News article

India’s universal health plan fails to get Government nod

Posted:  Wednesday, November 04, 2015

In what can be termed as a disappointing move, the Indian Government has requested for a drastic cut in an ambitious health plan since the cost estimates rose up to $18.5 billion over five years. The newly appointed Government’s fall budget allotted increased funds for infrastructure spending rather than diverting it to the social sectors.

The ambitious plan by the health ministry, titled the National Health Assurance Mission, aimed to provide free drugs, diagnostic services and insurance for serious ailments for India's vast population of 1.2 billion people. This plan was drafted after consulting an expert panel, the Prime Minister’s office and also an expert from the World Bank.

The proposed insurance would have covered costly and serious ailments such as heart surgeries or organ failure. This ambitious plan was initially estimated at $25.5 billion over four years. By the time it was presented to the PM, it was trimmed to $18.5 billion (1.16 trillion rupees) for over five years.

"The constraint on India's financial resources was conveyed to health officials, and even to those from other ministries," said a Government official from the health ministry. To accommodate the budget cutback, the insurance facility will be withdrawn. Experts believe this move will negatively affect the private sector as these serious cases would have been diverted to private hospitals.

Presently, India spends about 1% of its gross domestic product (GDP) on public health; however badly-managed public health system translates to poorly utilised funds. The health ministry in a vision document proposed raising spending to 2.5 percent of GDP but did not specify a time period. However, much to the experts dismay, the union budget for the full-year starting April has only been increased by 2% from the previous year, less than the inflation. Such meagre allotment dims the prospects for a massive and beneficial health plan.