Monday 20 April 2015

India spends about one per cent of its gross domestic product (GDP) on public health, compared with three per cent in China and 8.3 per cent in the United States. In recent years the allocation for health care budget has been reduced owing to fiscal strain. Analyse the implications of this policy and also critically comment if it’s a prudent move to cut allocation to health sector to cut the fiscal deficit.

The recent report by WHO points out that in india families met almost 70% of their health expenditures on their own. A debilitating statistic pointed was india’s public financing for health care was only 1% of the world’s total where population contributes more than 16%. This amounts to widespread injustice when one quantifies the lives of humans on earth.

Implications of low expenditure on health have
widespread ramifications—
-widespread poverty
-inability to achieve MDG targets in MMR, control birth rate, mortality rate as a whole, infant mortality ratio, neo natal rate, malnutrition, hunger
-the poverty line being highly dynamic, any grave disease in family pushes a family on the border line to BPL, with no benefits being given to them a the poverty line remains static
-self expenditure restricts the consumerism and investment potential

Health should remain the foremost priority amongst all services being delivered. Diverting the finance from health to cut fiscal deficit is amounting to a crime, as it involves destitution and playing with the lives of millions of poor. Millions demand proper caring and timely medicinal providence. Right to health is still far away from discourse let alone the policies. The country should follow the example of US and china and make a rule not to allocate below a certain % of GDP for healthcare. This number should be way higher than 1%, in india’s case 3% for a start is minimum.

Ans2:

Answer:India with it’s favourable demographic dividend is boasting it’s future, but has done little to secure their health. India contains one-third of worlds malnourished children and doing poorly in health facilities. Recent budget cut from already constrained Health sector budget is an issue of concern. Despite notified by UN and WHO on their report, India failed to provide health service as affordable and available. Some Long term implication of reducing allocation because of Fiscal deficit are:

1. With decreasing funds allocation on health, Private hospitals and facilities are thriving and creating huge gap of Govt and private facilities. Critical areas like Health can’t be left on the hand of private sector as it will lead to exploitation of poors and unavailability in rural areas.

2. Reduction in health care budget will affect first the flagship programmes like AIDS/ TB programme. India has achieved commendable success so far but reducing the budget now may lead to increase in patient numbers and nullify the past efforts.

3. With young population rising, we need to provide better health care to keep labour force healthy which requires special attention in health sector.

4. Already India is spending only 1% of GDP on health which keeps it under-funded which leads to quack doctors in rural areas, lesser medical colleges, high maternal and infant mortality and un-institutional delivery. It is not a good precedent for India which aims for developed nation dream and achieving Millenium Development Goals in time.

All in all, Health is basic human right as per the Consitution and it’s states duty to provide health care for prosperous generations. India should focus more on PPP in health sector as it is impossible to keep private players at arm length. Also promotion for generic medicine, RSBY, Asha, Mid wife training centres, AYUSH like programme to achieve healthy India dream.

Ans3:

Healthcare services form the backbone of a country, along with education. Failure to deliver these effectively is bound to make other development initiatives ineffecient. A policy of reducing Healthcare budget can have the following implications:

1. Fall in education levels and quality:
Sick children, without adequate medical assistance, will frequently miss school and eventually drop out.

2. Fall in workforce productivity:
As a direct consequence of reduced education levels, the quality and hence productivity of the workforce will reduce. Even the educated workforce will face a dip in their quality.

3. Burden on the existing medical facilities:
With lower infusion of new facilities and doctors, the burden on the existing one will increase which in turn will further lower the quality of the available medical services.

4. Medical Industry:
The reduced budget will be taken as an unfavourable signal by the investors, who will now anticipate lesser cooperation and support by the Government and higher costs in the medical industry. Seen as an unprofitable sector, the private players will also start pulling out which will not just hamper the monetary economy but also the citizens.

5. Social and psychological impact:
A society where sanitation facilities are poor and health facilities inadequate, the people become demotivate and cynical. This can not only perpetuate crimes but also have a cascading impact on the generations to come.

Thus, to reduce the healthcare budget for balancing the fiscal deficit is an uneconomical proposition because:

1. The aforementioned ill-effects of reduced health budget
2. Lower health facilities would push up the health expenditure of people, reduce their savings, which will reduce capital flow in the economy driving down production and thus employment. To balance this, the Government will again have to spend and the very purpose of balancing the fiscal deficit will be defeated.
3. Poor health facilities will also hamoer India's international image, directly affecting the fund support it receives. Again, we would be tending towards a higher deficit in the presence of lower international investment.

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