Budget expectations: Healthcare sector

21 Jan 2022 , 04:21 PM

“At ~Rs74,602cr, the budgetary allocation for healthcare in FY2022 dropped by 9.8%, if compared to the Revised Estimates for FY2021. The funds earmarked for healthcare, as a percentage of GDP and beds per 10,000 populations, continues to be lower for India against most developing nations. Given the ongoing pandemic, ICRA expects a sizeable increase in grants to the sector in the forthcoming budget. Higher allocation is also necessitated to enable the Government achieve its target spend of 2.5% of GDP on healthcare by 2025, from the current sub 1.5% levels.

With resurgence in Omicron cases, ICRA expects partial cost towards children’s vaccination and booster shots for the adult population to be a part of the upcoming budgetary allotment towards the sector.

To boost investments in the sector, tax incentives for private sector investments in modernising medical facilities and developing greenfield hospitals will be a welcome step. Further, considering the low doctors to people and nurses to people ratio (aggregate density of health workers is 23 per 10,000 population, which is significantly lower than that recommended by WHO), increased allocation towards training medical personnel, in addition to improving infrastructure in tier-2 and tier-3 cities, would be a favourable move.”

Source: ICRA

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