Low Budget allocation to healthcare: Finance Secretary says it is primarily States’ responsibility

Finance Secretary T.V. Somanathan on Monday said healthcare is primarily the responsibility of the States, amid suggestions of the budgetary allocation to the sector still being low at 1.3% of GDP.

He said the Centre provides for some “cross-cutting health infrastructure” and also spends on the Pradhan Mantri Jan Arogya Yojana, which helps people from lower strata of the society to access healthcare.

According to the budget proposals for FY23, the Government is planning to spend about ₹83,000 crore on healthcare, the same as it did in FY22, even as the pandemic is still on.

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At a post-Budget interaction of the industry with Finance Minister Nirmala Sitharaman, lobby grouping CII president T.V. Narendran said the spending on healthcare, though higher than in the past, is 1.3% of GDP, while the expectations are that the government should spend over 3%.

“The figures have to be seen in the context of it being primarily a state government responsibility,” Mr. Somanathan said.
“Anytime we discuss targets on the percentage of GDP to be spent on various sectors such as health, education, defence — we have to remember that any increases there will require increases in the tax-to-GDP ratio and I request the cooperation of the industry to increase that also,” he added.

He said the Government’s emergency credit-linked guarantee scheme announced following the pandemic has also given a ₹50,000-crore window for credit supply to the healthcare sector and asked the corporate sector to take full advantage of it.

Finance Minister Nirmala Sitharaman said healthcare needs a lot more attention not just from the government but also from the private sector.