Budget 2018: Central Government plans to increase health spending by 11 percent 

New Delhi, Jan 18: The Central Government is planning to increase its public health spending by 11 percent in the upcoming Union budget, which will be present by Finance Minister Arun Jaitley on February 1 around noon.

The move to expand the public health spending is after rejecting Union Health Minister JP Nadda’s demand for a much bigger increase to ramp up disease control, the Reuters news agency reported quoting to government sources and documents.

The Union Health Minister sought a “bare minimum” budget of nearly $10 billion for the financial year 2018-19 – 33 percent higher than last year – in a letter to the finance minister on Nov. 26, which Reuters has reviewed.

JP Nadda argued the funds were needed for expanding vaccination coverage and free drugs distribution and also to ward off a growing threat of non-communicable diseases, such as cancer and diabetes, which killed 6 million people in the country in 2016.

The request of Health Minister was not approved: the health budget is expected to rise by 11 percent to $8.2 billion, three government officials told the news agency. They declined to be named or be identified further as the discussions were confidential.

Prime Minister Narendra Modi’s government last year set a target of raising annual health spending to 2.5 percent of India’s GDP by 2025, from 1.15 percent now – one of the lowest proportions in the world.

The health budget this year will put that pledge at risk.

On the last financial year, the Central government concentrated to overhaul the public healthcare system. It capped prices of several medical devices to help the poor, ramped up screening of non-communicable diseases and, on top of that, also raised the federal health budget by more than a quarter.

But the health budget increase for 2018-19 will be lower as the government’s finances are stretched by slowing economic growth and tax collections that have lagged under a new sales tax regime, the officials said.

In recent months, the finance ministry has said it wants to boost spending on sectors such as infrastructure, including ports and roads, to boost economic growth. That, along with the need to stick to fiscal targets, means that the budget for other sectors will be squeezed.

India’s overburdened health system remains plagued with an acute shortage of government hospitals in rural areas. In 2016, more than 1 million children died before turning five, the highest number for any nation in the world, a United Nations report said last year.