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Government to triple spending on health in 12th Five-Year Plan

LiveMint, 01 March, 2012

Government To Triple Spending On Health In 12th Five-Year Plan


Increased budget comes with sweeping changes in the sector; PMO says availability of funds will not be a constraint
Vidya Krishnan & Sahil Makkar
New Delhi: The Prime Minister’s Office (PMO) has decided to more than triple the outlay for the health sector in the 12th Five-Year Plan (2012-17) to reduce the personal healthcare expenses of Indians.
With the increase, the government’s spending on healthcare will rise to 2.5% of gross domestic product (GDP) by 2017 from an average of 0.9% in the five years ending 31 March, the PMO said in a statement on Wednesday. The PMO said availability of funds to improve public health will not be a constraint.
The increased budget comes with sweeping changes in the healthcare sector with focus on streamlining expenditure under the National Rural Health Mission (NRHM), introduction of district-wise pilots of Universal Health Coverage (UHC), announcement of four more institutions on the lines of the All India Institute of Medical Sciences, in addition to the seven that are under construction, the creation of a public health cadre and providing free medicines through a central procurement agency.
The decisions were taken at a 10 February meeting headed by Pulok Chatterji, principal secretary to the Prime Minister. The meeting considered the recommendations of a high-level expert group and the National Commission for Macroeconomics and Health.
The minutes of the meeting, reviewed by Mint, indicate that the government is keen on improving healthcare infrastructure and human resources so that the “increased funds can be absorbed effectively”.
The Planning Commission approved a health ministry proposal to increase the allocation on public health to Rs4.04 trillion in the 12th Plan starting 1 April from Rs70,986.76 crore in the preceding five-year period. Given that health is a state subject, the ministry has suggested that two-thirds of the expenditure on public health be borne by the state governments.
The health ministry will soon start implementation of the district-wise pilot project of UHC in some states to decide on how much each person will be entitled to and which diseases will be covered under the programme. The PMO has instructed the health ministry to define a clear road map by 30 April, the document said.
“The Prime Minister’s decision to increase health funding, strengthen health services and increase access to health care for all citizens is most welcome,” said K. Srinath Reddy, chairman of the high-level expert group set up by the Planning Commission. “The states and the Centre should now jointly decide on how best to merge the multiple health insurance schemes that currently exist into an integrated framework of universal health coverage.”
The merger of all health-related welfare programmes under the NRHM, giving more autonomy to district and state-level officials associated with the projects, is aimed at bringing more efficiency and accountability to government healthcare programmes. The Mission Flexipool, Reproductive and Child Health Pool and the pool set aside for immunization will initially be merged, while funds under National Disease Control Programme will be brought in later.
“This move will, in effect, give more power to the delivery team at state and district levels,” said an health ministry official, who declined to be identified. “The allocation will also be made to each district keeping the health indicators in mind. The integration is aimed at bringing in more transparency in the delivery mechanism.”
The merger will include funds from donor agencies such as the World Bank and Global Fund on AIDS, tuberculosis and malaria.
“The merger may begin with effect from this financial year and the process will be completed within a maximum period of two years,” the document said.
The health ministry has also sought funds for the purchase and maintenance of ambulances, free medicines, anaemia control in children under five years of age and strengthening enforcement mechanism on drug control and food safety.

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