Health Spending gets a Special Fund from the centre

The government is set to create a special fund that doesn’t lapse at the end of a financial year, the decision was taken at a Union cabinet meeting on Wednesday.

An official statement elaborates the idea, which is to earmark specific funds in a non-lapsable way for centre run healthcare schemes, including those that are meant for giving free healthcare access to 500 million people under Pradhan Mantri Jan Arogya Yojana. Regional imbalances in providing tertiary healthcare under Pradhan Mantri Swasthya Suraksha Yojana will also be included within the fund for their correction. The fund will also be used for emergencies, disaster preparedness and for any future scheme that aims at improving health outcomes.

With the intent to raise about an extra Rs.11,000 crores annually for healthcare needs of rural and below poverty line families, the government in Union budget for FY19, expanded the “3% education tax levied on personal and corporation tax” to a “4% health and education cess.” Health ministry will handle the new corpus.

With the pandemic hitting the whole world last year, it made the government realise the importance of a better healthcare system within the country and therefore, health spending was a key feature of the union budget for FY22, presented by the finance minister Nirmala Sitharaman on February 1st. The Modi government expanded the health budget from Rs.94,492 crore in the year ending March 2021 to Rs.2.23 trillion in FY22.

According to the statement, better health improves the economy of a country. Since, better health improves productivity and prevents loses due to premature deaths, prolonged disability and early retirement. Better health also has a direct impact on scholastic achievements, productivity and income.

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