COVID-19 impact: Budget 2021 to see considerable increase in health sector allocation


As Finance Minister Nirmala Sitharaman is set to present Budget 2021 in the backdrop of COVID-19 pandemic, India’s combined public health expenditure would be increased to 2.5 percent of gross domestic product (GDP) by 2023-24 while the health outlay is set to see a considerable increase for FY22.

The 15th Finance Commission has recommended that India’s combined public health expenditure be increased to 2.5 percent of gross domestic product by 2023-24, nearly double of 1.26 percent health outlay by central and state governments in 2019-20, as per an assessment by Niti Aayog.

The Centre is also planning to considerably increase its own outlay in health for 2021-22, which would be separate from what the states would allot to the sector.

In its report for 2021-22 to 2024-25, the 15th Finance Commission has also likely recommended that governments move to a fiscal deficit target range rather than a fixed number, and the creation of a separate central cadre for doctors and medical professionals, to combat the issue of shortage of essential personnel.

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In Budget 2020-21, the central government made a total allocation of Rs 67,111.80 crore for the health sector, against Rs 64,559.12 crore in 2019-20 budget.

India ranks 184th out of 191 nations in terms of healthcare spending as percentage of GDP, as per the World Health Organization.

The one-time provisioning and additional expenditure on healthcare will impact the centre’s fiscal deficit. However, as FM Sitharaman has made it clear publicly, these considerations take a back seat compared to the need to ramp up public spending.

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Prime Minister Narendra Modi launched the vaccination drive with healthcare workers at the frontline of India’s COVID-19 battle getting their first jabs on January 16.

A total of 9,99,065 beneficiaries have so far been vaccinated for COVID-19 through 18,159 sessions held till the evening of January 21, the sixth day of the immunisation drive, according to a provisional report of the Union Health Ministry.

India’s drug regulator has approved two vaccines – Covaxin developed by Bharat Biotech and Covishield from the Oxford/AstraZeneca stable being manufactured by the Serum Institute of India (SII) — for emergency use in the country.

According to the government, the shots will be offered first to an estimated one crore healthcare workers and around two crore frontline workers, and then to persons above 50 years of age, followed by persons younger than 50 years of age with associated comorbidities.