Healthcare Budget Advances By 3.4 %, Major Schemes See Downfall In Allocation

The Union Finance Minister, Nirmala Sitharaman unveiled the Union Budget for the Financial Year 2023-24 on Wednesday, out of which the healthcare sector has garnered an outlay of Rs 89,155 crores subsuming Rs 86,175 crores provided to the Department of Health and Family Welfare and Rs 2,980 crores given to the Department of Health Research.

The overall budget outlay given to the Ministry of Health and Family Welfare has increased by 3.42 per cent against Rs 86,200 crores given in the FY2022-23. While the health research corpus dipped by 6.8 per cent from Rs 3,200 crores in the FY22-23, a contraction of Rs 220 crores. The revised estimate for FY22-23 stood at Rs 76,370 crores. 

On the other hand, the Department of Pharmaceutical's overall allocation increased by a whopping 40.8 per cent to Rs 3,160 crores from Rs 2,244 crores. With the pharmaceutical development fund increasing by Rs 1,150 crores this year to Rs 1,250 crores. Whereas the PLI schemes for pharmaceuticals and medical devices have been put on the back burner as the overall PLI corpus reduced by 26.3 per cent from Rs 1629 crores in FY 22-23 to Rs 1200 crores this year.

Allocation To Healthcare Schemes

Major healthcare schemes like National Health Mission, PMSSY (Pradhan Mantri Swasth Suraksha Yojana) and Human Resources for Health and Medical Education saw major downfalls in their allocations, the NHM received Rs 29,085 crores for the FY 23-24, an increase of 0.3 per cent against the revised estimate of Rs 28,974 for FY 22-23 and a reduction of Rs 7,915 crores from FY22-23 allocation of Rs 37,000 crores. 

While PMSSY received only Rs 3,365 crores for FY 23-24 versus the revised estimate of Rs 8269 crores for FY 22-23, a reduction of 59.3 per cent. The medical education corpus also dipped by Rs 1,000 crores, from Rs 7,500 crores allocated in FY22-23 to Rs 6,500 in FY23-24.

Whereas schemes like PMJAY, PMABHIM, and National AIDS and STD Control Program among others received slight improvements in the allocation from last year. For instance, the allocation to PMJAY (Pradhan Mantri Jan Arogya Yojana) rose by 12.2 per cent to Rs 7,200 crore against Rs 6,412 crore in FY22-23. 

Similarly, the outlay given to PMABHIM (Pradhan Mantri Ayushman Bharat Healthcare Infrastructure Mission) increased by 0.57 per cent to Rs 4,200 crore versus Rs 4,176 crore in the previous year's budget. 

Major Announcements

The Finance Minister in her budget speech said that 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014. The Minister further spoke on  eliminating Sickle Cell Anaemia, she said “A Mission to eliminate Sickle Cell Anaemia by 2047 will be launched. It will entail awareness creation, universal screening of 7 crore people in the age group of 0-40 years in affected tribal areas, and counselling through collaborative efforts of central ministries and state governments.” 

In the area of medical research Sitharaman announced that facilities in select ICMR Labs will be made available for research by public and private medical college faculty and private sector R&D teams for encouraging collaborative research and innovation.

A much needed push for the pharmaceutical sector through opening of centres of excellence of R&D also found mention in the Finance Minister speech, she stated that “A new programme to promote research and innovation in pharmaceuticals will be taken up through centers of excellence. We shall also encourage industry to invest in research and development in specific priority areas”.

Sitharaman further announced multidisciplinary courses for medical devices and said that dedicated multidisciplinary courses for medical devices will be supported in existing institutions to ensure availability of skilled manpower for futuristic medical technologies, high-end manufacturing and research. 

Industry Reaction 

The Union Budget allocations for the healthcare sector were largely well received by the industry leaders and experts with a few old pain points which were not given heed for a third straight year by the Ministry.

Rajiv Nath, Forum Coordinator, AIMED expressed deep disappointment and anguish over the Union Budget 2023 giving cold shoulder to the Indian Medical Device Industry’s core demands.

He said that “It is highly disheartening that against Industry’s expectations and assurance by the various Government Departments, the government has not announced any measures to help end the 80-85 per cent  import dependence forced upon India and an ever-increasing import bill of over Rs 63,200 Crore.

He further said that  medical devices imports continued to grow at an “alarming” level by 41 per cent in FY22. India imported medical devices worth Rs 63,200 crore in 2021-22, up 41 per cent from Rs 44,708 crore in 2020-21. “It is very painful to see the plight of domestic industry players shutting shop as the local industry cannot compete with cheaper Chinese imports,” he added.

Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance stated that the Union Budget 2023 aims to provide stimulus towards innovation with the announcement of the promotion of research and innovation programme in pharmaceuticals through Centres of Excellence. “The Government has announced further strengthening healthcare infrastructure with a focus on increasing Nursing Colleges, Artificial Intelligence, Digital Skilling and Sickle Cell Anaemia Elimination Mission. The positive thrust on research and innovation is a welcome move to take India to the next level," he added.

Anjan Bose, Former President of Philips Healthcare & Philips Consumer Lifestyle explained that healthcare got its sunshine moments and good focus through various initiatives such as 157 new Nursing colleges, the mission to eliminate sickle cell anaemia, incentivising Pharma R&D, dedicated skill courses for futuristic Medical technologies, high-end manufacturing should have a positive transformational impact across segments in Healthcare sector

“Along with the establishment of nursing colleges, a provision for paramedical workers and ancillary workers should also be considered.  The focus on collaboration with the private sector on R&D and innovations is a great move and I hope it marks a new beginning for healthcare and pharma innovations in India. It would have been great if the union budget also focused on funding to strengthen India's health infrastructure system and R&D capacity," opined Anand. K, CEO, of SRL Diagnostics.