Fifteenth Finance Commission chairperson N.K. Singh on Tuesday called for a substantial increase in budgetary allocations for the health sector and restructuring of centrally sponsored schemes to enable greater flexibility for States.
Mooting the inclusion of ‘health’ in the Concurrent list under the Constitution, Mr. Singh also made a pitch for universalising health insurance to capture ‘the missing middle’ – people who are not rich enough to buy private health cover nor poor enough to qualify for government schemes.
While India’s response to the pandemic may have taken the ‘world by surprise’, it should not lull policy makers into a state of complacency, Mr. Singh cautioned, citing uncertainties and the need to address ‘endemic’ issues beyond the pandemic.
“There is no getting away from the fact that public outlays in the health sector need to be substantially augmented. We need to enhance public outlays [on health] to 2.5% of GDP by 2025,” he said at the CII Health Summit. This, he explained, would entail a major jump over this year’s Budget numbers and require States to target 8% of their Budgets towards the health sector, which is ‘a daunting challenge’.
“We must recognise the large inter-State variations on health spending and outcomes. For instance, except Meghalaya, States are spending less than 8% of their Budget on the health sector, with the average being at 5.18% in 2018–19,” Mr. Singh pointed out, adding that the per capita health spending of Bihar, Uttar Pradesh and Jharkhand is about half that of Kerala and Tamil Nadu.
The Finance Commission chief also suggested setting up a development financial institution for the health sector and said centrally sponsored schemes need to be ‘somewhat restructured’ so they are ‘flexible enough’ for States to adapt and innovate.
