Where is health in the stimulus package?

A part of the relief funding must be used to seize the opportunity and invest in universal health coverage

Updated - May 18, 2020 12:57 pm IST

Published - May 18, 2020 12:05 am IST

“The pandemic has brought into focus India’s low spending on public health.” Healthcare workers in Mumbai in April.

“The pandemic has brought into focus India’s low spending on public health.” Healthcare workers in Mumbai in April.

India can pause and breathe a sigh of relief in its efforts to contain the spread of the coronavirus . Though the situation varies across States, at the end of the first innings, the country seems to have an advantage.

Our bowlers have done well to limit the COVID-19 score and flatten the curve. Credit for containing the spread of the virus should go to our frontline medical and health workers in government who literally rushed in where angels fear to tread to save people’s lives. Putting aside threats to personal safety, family interests, and stigma, selfless government health workers across the country are the ones who are leading the charge.

Atmanirbhar Bharat Abhiyan  |  First tranche  |  Second tranche  |  Third tranche  |  Fourth tranche | Fifth tranche

We shouldn’t however forget that the pitch conditions aren’t favourable to the Indian players. Even before COVID-19, India was staring at a serious economic slowdown. India's GDP growth for 2019-20 was lowered to 4.1% from 5% projected by several agencies before the outbreak of the virus. Recent reports predict that the impact of COVID-19 might reduce GDP growth rate to 1.1% or even lower in the current financial year. Unemployment has been growing since January 2020 when the first cases of coronavirus emerged. According to the Centre for Monitoring Indian Economy, India’s unemployment rate at the end of May 16, 2020 was staggeringly high at around 24%.

The second reason why the pitch isn’t in India’s favour is because our healthcare delivery system in most States is extremely fragile. One wonders, for instance, whether Bihar can handle the consequences if the virus begins to spread with the return of millions of migrant workers back to the State. Many other States also face a similar plight given the poor state of primary healthcare facilities.

Restoring livelihoods

During this innings break, discussions on the strategy to win the match have been focusing on ending the lockdown, reviving economic activities, restoring livelihoods, addressing concerns of hunger and starvation, stimulating small and medium enterprises, and enhancing farm incomes. The package of ₹20-lakh crore, equivalent to about 10% of India’s GDP, announced by the Prime Minister on May 12, is expected to restore the livelihoods of millions of migrants and other workers who have lost their jobs and also enable entrepreneurs and businesses to get re-started.

Atmanirbhar Bharat Abhiyan  | Nirmala promises increased expenditure for health sector, but no mention of any specific outlay

Some elements of the stimulus package have been announced. Others might follow. While it is too early to comment on the impact of these announcements, one should not forget that the fear factor in reviving employment and business is real. Economic desperation might leave poor workers with no choice but to return to work. But many of them are truly worried about getting infected. Businesses are also genuinely concerned about the collapse of demand and shutting down of retail outlets. Equally disconcerting for them are the difficulties in and consequences of not adhering to conditions set by the government. They are worried about the unpredictability of government’s actions and policy revisions. This could well be a reason why, according to recent reports, in the midst of the long-term structural shift from China, companies prefer to relocate manufacturing to countries in the Association of Southeast Asian Nations (ASEAN) region, and not India.

In all this, the silence around health is disturbing. While economic stimulus packages are essential, the match cannot be won without urgently and immediately stepping up investments in health.

Strengthening public health

Dealing with the COVID-19 pandemic has brought out the critical importance of the public sector in health provisioning. However, stuck at around 1.15% of GDP for well over a decade, the low level of public spending on health is both a cause and an exacerbating factor accounting for the poor quality, limited reach and insufficient public provisioning of healthcare. Despite this, the public health system has risen to the challenge so far. The Union and State governments seem to have found the financial resources to provide an emergency response to deal with the pandemic. With agility and speed, orders have been placed for PPEs, ventilators, testing kits, and other supplies needed to detect and treat COVID-19 patients. It is possible that resources allocated for other health programmes are being diverted to deal with the COVID-19 pandemic. The opportunity cost of such diversion of funds could be high. Media reports point out, for instance, that people’s access to routine maternal and child health as well as family planning services in parts of the country has been negatively impacted. Also, many States are simply not in a position to deal with a second wave of infections. The pandemic has exposed a hard truth: most private healthcare providers seem to be incapable of and unwilling to help even during a national crisis. And India’s private sector in health is sizable. According to recent figures, the private sector accounts for 93% of all hospitals, 64% of all hospital beds, and 80-85% of all doctors. Rapidly declining revenues and sharply eroding profits are leading to the closure of many private hospitals. Only a few private providers have come forward to extend support to the government.

Not addressing weaknesses in the public health delivery system can thwart all efforts at reviving the economy. State governments need to be prepared as the worst maybe yet to come.

This is the time then to seize the opportunity and invest in universal health coverage (UHC) by reversing the financial neglect of public healthcare. Nearly every country in the world that has achieved anything like UHC has done it through the public assurance of primary healthcare.

Announcing a new ‘health investment plan’ (as part of the stimulus package) is the urgent need of the hour. At least 1% of GDP out of the stimulus package should be earmarked for improving the country’s health infrastructure and strengthening public health service delivery. And up to 70% of the additional expenditures should be ring-fenced for primary healthcare and further strengthening health and wellness centres, primary health centres and community health centres. Only then can State governments be better prepared to face a second round of the pandemic. Investing in health, apart from improving people’s well-being, is also essential for accelerating and sustaining India’s economic growth.

If cricket is a game of chance, so is the match against COVID-19. What the immediate future holds for India in terms of the spread of the virus is not known. As is said of matches, ‘it ain’t over till it’s over.’ There is only one way to win this match and establish a self-reliant and prosperous India: seize the opportunity and step up investments in public health across the country.

A.K. Shiva Kumar is a Delhi-based development economist

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