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Union Budget 2017: Health Sector Largely Ignored, Says Dr. Amir Ullah Khan

New Delhi: Having noted that global financial headwinds, a slowdown of the world economy and a potential rise in oil prices may put the domestic economy in some stress, Finance Minister Arun Jaitley, while presenting Union Budget for 2017-18 on Wednesday assured that India will continue to outperform most developing economies. The fact that India is now the sixth largest manufacturing economy and FDI grew by 45 percent, bodes well for the next financial year.

Describing the Union Budget of 2017 as “a simple budget borne out of a government seized with a slowdown and a tight fiscal situation” development economist, Dr Amir Ullah Khan shares with, his analysis of the announcements made for the social sector.

“Breaking away from tradition has been the key theme of this budget. Not only was this observed in the clubbing of the main budget along with the railway budget, but also with the time devoted to explaining the governments’ aims and building context ahead of key announcements, rather than talking about increase in excise of various products. ” said Dr Amir Ullah Khan.

In the aftermath of demonetization and stagnation in private expenditure, the government has prioritised focusing on public sector and infrastructure spending for revitalizing the economy.

“This seems to be at the expense of social sector spending, as the amount of money recovered from demonetization is insufficient for major allocations.” says Dr Khan.

Allocation on MNREGA has gone up to Rs. 48,000 crores from the previous year’s allocation of Rs. 38 crores.

While this is being projected as an increase, according to Dr Khan, it is in fact lower than last year’s actual spend which stood at approximately Rs. 50,000 crores.

“Allocation towards various social sector programmes in this fiscal, such as the National Rural Drinking Water Mission (Rs. 6,050 crores, up 0.8% against revised estimate of the previous fiscal), National Social Assistance Programme (Rs. 9,500 crore, no change), Pradhan Mantri Gram SadakYojana (Rs. 19,000 crore, no change), National Programme of Mid-Day Meal in Schools (Rs. 10,000 crore, up 3%), is under par.” says Dr Khan.


“Health has been largely ignored”, says Dr Khan, adding that “1.5 lakh health centres will now be renamed wellness centres which changes nothing”, he said.

Talking about insurance ,he said social insurance as a financing scheme will run only when the government commits huge outlays, not with the small amounts it allocates for targeted programs.

“Also, all problems cannot be solved by insurance alone.”

Commenting on investing in the public sector particularly for immunization for children and for comprehensive maternal care, Dr Khan said it is extremely critical and not doing so imposes large costs on the economy by way of productivity losses and hospitalization costs for those who suffer.

There has been an increase towards the National Health Mission which stands at Rs. 27,131 crores, up 20 percent.

“This will be woefully short if the Finance Minister wants to achieve his stated objective of eliminating diseases like black fever by 2017, Leprosy by 2018, Measles by 2020 and more importantly Tuberculosis by 2025, which is a major public health concern”, says Dr Amir Ullah Khan.

Commenting on the reports of 28.9% increase in health budget as compared to last year from Rs. 38,000 crore to Rs 49,000 crore, he said that a bulk of the allocation would go to the two new AIIMS proposed and that the total spending by the federal government is still less than 0.3% of the GDP.

Source: News18