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Budget 2020: Health gets Rs 7.6K crore boost, govt plans to set up hospitals in public-private mode

The sector got proposed allocation of Rs 69,000 crore in the Union Budget, including Rs 6,400 crore for Prime Minister Jan Arogya Yojana (PMJAY).

Written by Abantika Ghosh | New Delhi |
Updated: February 2, 2020 10:10:16 am
Budget 2020, Budget 2020 Healthcare sector, healthcare budget, Nirmala Sitharaman 2020 Budget, Indian Economic slowdown, Business news indian express Cess on import of medical equipment to be used for creating health infrastructure in aspirational districts

The big health sector announcement in the Union Budget 2020 is the decision to set up a viability gap funding window for setting up hospitals in PPP mode, in a bid to boost coverage of Ayushman Bharat, the government’s flagship health programme.

The sector got proposed allocation of Rs 69,000 crore in the Union Budget, including Rs 6,400 crore for Prime Minister Jan Arogya Yojana (PMJAY).

While the overall allocation is up from last year’s Rs 61,398 crore, the allocation for PMJAY has remained static — a result perhaps of the inability of the National Health Authority to spend much of its allocation when the revised Budget estimates were drawn up last year.

In her Budget speech, Finance Minister Nirmala Sitharaman said: “Presently, under PM Jan Arogya Yojana, there are more than 20,000 empanelled hospitals. We need more in Tier-2 and Tier-3 cities for poorer people under this scheme. It is proposed to set up viability gap funding window for setting up hospitals in PPP mode. In the first phase, those aspirational districts will be covered where presently there are no Ayushman-empanelled hospitals. This would also provide large-scale employment opportunities to the youth. Proceeds from taxes on medical devices would be used to support this vital health infrastructure.

From farm sector to personal finance, here’s The Indian Express’ full coverage of Budget 2020

“In view of the “world-class goods” currently being manufactured in India and to discourage imports, Sitharaman announced “nominal health cess, by way of a duty of customs, on imports of medical equipment keeping in view that these goods are now being made significantly in India. The proceeds from this cess shall be used for creating infrastructure for health services in the aspirational districts.”


No cut in outlay makes Health ministry happy

Social sector The overall increase in proposed allocation is below last year’s Rs 9,000 crore, but Health Ministry officials are not complaining, especially since there were murmurs of allocation “cuts” in the run-up to the Budget this year. The fact that PMJAY spending has been kept at Rs 6,400 crore bears out the point that Health Ministers often make — that the country’s health system is not equipped to spend large increases in health Budget. Till November last year, PMJAY had managed to spend only a third of its allocation.

Sources in the government, however, said that currently there are no aspirational districts where there are no hospitals empanelled under PMJAY, and every district has at least one empanelled district hospital. However, the status is under review and districts where available services are not adequate will be prioritised, they said.

Sitharaman also said, “It is proposed to attach a medical college to an existing district hospital in PPP mode. Those states that fully allow facilities of the hospital to the medical college and wish to provide land at a concession would be able to receive viability gap funding. Details of the scheme would be worked out,” she said.

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The move will encourage large hospitals with sufficient capacity to offer resident doctors DNB/FNB courses under the National Board of Examinations.

“There exists a huge demand for teachers, nurses, paramedical staff and caregivers abroad. However, their skill sets, many a time, do not match the employer’s standards and therefore need to be improved. I propose that special bridge courses be designed by the Ministries of Health, Skill Development together with professional bodies to bring in equivalence. Language requirements of various countries also need to be included. All these should be achieved through special training packages,” Sitharaman said in her speech.

The Budget mentioned programmes such as Mission Indradhanush — the programme slogan is “TB harega desh jitega” to end the disease by 2025, five years ahead of the global deadline — and the FIT India movement. Sitharaman also announced expansion of the Jan Aushadhi Kendra Scheme to all districts of the country, offering 2,000 medicines and 300 surgicals by 2024.

There was a small increase in duty on cigarettes though bidis remained unchanged.

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Calling it a landmark budget, Union Minister for Health and Family Welfare Dr Harsh Vardhan said it is a “pragmatic, visionary, progressive and a people’s Budget. It aims to be built on three prominent and fundamental pillars of an Aspirational India to boost the standard of living; economic development for all; and building a humane and compassionate society with Sabka Saath, Sabka Vikas…this is an inclusive Budget which is pro-poor, pro-farmer, pro-downtrodden and for the development of all sectors and the country.”

He said the health sector allocation shows an “appreciable increase of 3.75 per cent, while there has been a 10-per cent hike in allocation for the Department for Health Research”.

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