Gujarat 'neglects' healthcare: Budget down from 5.54% to 4.98% despite 8% policy plea

By Mahender Jethmalani* 
The Gujarat Finance Minister recently presented the state’s annual budget of Rs 2,27,029 crore for 2021-22. The budget for next financial year indicates an increase of Rs 22,003 crore (10.73%) from the revised estimates of 2020-21. The lockdown impact is quite visible on the expenditure budget of 2020-21, as the revised estimated expenditure would be Rs 2,05,026 crore, down by Rs 12,261 crore against the budget estimate of Rs. 2,17,287 crore in 2020-21.
The Gross State Development Product (GSDP) of Gujarat would register growth of a mere 0.57% in 2020-21. The advance estimate for GSDP in 2020-21 is Rs. 16,58,865 crore. Hence, the fiscal space available as percentage of GSDP with the state is around 12%.
The state would spend around Rs 77,137 crore on non-development heads. This includes Rs 27,922 crore on payment of interest on accumulated debt, Rs 24,887 crore for paying the pension to state’s retired employees, and Rs.24,330 crore for repayment of debt. Thus, around 4.1% of the GSDP would be spent for non-developmental activities, and the state would be left with just 8% of GSDP for running the state’s development and welfare programmes.
Interest, Pension and Debt Payment (IPD) account 33.98% of state’s expenditure. The percentage share of IPD was 30.63% in 2019-20, which will be around 33.98% in 2021-22. The expenditure for IPD will keep increasing over the years from now on due to accumulated public debt, increasing pension bill and repayment debt on accumulated debt. On the whole, the expenditure for social sector development has been pegged at 32.54% in the state’s total expenditure.

The social services include education, health care, nutrition, water and sanitation, labour welfare, welfare of socially disadvantageous groups, social security, housing and urbanization, sports, technical education, art and culture etc. The state needs to make higher public provisioning for the development of social sector to enhance the quality of life and improve social development indicators of infant and maternal mortality, malnutrition, and quality education level.
The state has earmarked 10.73% of budget outlay for general education – which includes elementary, secondary, higher education, college and university. General education does not include the budgetary expenditure for professional, medical, technical, engineering, agriculture universities, and management studies aided by the state budget.
The budget outlay for urban development is 4.98% of state’s total expenditure in 2021-22. The state provides grants to all urban local bodies (ULBs) for basic amenities development.
The budget outlay for the welfare of scheduled tribes (STs), schedules castes (Scs) and other socially marginalized groups is 2.13%. 

The expenditure for social welfare includes scholarships, education support, assistance for livelihood and others. The budget outlay for social security and welfare is 1.08%. The schemes directed at providing social security include widow pension, old age pension, assistance to people with disability, etc.

The budget outlay for water and sanitation is 2.11%.

Healthcare

The budget outlay for nutrition is 1.62%, which includes such schemes like Integrated Child Development Scheme (ICDS), Midday Meal (MDM) and Pradhan Mantri Matru Vandana Yojana (PMMVY), as also nutrition to adolescents girls, lactating and pregnant women. The state needs higher allocation for nutrition services for the children accessing the anganwadi services to reduce the prevailing malnutrition among the children below six years of age.
The pandemic has exposed the state’s healthcare services capabilities to address the health care emergency like Covid-19. The state’s investment for augmenting the public healthcare systems is not substantial, and whatever investment being made is in urban areas with focus on tertiary care. The public healthcare system in rural areas is characterised by deficit of doctors and specialists. Therefore, people in rural areas have to depend upon the private health care providers for the treatment.
Despite the prevailing pandemic conditions, the budgetary expenditure on healthcare and family welfare services is estimated to increase by a mere Rs 72 crore to Rs 11,304 crore in 2021-22. Notably, the healthcare expenditure also includes medical college education and health insurance (Ma Amrutam).

The revised budget expenditure for healthcare in 2020-21 would be Rs 11,232 crore against the budget estimates of Rs 11,225 crore. It seems that the state did not incur any additional expenditure on health emergencies on account of Covid-19, one reason why it made additional expenditure of just Rs 7 crore.

In fact, the percentage share on healthcare services has been declining. It was 5.54% in 2018-19, which came down to 4.98% in 2021-22.
This despite the fact that the National Health Policy (NHP) 2017 recommended that states should allocate 8% of the budget outlay in the state’s total expenditure from 2020-21 onwards for better and affordable health care services. The Gujarat healthcare budget in percentage terms is far below the NHP-17 recommendation; on the contrary the budget on healthcare is declining in percentage terms as well.
The per capita expenditure on healthcare was Rs 1,585 in 2019-20, while it has been proposed to be Rs 1,709 in 2021-22, though it should be around Rs 3,300 for reducing the out of pocket expenditure on healthcare. 

The public healthcare services in rural areas is affected by shortage of doctors and specialist at Public Health Centres (PHCs) and Community Health Centres (CHCs), which compels the poor to access healthcare from private healthcare providers by shelling their lifetime hard savings.

Socially disadvantageous groups

The allocation for the welfare and development of the state’s 15% STs and 7% SCs has been put at 6.37% and 2.33%, respectively. The expenditure for the socially disadvantageous communities indicates under-spending of the budgeted amount to the tune of Rs 1,538 crore (10.9%) for tribal development under the Tribal Sub Plan (TSP) and Rs 534 crore for STs (9.90%) under Special Component Plan for Schedule Caste (SCP).
The under-spending of 10% the budget outlay is substantial budgetary resource for the development of STs and SCs. These social groups have poor human development indicators. The tribal areas face deficit in basic infrastructure facilities, especially healthcare. Healthcare services in the tribal areas are without doctors. Education institutions are without teachers. Not without reason, the tribal areas witness out-migration in search of livelihood in urban areas.

The TSP budget should be re-prioritized for the welfare of the tribal people and the development of the tribal areas. There should be monitoring mechanism to check the under-spending of budgetary resources. The budget outlay should ensure more direct benefits to the underprivileged sections, even as developing the basic amenities related to drinking water, education and health care.
The infrastructure development expenses should be incurred from the general budget. In the present planning for TSP and SCP, the focus has been to spend more on notional expenditures or large infrastructure development. Such essential expenditures, therefore, should be accounted for under the general budget.
---
*With Pathey Budget Center, Ahmedabad