Big boost for the healthcare industry but many expectations remain unmet

A whopping 137 per cent increase in the healthcare budget seems to be quite promising for the industry. Experts also opine that a significant attention should be given to training, re-skilling, and knowledge upgrade of healthcare professionals.

Healthcare budget 2021 Reaction

Last year the nation was ravaged by coronavirus pandemic and it exposed paucities in healthcare ecosystem of India. Hence, the government has focused on strengthening the sector in the union budget 2021-22. Highlighting the significance of healthcare and well-being for country’s growth and development, this year’s budgetary outlay demonstrated an increase of 137 per cent as compared to that of previous year.

The allocation for healthcare sector in budget 2020 was Rs 69,000 crore. The government has proposed the budget outlay of Rs 2,23,846 crore for the sector in 2021-22. In addition to it, the budget allocation has been increased to Rs 2,23,846 crore in budget estimate 2021-22 as against this year’s budget estimate of Rs 94,452 crore.

A whopping amount of Rs 35,000 crore has been earmarked for COVID-19 vaccine in the upcoming fiscal. “Budget 21-22 seems realistic and constructive. The Finance Minister of India has showed her commitment towards the healthcare sector which required succor urgently,”

comments Dr. Alok Roy, Chair, FICCI, Health Services Committee and Chairman at Medica Group of Hospitals.

According to him, increasing access to pneumococcal vaccine for all states and the allocation of a whopping Rs 2,23,846 crore for the healthcare sector which is a rise by 137 per cent as compared to previous year will prove to be a major boost for the public health and pharmaceutical sector. “This will definitely strengthen the National Centre for Disease Control and will make India future ready for any further health crisis,” he adds.

Since last year India Inc. and especially the healthcare industry has been battling with COVID-19 and its aftermath. Hence, this year’s budget should be considered a blessing for healthcare. He opines, “Quite rightly, the budget has focused on health and well-being, infrastructural reforms, development of human capital and maximum governance. The very fact that government has put health as the first pillar shows that it has ensured economic well-being of the country too.”

Currently, the government is running a phased inoculation drive for coronavirus vaccines after approval of two vaccine candidates namely Oxford’s Covishield manufactured by SII and Bharat Biotech’s Covaxin which is for restricted emergency use. This drive is being considered as the largest vaccination drive across the world. Hence, a significant amount of focus and funding is required to make it a successful campaign.

Considering all these provisions, most of the experts are of the opinion that the healthcare budget which is almost double of the previous financial year is going to develop a holistic health infrastructure as well as strengthen the self-reliant India initiative.

“We have seen last year how the integration of private and public sector healthcare operations and collaborative model of healthcare delivery led to rapid scaling of efforts against pandemic. We are keenly looking at furthering such collaborations going forward,” said Meena Ganesh, MD & CEO at Portea Medical, a consumer healthcare brand.

Calling the budget as most anticipated one, Nilesh Aggarwal Director & CEO of, a healthcare learning platform said that the government has made right announcements as far as the budget allocation for the healthcare sector is concerned. It has also taken right measures related to infrastructure and capacity development.

Harshit Jain, MD and CEO of Doceree, an online health platform calls health budget as pragmatic, positive, and committed towards the growth of healthcare sector which needed a succor after an unprecedented virus outbreak last year.

“Various announcements and schemes are a step towards strengthening primary, secondary and tertiary healthcare in the country. Setting up of 15 Health Emergency Centres shows government’s intent to be future-ready to address any healthcare crisis. It is commendable that the government has put healthcare on the forefront putting focus on curative and preventive healthcare and wellbeing,” he tells.

In the Union budget, Rs 71268.77 crore has been allocated to the Ministry of Health and Family Welfare, as against Rs 65,011.8 crore allocated in 2020-2021. However, the budget was revised later and was increased to 78866 crores because of COVID-19. Let us understand how government is going to spend on the healthcare sector during this fiscal year.

Inside-article1-Healthcare budget 2021 Reaction

The 137 per cent hike is calculated by clubbing funds allocated to the Union Ministry of Ayush, Department of health research, nutrition, vaccination, finance commission grants to states for water-sanitation and health.

Launch of PM Atma Nirbhar Swasth Bharat Yojana

With the intent to strengthen the healthcare ecosystem, government has announced a new centrally sponsored scheme, Prime Minister Atma Nirbhar Swasth Bharat Yojana. It will be launched with an outlay of about 64,180 crores for over six years. This will develop capacities of primary, secondary, and tertiary care healthcare systems. It will also strengthen existing national institutions and create new institutions for detection and cure of emerging diseases.

The scheme is an extension to the National Health Mission which aims to provide accessible, affordable, effective, and reliable healthcare facilities in the rural and urban regions. Under the scheme, support will be given to 17,788 rural and 11,024 urban health and wellness centers. Integrated public health labs in all districts and 3382 block public health units in 11 states will also be set up under this scheme.

The scheme will establish critical care hospital blocks in 602 districts and 12 central institutions. It will also strengthen the National Centre for Disease Control (NCDC) and its 5 regional branches and 20 metropolitan health surveillance units. Further, it will expand Integrated Health Information Portal to all states and UTs to connect all public health labs.

Going further, the scheme will set up 17 new public health units and boost 33 existing public health units at various points of entry which is at 32 airports, 11 seaports, and 7 land crossings. It will also give way to 15 health emergency operation centers and 2 mobile hospitals.

Along with that, scheme will help in setting up of a national institution for One Health, a Regional Research Platform for WHO South East Asia Region, 9 Bio-Safety Level III laboratories and 4 regional National Institutes for Virology. According to Roy of FICCI, the scheme is a welcome move.

“This scheme intends to develop capacities of health care systems, develop institutions for detection and cure of new and emerging disease as the first step to boost rural health, and keep country ready for emergency handling of pandemic situations. The decision to set up health units, labs and institutions is creditable, but more might be required in a country where the patient doctor ratio is abysmally poor,” he comments.

Meena Ganesh of Portea also favours the scheme calling it as the key highlight of this year’s budget which intends to turn a curative healthcare ecosystem into a preventive one. According to her, the step is right with a strong focus on development of the diagnostic, research, and development sector as well as on boosting the emergency healthcare system.

“Many new integrated labs, primary health centers, hospitals and other medical facilities have been announced. We hope that various digital technology driven services such as home healthcare and telemedicine are also given adequate support under the National Digital Health Mission. Overall, the provisions seem to be quite promising, and we are ready to support the government in executing the plans related to healthcare transformation across India!” she claims.

Inside-article2-Healthcare budget 2021 Reaction

Adding to the comments, Shabnum Khan, Founder of 750ad Healthcare, a telemedicine platform told that India needs better healthcare, and this scheme will lead to the way. She says, “After dealing with a pandemic for over a year now, it was evident that the budget for healthcare needs to be expanded. The setting up of 17,000 rural and 11,000 urban health and wellness centers is a great step in this direction.”

Other announcement includes launch of Mission Poshan 2.0, which will curb high child mortality rate in India. Commenting on the announcement, Roy says that the move is praiseworthy, and it will be effective in preventing over 50,000 child deaths annually.

Meanwhile, an outlay of Rs 2,217 crore for 42 urban centers is to tackle air pollution, one of the deadliest pandemics which has affected mankind for years. He adds, “Overall, the proposals made in the Budget 21-22 would make quality healthcare accessible and affordable. The measures would also standardize healthcare infrastructure across the country. We now wait the on-ground implementation and operational details of the scheme now.”

Financial aid for healthcare startups

Health startup players are relieved with the budget both in the terms of sectoral announcements as well as ease providing measures on financial and taxation front. Commenting on the budget, Rishikesh Kumar, Founder and CEO Xtraliving, a fitness platform said that the prime focus of the budget is on fighting the pandemic by making the vaccine available to all.

According to him, it will subsequently build the right infrastructure to support good health and empower professionals with the proper knowledge and skills to help people. “These are right steps towards a fitter and stronger India. With the current technological advancements, we can be the hub of healthcare solutions for the world,” he says.

The allocation for telemedicine is Rs 45 crore this year. At large the focus on the healthcare sector is going to enhance the market for telemedicine. Earlier in pre-pandemic era, healthcare was slow in adopting tech solutions. However, the outbreak had a significant impact made by the innovative healthcare delivery practices such as telemedicine and e-diagnostics.

Shekhar Rawtani, Founder, Prescrip, says, “First paperless budget goes hand-in-hand with the vision of a truly digital India. From a healthcare’s perspective, we are pleased with allocations. It will give sectors the desired push towards addressing core concerns that we face at present.” The platform provides app-based solutions to set up e-clinics.

Another stakeholder and start-up founder Jitendra Chouksey of FITTR is of opinion that the budget hinges on augmenting economic recovery while laying emphasis on self-reliance. “Besides healthcare, the budget has given due importance to the start-up segment too.  The extension of tax holiday by one year, till 31st March 2022 on revenue as well as investment was much needed during these challenging times,” he says.

Bridging lacunae for gaps in healthcare sector

The budget gained applauses from the healthcare sector, but some expert also questions the intent of government behind these measures and suggest waiting for their implementation. Envisaging for the increased public expenditure on healthcare to 2.5 per cent of GDP, healthcare players are bit disappointed on this front as it is less than expectations.

The union budget has allocated health and family welfare Rs 71,269 crore. Adding to it, allocation for AYUSH and Health Research goes up to Rs 76,902 crore. This increase is of merely Rs 7,668 crore (2020 budget was Rs 69,234 crore) i.e 2.21 per cent of the total budget in contrast to 2.27 per cent for BE2020-21 and 2.47 per cent of 2020-21 revised estimates.

It clearly shows no significant growth in the spending. “When we look at figures, the allocation of healthcare budget is a very slight increase of 5.7 per cent to Rs. 67,484 crores as compared to the last year’s Rs 63,830 crores in my opinion. This is lesser than the target spending of 2.5 per cent of GDP on healthcare,” says Khan of 750AD Healthcare.

As per the expert analysis of Ravi Duggal, a sociologist and health researcher there was a hike of 23 per cent in the previous year’s budget estimates due to the pandemic. However, if we compare that hike with BE this year, it points out a decline of 10.85 per cent from the 2020-21 revised estimates. This decline of allocation is indeed surprising in the main health budget considering the extent of damage the pandemic has caused, he has pointed out in a commentary.

Experts also opine that a significant attention should be given to training, re-skilling, and knowledge upgrade of the healthcare professionals through digital mediums. “We are looking forward to the government to capitalise a highly successful public-private collaboration to cater to this need,” says Aggarwal of

Overall, experts feels that finance ministry has given an impression of massive expenditure by clubbing together allocations and by merging few schemes under Saksham Anganwadi, POSHAN 2.0, Mission Vatsalaya, and Mission Shakti. However, schemes such as PM Atma Nirbhar Swasth Bharat Yojana and allocation of Rs 35,000 crore for vaccination are much welcomed steps.

The budget therefore focuses on empowering the existing healthcare sector and building a robust research, development, and preventive healthcare infrastructure. But healthcare industry is still looking at the overall integration of all these facets.

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