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Thursday, June 1, 2023

2021-22 Budget and Bharat’s Healthcare

In 2021-22 budget, Government has allocated (budgeted estimate) Rs 2,23,846 crore outlay for health and wellbeing in as against Rs 94,452 crore in 2020-21 .

Health and Wellbeing – Expenditure (In INR Crores)

Ministry/Dept Actuals 2019-20 Budgeted Estimates 2020-21 Budgeted Estimates 2021-22
D/o Health & Family Welfare 62,397 65,012 71,269
D/o Health Research   1,934   2,100     2,663
M/o AYUSH   1,784   2,122     2,970
CoVID related Special Provisions Vaccination   35,000
D/o Drinking Water & Sanitation 18,264 21,518   60,030
Nutrition   1,880   3,700     2,700
FC Grants for Water and Sanitation   36,022
FC Grants for Health   13,192
Total 86,259   94,452 2,23,846 

(Source- Budget 2021-22)

The 15th Finance Commission (FC) has recommended that 60 per cent of rural local bodies’ grants from the central divisive tax pool be spent on water conservation, drinking water provisions and to manage household waste and sewage management, including maintaining the open-defecation free (ODF) status achieved under the Swachh Bharat Mission (SBM) in 2019.

An integrated approach towards water and sanitation through convergence between the National Rural Drinking Water Programme (NRWDP) and SBM-Grameen is intended to be adopted for this purpose.   

The Fifteenth Finance Commission granted Rs 4,36,361 crore from the central divisive tax pool to local governments — both rural and urban — for 2021-26 out of which the rural bodies would receive Rs 2,36,805 crore. 

In the 2021-22 budget allocation towards drinking water and sanitation is a significant amount of Rs.96,052 Crores (i.e., Rs. 60,030 + Rs. 36,022), thanks to the 15th Finance Commission. 

The FM announced in her budget speech that a new centrally sponsored scheme, PM Atma Nirbhar Swasth Bharat Yojana, will be launched with an outlay of about Rs 64,180 crores over 6 years which will be in addition to the National Health Mission. The main interventions under the scheme are:  

  1. Support for 17,788 rural and 11,024 urban Health and Wellness Centers 
  2. Setting up integrated public health labs in all districts and 3382 block public health units in 11 states;
  3. Establishing critical care hospital blocks in 602 districts and 12 central institutions; 
  4. Strengthening of the National Centre for Disease Control (NCDC), its 5 regional branches and 20 metropolitan health surveillance units;
  5. Expansion of the Integrated Health Information Portal to all States/UTs to connect all public health labs;
  6. Operationalisation of 17 new Public Health Units and strengthening of 33 existing Public Health Units at Points of Entry, that is at 32 Airports, 11 Seaports and 7 land crossings; 
  7. Setting up of 15 Health Emergency Operation Centers and 2 mobile hospitals; and  
  8. Setting up of a national institution for One Health, a Regional Research Platform for WHO South East Asia Region, 9 Bio-Safety Level III laboratories and 4 regional National Institutes for Virology.  

While the above initiative proposed over a period of next 6 years is a welcome step the fundamental problems in Bharat’s healthcare continue to remain which are:

Shortage of doctors 

The NHP 2019 report also states that there is only one allopathic government doctor for every 10,926 people in Bharat against the WHO’s recommended doctor-population ratio of 1:1000.

Shortage of hospitals

The no. of beds available in public facilities across the country is 7,39,024 which is  around .55 beds per 1000 population. This is far below the WHO benchmark of 3 beds per 1000 population. 

High out of pocket expenses by the people for healthcare

High out-of-pocket expenses push 7% of the population into poverty each year. Bharatiyas are the sixth biggest out-of-pocket (OOP) health spenders in the low-middle income group of 50 nations, as per a May 2017 IndiaSpend report. “Around 70 per cent of the overall household expenditure on health is on medicines; which is an important factor contributing to poverty.”

Little coverage of health insurance 

Only 35% of the population have health insurance. 

Lack of regular access to essential medicines  

An estimated 469 million people in Bharat do not have regular access to essential medicines, according to the WHO.

Meagre share of preventive healthcare at 9.6% in the overall healthcare expenditure 

As per the National Health Profile report 2019 , Bharat’s public expenditure on health now stands at 1.28 per cent of the GDP, which is way lower than the average expenditure by countries clubbed as among the “poorest”. Even the country’s public health expenditure is lower than other South-East Asian countries like Nepal, Sri Lanka, Bhutan, Indonesia, Thailand.

To address the above mentioned challenges the following long term policy measures are to be seriously considered by the government:

  1. Setting up one medical college in every district in the country. Providing subsidized/ free medical education to the students from rural areas with a caveat to serve in the villages after becoming doctors. 
  2. Encourage PPP Models in rural healthcare by collaboration between the government, private hospitals and health insurance companies. 
  3. Ensure every citizen of the country is covered under health insurance through appropriate legislative measures. 
  4. Make master health checkup mandatory for annual renewal of health insurance cover in order to focus more on preventive health care and thereby reduce the burden of disease on curative healthcare. 
  5. Creation and maintenance of master health records of all the citizens on real time basis after taking necessary measures that the right to privacy of the people is duly maintained.  
  6. Government expenditure on healthcare to primarily focus on the following activities-  providing the health infrastructure and supporting the initiatives of the private sector in providing health infrastructure, bearing the health insurance premium burden of the poor and deserving people. 
  7. To bring under price control various health interventions, including diagnostics and medical treatment along with medicines, in due course.

Let us hope the health sector will be brought under the concurrent list of the constitution (currently it is under the state list) so that both the centre and the states could enhance their budgetary allocation under the health sector by adopting a uniform approach with regard to long term policies.


  1. Budget 2021-22.
  2. https://pib.gov.in/PressReleasePage.aspx?PRID=1539877

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Dr. B.N.V. Parthasarathi
Dr. B.N.V. Parthasarathi
Ex- Senior Banker, Financial and Management Consultant and Visiting faculty at premier B Schools and Universities. Areas of Specialization & Teaching interests - Banking, Finance, Entrepreneurship, Economics, Global Business & Behavioural Sciences. Qualification- M.Com., M.B.A., A.I.I.B.F., PhD. Experience- 25 years of banking and 16 years of teaching, research and consulting. 200 plus national and international publications on various topics like- banking, global trade, economy, public finance, public policy and spirituality. One book in English “In Search of Eternal Truth”, two books in Telugu and 38 short stories 50 articles and 2 novels published in Telugu. Email id: [email protected]


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