As the pandemic hit, how much did India spend on health?


When the Covid-19 pandemic erupted final year, it caught the world, and India, by surprise. No one knew what the remedy protocol for the unknown disease was once. Most countries were short of masks, personal protective equipment (PPE) kits, and testing kits that would form the first line of defence, and hospital beds, oxygen units, and ventilators that would form the second one.

A year later, as India faced its second wave of infections, the most severe on the planet so far in relation to day by day cases, the provide constraints only worsened. Everything from testing kits to hospital beds, oxygen to ventilators, medicines to ambulances have gave the look to be in short provide.

Used to be India ill-prepared for this calamity? A great way to respond to this question is to have a look at government spending (for both the Union and states), on health from 2019-20 to 2021-22.

Union government’s health spending

Even though 2020-21 has come to an end, we would not have the last numbers on government spending yet. What we have so far are provisional spending numbers from the Controller General of Accounts (CGA), which works under the ministry of finance.

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The headline numbers do not impress. In 2019-20, the ministry of health and circle of relatives welfare spent ₹64257.8 crore. This amount was once increased by just 4.4% in the 2020-21 budget estimates (BE), that have been presented before the pandemic hit India. Health spending in 2020-21 was once increased to ₹82,928.3 crore according to the revised estimates (RE) presented with the 2021-22 Budget.

Whether the CGA numbers are any indication, ₹2,234.4 crore, or approximately 3% of the revised estimate, will remain unspent. The complete allocation for the ministry of health in 2021-22 (BE) is lower than the 2020-21 (RE) numbers.

State government health spending

The Centre for Monitoring Indian Economy (CMIE) database has health spending numbers from 2019-20 to 2021-22 for 24 states. Unlike central government expenditure, there’s no CGA like body which has recent updates on state government expenditure. In 2019-20, these states spent ₹1.34 lakh crore on health (medical and public health under social products and services). This was once expected to increase to ₹1.64 lakh crore in 2020-21, as per budget estimates. This number was once revised to ₹1.69 lakh crore as per the revised estimates published in 2021-22. These 24 states are expected to spend ₹1.9 lakh crore on health in 2021-22.

The actual spending in 2020-21 will only be known when the actual estimates are published in 2021-22. States spend more than the Union in relation to both revenue and capital spending.

Capital spending on health

The trend in capital spending on health by the Union government that will include creation of new health facilities is revealing. It was once a paltry ₹1666.9 crore in 2019-20. The 2020-21 BE numbers reduced it to ₹1065.7 crore, which was once revised upwards to ₹4233.5 crore in 2020-21 RE numbers. Then again, only ₹3586.99 crore (or only 85% of the RE) has been spent by March, according to provisional figures by the CGA.

The headline 97% number of the ministry of health is driven entirely by the 98% utilisation of revenue expenditure which made up 96% of the ministry’s complete expenditure. Revenue expenditure is for recurring expenses such as paying salaries. The 2021-22 BE figure for capital spending is lower than both 2021 RE and provisional estimates put it at ₹2509 crore.

The 24 states, for which data is to be had, have a higher capital spending on health than the centre. They spent ₹12256.7 crore in 2019-20. The 2020-21 BE number for this head was once ₹20787.2 crore. Then again, this was once slashed marginally to ₹20177.4 crore in the 2020-21 RE numbers.

Many experts have pointed that the states have been forced to chop back on capital spending because of the pandemic’s economic disruption. The 2021-22 BE figures on capital spending health by these states is ₹29872.7 crore.

When read with the shortfall of ₹600 in states’ capital spending as per 2020-21 BE and RE numbers, the overall rise in capital spending on health after the pandemic hit India is abysmally low. It is no wonder that the health infrastructure has been on the verge of collapse as the second one wave rages through India.

Not everyone is equally guilty for the naughty health spending

Some states devoted a greater share of their expenses to health in 2021-22 than others. Delhi, as an example, spent 12.4% of its budget on health according to the RE figures for 2021-22, over five percentage points higher than Assam, the next big state that used the most share of its expenditure for health. In comparison, the Union government allocated 2.4% of its budget to the ministry of health and circle of relatives welfare.

The only state – some of the 24 for which data is to be had with CMIE – which spent less than this number is Telangana, which spent 2.39%. 12 states spent over 5% of their budget on health. Another nine states spent 4%-5% of their expenditure on health.

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