Health: the missing factor

Post-budget discussions this year were almost entirely highjacked by speculation on the inflationary effects of the petrol price hike. In fact, the hullabaoo over the petroleum hike almost completely diluted the strong social thrust of the budget — in line with its stated third goal of inclusive development.

There had been some speculation, prior to the budget, that the social sector would be the scapegoat in the government’s efforts to curb the fiscal deficit, but fortunately, as Pranab Mukherjee and the budget assured us, inclusive growth continues to be ‘an act of faith’ for this government.

To begin with, the share of social spending was increased to 37% of total spending for this fiscal, a significant jump over the previous year. Added to this is the 25% allocation for rural infrastructure, which could have its own beneficial cascading effects on rural livelihoods and development, depending on the ultimate beneficiaries. Apart from these is the budget’s strong thrust on helping farmers and the farm economy, which should also hopefully have a salutary effect on the livelihoods of the rural aam aadmi.

As expected, funding for the government’s flagship programme, NREGA, was boosted to Rs40,100 crore, and its participants made eligible to enroll in the government’s BPL (below poverty line) health insurance scheme. Other rural initiatives include an increase in banking facilities for rural inhabitants, a push towards providing services to ‘unbanked’ areas and increased allocations for the construction of rural housing and rural infrastructure.

The budget put aside Rs1,000 crore for a National Security Fund for these workers, which includes weavers, rickshaw pullers, bidi workers, and others who have no buffer against the vagaries of markets and prices. While the amount seems paltry in view of the millions of workers it is expected to cover, it is an important first step.

This is the year when education is at the forefront of our social efforts as the government has to move on the Right to Education Act, passed last September. It has also recently introduced the Rashtriya Madhyamik Shiksha Abhiyan (RMSA), which aims to do for secondary education what the Sarva Shiksha Abhiyan (SSA) has successfully achieved for elementary education.

One should remember, though, that the SSA was fuelled by a 2% cess on direct taxes levied by the central government some years ago, which helped raise a significant corpus of funding. Ensuring compulsory free education for all till the age of 14 as well as funding the RMSA are going to place demands on the exchequer which probably cannot be met by the Rs31, 036 crore allotted in this budget, even if the states pitch in. Estimates of the financial support needed (from both Central and state governments) to meet the needs of the entire Right to Education programme range from Rs1.44 lakh crore to Rs1.73 lakh crore.

The one very disappointing aspect in this budget’s social thrust is the almost negligible increase in health spending. If there is one area that is crying out for public funding it is healthcare: this sector, which affects everyone in the country, received only Rs22,300 crore, a meagre 14% more than last year.

Healthcare in India urgently needs the kind of attention now being given to education, and possibly the same kind of dedicated funding the SSA initially received. Maybe we need to remind our policy-makers that ‘a malnourished child cannot study’, so no amount of increased SSA funding will lead to better educational outcomes if children are unhealthy. We also need to remind the UPA government of its promised hike in health expenditure to 2-3% of GDP made in 2004. With the stingy increases in health funding over the past budgets, it will be decades before the current 1% of GDP reaches the targeted 3% of GDP.

Our dismal health indicators put us in the same camp as some of the poorest countries, and these are an outcome of low public healthcare spending. Infant death rates are so high that the 13th Finance Commission has recommended rewarding states that manage to bring these down.

Overall, it bears repeating that human development in India will depend not only on funding but also on appropriate ‘utilisation’ of these funds. The announcement in this budget of the setting up of an Independent Evaluation Office in the Planning Commission which will objectively assess public programmes to increase their reach is very welcome.

At the end of the day, the sobering fact is that central government spending is only one-fifth of the government’s total spending on the social sectors. This is because health, education and many other ‘social’ areas are also looked after by states. All the good intentions contained in increased spending announced in the Union Budget will only be effective when states also step up their funding — and their commitment — to these vital areas.