, and environmental concerns. Additionally, the emphasis on research and development was a significant positive for the medical sector, including the establishment of 157 new nursing colleges, which will significantly contribute to its growth.

Dr Kohli further praised the increase in health expenditure to 2.1% of the GDP, which demonstrated the government's commitment to improving public health standards. The budget's ambitious goal of eradicating Sickle Cell Anaemia by 2027 was also a laudable effort, considering that roughly seven crore people across the country are currently affected by the disease. To that end, the budget also emphasises the importance of awareness and counselling in affected tribal areas. Finally, the medical research and pharmaceutical innovation sectors were recognized with special mentions in the budget.

Dr Prashanth Rajagopalan, Director of MGM Healthcare on the union budget, adds that it is heartening to note that the budget includes strategies for enhancing healthcare services that support the goal of developing a universal healthcare model. The pandemic has shown us the value of qualified paramedical experts. Thus, encouraging nursing education by establishing 157 new nursing colleges would help make high-quality treatment available to a larger population. The announcement on granting access to ICMR labs and other R&D facilities, as well as a collaborative approach to pharmaceutical research and encouragement of private sector investments, will undoubtedly make India a leader in vaccination and biomedical research. I support the mission to eliminate sickle cell anaemia by 2047 through public awareness campaigns and the universal screening of 7 crore people in the affected tribal areas; it is a great step to address the disease.

Rajnikanth Shah, Chairman of MedTech Life, expresses appreciation for the budget's focus on addressing gaps in healthcare, citing initiatives such as the opening of 157 nursing colleges to increase the availability of nurses. Shah also notes that dedicated courses on medical devices will help improve awareness and skills in their usage, and partnerships between industry players will foster innovation. The government's promotion of tourism may also enhance medical tourism and increase healthcare accessibility. Shah further highlights the budget's emphasis on research and development, innovation, and public-private partnerships as crucial steps towards improving the quality and value of healthcare. Overall, Shah is optimistic about the budget's potential to strengthen the Indian healthcare ecosystem and positively impact people's lives.

Economic Survey 2022-23 reveals a surge in the proportion of government health spending from 28.6% in FY14 to a commendable 40.6% in FY19. The report also shows that India is moving ever closer to achieving its Sustainable Development Goals, with improved schools and affordable healthcare playing a pivotal role in this positive trend. One of the most striking figures from the survey is the decline in out-of-pocket healthcare expenses as a percentage of total healthcare spending. This significant drop from 64.2% in FY14 to 48.2% in FY19 suggests that the government's efforts to make healthcare more affordable and accessible to all are bearing fruit. The survey also notes a marked increase in the share of healthcare spending out of the total expenditure on social services, rising from 21% in FY19 to 26% in FY23 (BE). This trend highlights the growing importance of public healthcare and social security in realising the goal of universal health coverage for all Indians.