06 Feb 2021

Healthcare in Budget 2021: COVID vaccination would require more funds

healthcare-in-budget-2021-covid-vaccination-would-require-more-funds

The pandemic year has brought the healthcare sector to prominence like never before and the need to make it robust than ever. The FM has allocated INR 35,000 crores toward vaccination development spends and is willing to allocate more if the need arises, which is a welcome step.

India currently offers two vaccines and has begun a national vaccination campaign against COVID-19, but also began offering the vaccine to over 100 friendly countries as a goodwill measure. Two or more vaccines are being developed by the country in partnership with the private sector and national research labs.

Sitharaman announced a 137 percent increased allocation for the healthcare sector – from INR 94,452 crores to INR 2,23,846 crores in 2021-22. However, the increased allocation has also covered the outlay for nutrition, drinking water, and sanitation.

The most welcome measure was the INR 35,000 crore provisioned for COVID-19 vaccines, a one-time spend, and the promise that any additional funds required for COVID vaccination would be made available. However, there would certainly be a need to have more funding as the current allocation on a per capita basis is only INR 270.

Government intervention to ease the COVID crisis, including the 5 ‘mini budgets’ last year and all the relief measures announced by the Government and the Reserve Bank of India so far were to the tune of INR 27.1 lakh crore, which translates into 13% of GDP.

The six-year project, PM Aatmanirbhar Swasth Bharat Yojana, with an outlay of INR 64,180 crore would certainly give an impetus to improve the health infrastructure and capacities at primary, secondary, and tertiary care. Some of the major interventions proposed include:

  • Support to 17,788 rural and 11,024 urban Health and Wellness Centers
  • Setting up integrated public health labs in all districts and 3,382 block public health units in 11 states
  • Establishing critical care hospital blocks in 602 districts and 12 central institutions
  • Strengthening of the National Centre for Disease Control (NCDC), its regional branches, and 20 metropolitan health surveillance units
  • Expansion of the Integrated Health Information Portal to all States/UTs to connect all public health labs
  • Operationalization of 17 new Public Health Units and strengthening of 33 existing Public Health Units at Points of Entry, that is at 32 airports, 11 seaports, and 7 land crossings
  • Setting up of 15 Health Emergency Operation Centers and 2 mobile hospitals
  • Setting up a national institution for One Health, a Regional Research Platform for WHO Southeast Asia Region
  • Bio-Safety Level III laboratories and 4 regional National Institutes for Virology


Yet another welcome measure was the proposal to increase the permissible FDI limit in insurance companies from 49% to 74%. This would help health and life insurance companies to seriously explore and invest in the country.

The budget also proposed to make available the locally made Pneumococcal Vaccine across the country to save more than 50,000 child deaths annually.

National Research Foundation (NRF) announced in 2019 -  NRF outlay will be 50,000 crores, over five years. It will ensure that the overall research ecosystem of the country is strengthened with a focus on identified national-priority thrust areas.

Other notable measures in Healthcare included the introduction of the National Commission for Allied Healthcare Professionals Bill in Parliament to ensure transparent regulation for 56 allied healthcare professions. Also, kicking off reforms in the nursing profession, the National Nursing and Midwifery Commission Bill will also be introduced in the Parliament.

Authored by

Aryaman Tandon, Practice Leader, Healthcare, Praxis Global Alliance

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