Government announces Modicare, but can it afford it?
What's the story
As was largely expected, PM Modi's government announced a people-friendly budget, in a bid for getting re-elected to office in 2019.
The biggest populist take-away is the flagship health-care programme announced by FM Arun Jaitley, popularly being referred to as Modicare.
As government inches towards providing half a billion citizens free health insurance, is it feasible?
Let's have a look.
Current situation
What is the state of health-care in the country?
India spends only 1.4% of its GDP on public health, amongst the lowest in the world. This leads to cataclysmic expenses that push 7% of the population into poverty every year.
Moreover, access to health-care is a major problem: public hospitals are few, under-funded and under-staffed.
So, Indians have to approach private hospitals that cost a bomb, beginning the cycle of debt.
Budget proposal
Now, what has FM Jaitley proposed?
In this country where people still rely on village quacks and ascetic healers, FM Arun Jaitley has proposed an ambitious National Health Protection Scheme (NHPS).
This aims to provide insurance cover of up to Rs. 5L/yr for secondary and tertiary health-care to about 50cr beneficiaries.
Moreover, government has proposed to set up 1.5L Health and Wellness centres, providing free diagnostic services and essential drugs.
Funding
But, does the government have funds to pull it off?
Jaitley increased health's budgetary allocation by 11.5% from last year, to Rs. 52,800cr.
Further, Modi's NHPS will cost an estimated Rs. 110bn. Of this, centre will reportedly contribute Rs. 70bn, with states providing the remaining funds.
Presently, government allocated just Rs. 20bn for it. More funds will be available as and when required.
Critics have raised concerns over how government would raise this money.
Infrastructure
Moreover, does our infrastructure support this massive scheme?
Further, government's Rs. 1,200cr for 1.5L centres comes to Rs. 80,000 per sub-centre.
Presently, they suffer from poor infrastructure, under-staffing and lack of equipment/medicines.
Besides, as of March'17, only 11% met the Indian Public Health Standards. About 4,000 centres didn't have health workers, 20% didn't have regular water-supply and 23% electricity.
How will these centres meet the basic requirements with such meagre funds?
Significance
So, what does this tell about the scheme?
Ironically, Jaitley made a similar announcement in 2016 Budget.
Then, the Rashtriya Swasthya Bima Yojana (RSBY) was to give a cover of Rs. 1L for one-third population. The amount allocated was Rs. 15bn. This scheme never took off.
This raises questions about NHPS' credibility.
It will be launched from October 2, 2018. But, with elections looming, the speed of implementing this scheme is crucial.