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Union Budget 2018 | Govt needs to increase healthcare outlay in budget: ICRA

Public sector investment on healthcare accounts for less than 1.5 per cent of GDP, which is one of the lowest globally, and the government intends to increase the expenditure to 2.5 per cent of GDP by 2025.

Reported by: PTI, Mumbai [ Updated: January 31, 2018 19:23 IST ]
Union Budget 2018 | Govt needs to increase healthcare
Image Source : PTI Union Budget 2018 | Govt needs to increase healthcare outlay in budget: ICRA

Public sector accounts for only 30 per cent of the total healthcare expenditure in the country and investment in building and maintaining public health infrastructure needs priority in the forthcoming budget for FY 2018-19, a report says. 

Public sector investment on healthcare accounts for less than 1.5 per cent of GDP, which is one of the lowest globally, and the government intends to increase the expenditure to 2.5 per cent of GDP by 2025.

The outlay on healthcare increased by a healthy 28 per cent in the last budget and the allocation is likely to see a similar increase in the forthcoming budget as well, according to a report by rating agency Icra.

In line with National Health Policy (NHP) 2017, the expenditure is expected to be directed towards setting up of new hospitals to increase the number of beds in the country, and for transformation of existing district and town level health centres to provide better healthcare facilities across geographies while using the existing infrastructure.

Public sector accounts for only 30 per cent of the total healthcare expenditure in the country, as compared to 42-58 per cent in Brazil, 58 per cent in China, 52 per cent in Russia, 50 per cent in South Africa, 48 per cent in USA and 83 per cent in UK as per the WHO reports.

ICRA believes that investing in building and maintaining public health infrastructure should be given

priority in the budget as these facilities are lagging and vast majority of the population has to bear their own healthcare costs due to low penetration of health insurance.

Besides, along with the setting up of new hospitals, the report recommends setting up of medical colleges and nursing academies to address the shortage of beds and skilled medical professionals in the country, it said.

The budget is also likely to increase the allocation for addressing the increasing burden of non-communicable diseases (NCDs) such as diabetes, cardiovascular diseases, hypertension and to increase the outlay for providing free drugs, diagnostics and emergency services across all public hospitals, in line with NHP 2017.

COMMENTSIcra suggested that new infrastructure developed through incentives can also be utilised for catering to the growing medical tourism in the country, which is expected to continue to grow by 20 per cent over the next five years generating export revenues and employment. 

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