Mumbai: "India's economy rides on the health of its people", wrote K. Srinath Reddy, president of the Public Health Foundation of India and former head of cardiology at the All India Institute of Medical Sciences, a few days before the Union Budget for 2021-22 was presented. Finance minister Nirmala Sitharaman began her budget speech on February 1 with a discussion on health. Budget 2021-22, presented during the COVID-19 pandemic, tried to look at the healthcare sector differently, by combining several budget heads to lay out a health blueprint. The outlay for 'Health and Wellbeing' was Rs 2,23,846 crore ($30.6 billion), which Sitharaman said represented a 137% increase over the previous year's budget outlay of Rs 94,452 crore ($13 billion). An outlay of Rs 64,180 crore ($8.7 billion) over six years was announced for the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana (Prime Minister's Self-Reliant Healthy India Scheme; PMASBY). Budget 2021-22 also allocated Rs 35,000 crore ($4.7 billion) for COVID-19 vaccination.

But is the money allocated for health, and the vaccination effort, enough? The Union Budget exercise was supposed to be an opportunity to reimagine and reinvent India's healthcare system, using the COVID-19 pandemic as a trigger. Do the budget allocations mean India has embarked on that journey? How could India improve access to healthcare for all? Are there fundamentally new healthcare models that India should be looking at? To find out, we spoke with Reddy, and Yamini Aiyer, president and chief executive of the Centre for Policy Research.


Edited excerpts:

Ms Aiyer, your takeaways on the Union Budget's allocations for health?

Clearly, the COVID-19 pandemic and the resultant nationwide lockdown brought healthcare front and centre into the public discourse, something that has long been needed. As a consequence, the finance minister began her budget speech with a discussion on health. This was unprecedented. Even the finance minister's taking a holistic view, to focus on public health right from primary healthcare, was not just limited to the announcement of the new PMASBY scheme. India's COVID-19 response has highlighted just how weak our public health architecture is. It's not just about having more doctors and more physical infrastructure. It's also about the overall public health capability, including health workers, epidemiologists, disease surveillance, etc.

So that holistic emphasis while announcing the PMASBY was a very positive step in the right direction. But ultimately, all government work needs money, and that's where the budget disappointed. There's no doubt that the pandemic and ensuing lockdown placed unprecedented economic pressure on the budget. Revenues were falling, while expenditure was high. So there would inevitably be limited resources available for a new expansive scheme in this financial year, or even in the next financial year. But a long-term agenda and a commitment, at least, in the budget speech of increasing expenditures for health would have been welcome. Instead, what we got was a claim that health expenditures have increased significantly. But the numbers do not add up. The new scheme doesn't have a line item in the details of the expenditure budget. Much of what was grandly announced is actually a piecing together of different health, water and sanitation allocations, finance commission grants, etc. These are all connected to the health ecosystem, of course. But if India was actually moving towards an integrated approach to health, something genuinely radical like merging of ministries and schemes would have been good, but this did not happen. Different allocations were combined to create a grand sounding number. That was disappointing.

What the budget did do was give the PMASBY a mid-term, six-year commitment of Rs 64,180 crore. That approach is interesting, not because of the announced allocation, which is actually very low at less than Rs 10,000 crore ($1.4 billion) a year, but because introducing long-term thinking into budgeting for healthcare is important. We should bear in mind that this has not just been a year about COVID-19. The pandemic did put a lot of pressure on health expenditure, but it also had an impact on the ability of India's health system to respond to the regular set of disease pressures it has to cope with. What has been the impact of that? We perhaps needed to think about health resources from that point of view because of its larger economic consequences. About 50% of Indians are vulnerable to economic shocks. One economic shock linked to healthcare will push them back into poverty.

Dr Reddy, you had argued for a fairly expansive and budget exercise focused on funding required for areas like healthcare access, rural and urban health. You had also spoken of such increases in health funding being matched by corresponding increases in taxes on items like alcohol and cigarettes, even luxury items. Having looked at both sides of the equation, what do you think about Budget 2021-22 overall, and also in terms of what you had argued for?

When you're driving a car, there's usually a label in the rear-view mirror which says 'objects in the mirror appear closer to you than they really are'. So in terms of the initial look at the budget, there certainly appeared to be a very large allocation for what was bundled together as health. I have no dispute with the idea of combining allocations for many of the determinants of health like water, sanitation, pollution control or nutrition along with health, because we ought to look at the wider picture when it comes to health, and not just at healthcare service delivery. I think the finance minister has brought these together appropriately, and that's a good public health perspective.

But we need to look at where the money is actually going to come from for these allocations, and how it has been distributed. The 15th Finance Commission also submitted its report and its allocations, coinciding with the Union Budget. The Finance Commission has actually identified a number of deficiencies in the health system, in terms of both rural and urban primary healthcare. It has asked for better regulation of the private sector, has pointed out that India's health surveillance systems are in disarray, and particularly lamented the state of India's urban health services. The Finance Commission has actually allocated money in a sectoral manner for the first time, for health in particular, for strengthening the public healthcare system right from the block and district level up to the municipality level and public critical care hospitals. That has helped to bolster health allocations presented in the union budget.

Whereas until recently, India has been focusing attention on how the private sector can play a larger role while letting the public health system get weakened, the Finance Commission has actually helped to strengthen the public healthcare system.

The Finance Commission has also pointed out that non-communicable diseases have been long neglected and asked for greater attention be paid to many such areas where there has been considerable lacunae. But the allocation itself within the health ministry has been relatively on the lower side. The National Health Mission (NHM) has received only about a 9.6% increase. The Indian Council of Medical Research and AYUSH [Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy] have received a slightly better allocation. But the Pradhan Mantri Jan Arogya Yojana (PMJAY) allocation has stayed the same. Partly because of COVID-19 and partly because they could not get accredited hospitals in second- and third-tier cities to deliver health services, the PMJAY scheme has not really taken off. We need to see how best this scheme can be extended, not only in terms of more hospitals that can be accredited, but how it can link better with the NHM and provide care and coverage for outpatient care and medicines, so that a good deal of out-of-pocket expenditure can be addressed. Even the NHM has neglected urban health so far, and that needs to be revived. The impetus for that will now come from what the Finance Commission has recommended.

The PMASBY is being positioned as a centrally-sponsored scheme, which means both the Centre and states will have to contribute to that. Whether that money is coming from the Finance Commission's allocations, or whether it is a separate allocation has not been clarified in the budget.

The PMASBY is an excellent scheme which needs to be implemented. There's great scope for strengthening the public healthcare system and for bringing in the determinants of health, like nutrition, water, sanitation and pollution control as well. The vision is wonderful. I hope the execution will also follow suit.

Dr Reddy, the vision for health and wellness translates to over Rs 2,23,000 crore. Is that a direction-setting figure that will fundamentally change the way India looks at health? Or is the scheme just an aggregation of various budget heads?

We really need to look at development in an integrated fashion, and not merely in terms of some of the budgetary allocations. It ought to happen at the ground level, not just at the level of ministries coordinating with each other.

One of the good things that the Finance Commission has done is that the money that is being allocated for health is going to local bodies, both village level and urban local bodies. If local bodies have an opportunity to govern how this money is spent, [then] there's a much greater opportunity for convergence between the various development sectors.

Therefore, this broader vision of integrated development is something we must pursue, while definitely looking at efficient and equitable health service delivery as well. If we actually take that particular roadmap forward, then we have a great opportunity to improve the efficiency and equitable character of our health system.

Ms Aiyer, even areas like defence, where there was a clamour for increasing expenditure, did not see greater allocations, except for pensions and capital expenditure. This reflects the overall state of the economy, which is weak. The revenue side has been particularly hit by COVID-19. So are these budgetary allocations the best India could do for healthcare? What else could have been done, because over the next couple of years, at least, we will have to look for newer ideas and ways to fund critical requirements.

In terms of the macro-fiscal picture, it was expected that this year would see a significant fall in revenue. But actually, the fall in revenue per se in terms of net tax revenue hasn't been that much because of buoyancy from excise duties for petroleum, etc. Where revenue really fell was in disinvestment receipts. And this goes back to a larger problem of bad budgeting and bad fiscal management where, over the last few years especially, as revenue projections versus revenue-collection capability of the government started falling, expenditures remained at an even keel. The government was always banking on its ability to try other things, like disinvestment, to make up for its committed expenditures. And because it has consistently failed to do so, its fiscal room was constrained. So this was not actually about COVID-19. It was bad fiscal management that was responsible for bringing us to a place where, when we needed to be fiscally expansionary, we were unable to.

In that context also, if you look at the overall change in budget expenditures, the bulk of the increase in expenditures by about Rs 4.5 lakh crore ($61.8 billion) as a consequence of COVID-19 was really in subsidies. The change in health expenditure accounted for only about 4% of the total expanded expenditure for this financial year [2020-21]. If you look closely at what the focus on COVID-19 did to health budgets for this year, you'll see that the emergency COVID-19 response plan got the bulk of expenditure, while other routine aspects of the health system broke down, leading us to a place where in fact more focus on expanded health was necessary. So when it comes to addressing the health as well as economic fallout of COVID-19, India needed to adopt a far more expansionary fiscal stance for the year ahead, and that has not been the case. The emphasis is on capital expenditures. Perhaps the government was expecting that India has exited from the crisis mode of COVID-19 much faster than what the reality is. So, no doubt, a lot more money was needed.

But another aspect is that fundamentally health is a state subject, and here the role of states as well as, very crucially, the role of local governments becomes very important. The Finance Commission grants for local governments for health is a very welcome step. Traditionally though, both the central and state governments have been careful to ensure that they do not give money to local governments even when the Finance Commission has allocated funds for panchayats and municipalities. So there has to be a lot more pressure, from the intellectual community as well, on pushing for the importance of a decentralised approach to health service delivery. Because ultimately India will only have an integrated health system, and one that is accountable to people, when it is delivered at the level at which it should be delivered, which is at the local government and state level, with the Centre playing a regulatory and monitoring role.

Dr Reddy, has enough money been allocated for vaccines? What more needs to be done?

Clearly the government has decided that there are two categories of people who will need to be protected from COVID-19 first. There is the essentiality criterion, in which health workers and other frontline workers considered essential would be protected. Then come people who are more vulnerable to COVID-19: the over-50 age-group, irrespective of whether they have diagnosed comorbidities; those under-50 with diagnosed comorbidities. Now, it's very clear that the Rs 35,000 crore that has been set aside for vaccination may not be adequate to cover all of India's population. But so as long as the resources are directed to cover these two groups--and the finance minister has said that 'if more money is required we shall put that money in there'--then the Rs 35,000 crore would be a reasonable investment to look at for the next few months.

The other vaccination priority, which has not been listed specifically, is if new hotspots emerge in India, or if mutant forms of the COVID-19 virus emerge and become a major threat in terms of erupting infection rates. In these cases, we may have to divert some of the vaccines there to quickly control the spread in that particular area. So vaccine requirements may have to be reassessed over the next three-four months. Vaccine availability will also become clearer over the next three-four months.

Ms Aiyer, what are the lessons from the COVID-19 crisis going forward? For instance, if you were to work on Budget 2022-23 and factor in the element of the unpredictable, how would we do it differently?

Pandemics are going to be a reality. COVID-19 has certainly been a wake-up call for governments across the world, including India. These disasters will hit every now and then. Therefore India should have a pandemic management plan, and that also means we have to think very differently about the national disaster management process itself. Why did we need to invoke laws that belonged to the 18th century? We have to think about the fact that the Disaster Management Act, 2005 itself is better aligned for dealing with natural disasters, rather than health-related pandemics. So there's a whole set of governance and legal issues that India needs to start taking seriously, and develop a pandemic management plan to prepare for the future.

Many people are hopeful that the consequences of a pandemic that affects all citizens--not just the poorest as with many other infectious diseases in India--will create pressure for a renewed dialogue on quality universal healthcare which is equitable. The political discourse on health is now actually reduced to vaccines, whether vaccine distribution is linked to where elections are approaching, whether free vaccines will emerge, rather than a political discourse on what it will genuinely take to strengthen the public health system. That's disappointing.

COVID-19 has impacted the poor far more significantly than all of us who are able to use Zoom and manage our lives. Informal sector workers have suffered immensely. The sort of economic support that the government could have, should have, ought to have provided has been minimal. The top 10% have done just fine, while everyone else is going to take a long time to recover. We should, as a collective community, as citizens of this nation, reflect and hopefully push harder to build a political demand for high quality healthcare for all Indians.

Dr Reddy, where does India stand today in terms of COVID-19 numbers? Even without a vaccine, the lower numbers of cases are bringing confidence back in the economy, the stock markets are doing well, and things seem to be returning to normal to some extent. How should we be using these falling COVID-19 numbers to build on?

Clearly there are a number of positive trends on COVID-19 in India, right from the case count to test positivity rates and daily death counts coming down--a better marker of the disease burden. Hospitals are no longer crowded with patients clamouring for beds. So we definitely are seeing a downward trend nationally. This is not really a surprise, as many westerners are projecting, because apart from the younger median age in India, two-thirds of India is rural. Viral transmission is going to be slower in less dense rural areas, with people living and working in more open spaces, and having much lower mobility.

The real threat lies with the mutant strains of COVID-19. If we start seeing a larger number of such cases, then we'll have to take further measures. I don't think there will be a need for a national lockdown, or even a regional or state-wise lockdown. But, we have to maintain our vigilance.

There is a good opportunity to open up the economy, both in terms of employment and particularly in terms of schools. I am very concerned about the inequities created by school closures, particularly for poor children who are unable to cross the digital divide. The divide is not only for rich versus poor, but there's a gender divide also. If there's one smartphone in the family, the boy gets it, and not the girl. So we do need to reopen schools, with caution.

One clear lesson is that, even without vaccines, the public health measures like preventing super-spreader events, wearing masks and practising hand hygiene have really succeeded and therefore we must continue these, even while we're waiting for vaccines.

We must also maintain vigilance to see how our health surveillance systems improve. Now, there is a concerted effort through the new central scheme and other measures to strengthen our surveillance systems, right from the block-level. Our overall public health system capacity has to increase as well. If you want to stimulate the economy, create employment in the health sector. Immediately double the number of accredited social health activist (ASHA) workers and auxiliary nurse midwives. This will create more employment on the frontlines and for women. These positions don't need four or five years of medical training.

Ms Aiyer, how do we make the government more accountable on health, and for our health?

Adding to what Dr Reddy said about school closures, my colleague Jishnu Das has done some important work looking at the impact of schools being closed after the earthquake in Pakistan for a mere six or eight weeks. The kind of learning loss students had--particularly at the primary level where the foundation is laid--over the course of their school trajectory was so significant that they never actually caught up. And now, schools have been closed effectively for an entire year. We need to not only reopen schools sensibly and quickly, but also to have a pedagogy plan that ensures that students who have not been in school can catch up and get back to curriculum level.

India already had a challenge of 50% of children who finished five years of schooling being barely able to read a grade II text. I fear that the loss of learning is going to be so vast that we may end up having a serious challenge on our hands if we don't plan for it well and effectively.

In terms of accountability, one of the positive consequences of what has been a very dark and difficult situation for most Indians is that the realities of the weaknesses in our health system, and the cost of this, are now visible to all. A big challenge is the breakdown of trust between citizens and the public health system, and what it can deliver. This is why, perhaps, the demand for healthcare does not convert itself into a political demand. But the fact that public health measures like wearing masks have worked, and that those who have been able to access the public health system have received care, opens up the possibility of bridging that trust gap.

So if we can build up a political discourse that focuses not just on the failures of India's health system but on what the health system can deliver when it mobilises, then perhaps we can bridge that trust gap. That will create a context in which the voter can genuinely ask for something that they know politicians will and can deliver. I think that's what will help move the debate on the politics of health in India going forward.

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