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Health Expenditure Sees Nearly 73% Rise: Economic Survey

Central and State Government's budgeted expenditure on health sector reaches 2.1 per cent of GDP in 2021-22, against 1.3 per cent in 2019-20.

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During the last two years, as India along with the rest of the world faced the onslaught of the pandemic, Union Government’s key focus remained on providing a safety-net to the vulnerable segments of society as well as providing a coherent response to the health consequences of the pandemic, says the Economic Survey. The Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman tabled the Economic Survey 2021-22 in Parliament today.

The Economic Survey also highlights the ‘agile framework’ of policy noting that in 'an uncertain environment, the agile framework responds by assessing outcomes in short alternations and constantly adjusting incrementally' as 'the flexibility of agile improves responsiveness and aids evolution, but it does not attempt to predict future outcomes. The response of the Union Government to the global COVID-19 pandemic has been agile, strategic and pre-emptive. 

India’s health response to COVID-19

The Economic Survey states that India, the country with the second-largest population and a large elderly population, adopted a multipronged approach to COVID-19 response and management. These included:

- Restrictions/partial lockdowns

- Building capacity in health infrastructure

- COVID-19 appropriate behaviour, testing, tracing, treatment and

- Vaccination drive

Measures were taken to break the chain of transmission in terms of containment and buffer zones; perimeter control; contact tracing; isolation and testing of suspect cases and high risk contacts and creation of quarantine facilities. Preventive strategy changed in response to the changing situation based on real-time data and evidence. Testing facility in the country has increased exponentially. Tests for COVID-19 were made free in all Government Centers.  Rapid Antigen Test Kits for faster screening were introduced.  

The manufacturing capacity of N-95 masks, ventilators, personal protective equipment kits, sanitisers were ramped up in a mission mode. The Survey also highlights the massive infrastructure created for isolation beds, dedicated intensive care unit beds and supply of medical oxygen. To meet the exponential rise in medical oxygen demand during the second COVID surge, the Government engaged even Railways, Air force, Navy and Industry to work with the ‘whole of government’ approach.

In the fight against the Coronavirus, COVID vaccines emerged as the best shield against the disease to save lives and sustain livelihood.

COVID vaccination strategy

The Economic Survey highlights that vaccination is not merely a health response but is critical for opening up the economy, particularly contact-intensive services. Therefore, it should be treated for now as a macro-economic indicator. 

'The Liberalized Pricing and Accelerated, National COVID-19 Vaccination Strategy', was implemented from 1st May to 20th June 2021, observes the Survey. From 3rd January 2022, COVID-19 vaccine coverage has been extended to the age group of 15-18 years. Further, from 10th January 2022, Health Care Workers, Frontline Workers and persons aged more than 60 years with co-morbidities have been made eligible to receive a precaution dose of COVID-19 vaccine, on completion of 9 months or 39 weeks from the date of administration of the second dose.

The Economic Survey notes that the Indian National COVID Vaccination Program, one of the world’s largest vaccination programs, has not only supported the production of COVID-vaccines domestically, but it has also ensured free vaccines to its population, the world’s second-largest population. Union Budget for 2021-22 allocated Rs 35,000 crore for procurement of vaccines under the nationwide COVID-19 Vaccination Program. From 16th January 2021 till 16th January 2022, a total of 156.76 crore doses of COVID-19 vaccines have been administered, 90.75 crore first dose and 65.58 crore second dose. Vaccination at this scale and speed has enabled the swift revival of livelihoods, the Survey underscores.

The Survey highlights that India is among the few countries producing COVID vaccines. The country started with two made in India COVID vaccines. In line with India’s vision of Atmanirbhar Bharat, India’s first domestic COVID-19 vaccine, Whole Virion Inactivated Corona Virus Vaccine (COVAXIN), was developed and manufactured by Bharat Biotech International Limited in collaboration with the National Institute of Virology of Indian Counsel of Medical Research (ICMR). The ICMR funded the clinical trials of the COVISHIELD vaccine developed in collaboration with Oxford-AstraZeneca. COVISHIELD and COVAXIN have been widely used vaccines in India. Every month about 250-275 million doses of COVISHIELD and 50-60 million doses of COVAXIN have been produced.

Making it a technology-driven vaccination program, Arogya Setu mobile app was launched to enable people to assess the risk of their catching the COVID-19 infection. Co-WIN 2.0 (along with e-VIN), a unique digital platform, supported the real-time vaccination activities viz. registration for the vaccine, tracking COVID-19 vaccine status of every beneficiary, stocks of vaccine, storage, actual vaccination process, and generation of digital certificates, observes the Economic Survey.

Health Sector Expenditure

The Economic Survey mentions that although the pandemic has affected almost all social services, the health sector was the worst hit.  Expenditure on health sector increased from Rs. 2.73 lakh crore in 2019-20 (pre-COVID -19) to Rs 4.72 lakh crore in 2021-22 (BE), an increase of nearly 73 per cent. 

The Survey further states that in addition to the National Health Mission, Union Budget 2021-22, announced Ayushman Bharat Health Infrastructure Mission, a new Centrally Sponsored Scheme, with an outlay of about Rs 64,180 crore in the next five years to develop capacities of primary, secondary and tertiary Health Care Systems, strengthen existing national institutions, and create new institutions to cater to detection and cure of new and emerging diseases. Besides, Union Budget 2021-22 provided an outlay of Rs 35,000 crore towards COVID-19 vaccination.

The National Health Policy, 2017 envisaged to increase Government’s health expenditure to 2.5 per cent of GDP by 2025, reiterates the Economic Survey.  It says that in keeping with this objective, the Central and State Government’s Budgeted expenditure on the health sector reached 2.1 per cent of GDP in 2021-22, against 1.3% in 2019-20.

National Family Health Survey-5 (NFHS-5):

As per latest the NFHS-5, social indicators such as Total Fertility Rate (TFR), Sex Ratio and health outcome indicators viz. Infant Mortality Rate, under-Five mortality rate, institutional birth rate have improved over the year 2015-16, observes the Economic Survey.  According to the Survey, NFHS-5 shows that not only services are reaching the public, but the intended outcomes have also improved.

All child nutrition indicators have also improved at the all India level. Under-Five Mortality Rate (U5MR) has declined from 49.7 in 2015-16 to 41.9 in 2019-21.  IMR has declined from 40.7 per 1000 live births in 2015-16 to 35.2 per 1000 live births in 2019-21.  Stunting has declined from 38% in 2015-16 to 36% in 2019-21.  Wasting has also declined from 21% in 2015-16 to 19 per cent in 2019-21. And, underweight declined from 36% in 2015-16 to 32% in 2019-21. 

Latest NFHS-5 shows that TFR, an average number of children per women, has further come down to 2.0 in 2019-21 from 2.2 in 2015-16.  The Survey highlights that the TFR has even come down below the replacement level of fertility (2.1 children per woman) in the country.

The Sex Ratio, the number of females per 1000 males, in the total population has risen from 991 females in 2015-16 (NFHS-4) to 1020 in 2019-20 (NFHS-5).  More importantly, the sex ratio and birth of female children per 1000 male children born in the last five years, has grown from 919 in 2015-16 to 929 in 2019-21.

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economic survey Health Expenditure nirmala sitharaman