Govt may set up fund to raise healthcare allocation

The 15th Finance Commission had recommended that India's combined public health expenditure be raised to 2.5 percent of the GDP by 2023-24.

The upcoming Budget may include a plan to create a fund under the "Pradhan Mantri" umbrella, amid a need to increase allocation to the healthcare sector.

Both the Centre and states will contribute to the fund, which is likely to focus on long-term and short-term priorities of the healthcare sector, Business Standard reported.

According to the report, the fund might spend 25 percent on primary healthcare and the rest on infrastructure, research, and development. It might also provide capital to the government's current schemes, such as Ayushman Bharat. The 15th Finance Commission had recommended that India's combined public health expenditure be raised to 2.5 percent of the gross domestic product (GDP) by 2023-24.

The health outlay by central and state governments in 2019-20 was 1.26 percent of the country's GDP, according to an assessment by NITI Aayog.

India spends 3 percent of its GDP on healthcare, against the global average of 8 percent, according to Kapil Banga, Assistant Vice President at ICRA. "ICRA expects a sharp jump in the allocation towards the healthcare sector in the forthcoming budget, to provide for the cost of COVID-19 vaccination," Banga said.