Why has there been a major thrust by the Budget on healthcare?

That was always going to be the case, especially considering the fact that COVID has not only taken a toll on the economy but also exposed the underbelly of India’s weak healthcare system and the social security available to people at large. In the budget the government has allocated an amount of Rs.35,000 crore towards the COVID-19 vaccine.

Apart from this very specific allocation, the government has also increased its healthcare budget by nearly 137% on a YOY basis. The healthcare budget for 2021-22 stands at Rs.2.24 trillion, which incidentally includes a grant of Rs.36,022 crore towards water and sanitation. Even if you eliminate that and the COVID allocation, healthcare allocation is still higher.

The government also outlined plans to launch a centrally-sponsored scheme, PM Atma Nirbhar Swasth Bharat Yojana, to boost the existing health systems in the country with an outlay of around Rs.64,180 crore. However, this amount will be allocated over 6 years. Even with this increased allocation, the healthcare budget is just about 1.4% of GDP. The general EM standard is closer to 3%, so India still has a long way to go.