Increased allocation to healthcare welcome move, but India has still long way to go, says GlobalData

In its Union Budget 2021, India has more than doubled its spending on healthcare to boost the sector which has been strongly impacted by the COVID-19 pandemic. Even though the increased allocation is a step towards strengthening India’s healthcare infrastructure, the country has still a long way to go, says GlobalData, a leading data and analytics company.

Reportedly, the Indian government had allocated US$30.7bn (INR2,238.4bn) towards health and well-being, 137% higher than the budgeted outlay of US$12.9bn (INR944.5bn) for the FY 2020-2021. A large outlay of US$4.8bn (INR350bn) has been allocated for COVID-19 vaccination in the current budget.

Venkat Kartheek Vale, Pharma Analyst at GlobalData, comments: “India’s public expenditure on healthcare, as a percentage of GDP, has been just a little over 1%. The COVID-19 pandemic has exposed the weak healthcare infrastructure in the country.

“The budget seems to address some of the major challenges faced by the sector and is a step forward in improving the quality and accessibility of healthcare in India, thus enabling it to prepare for the future pandemics. In addition, a large amount of money allocated for COVID-19 vaccination clearly indicates that the government wants to vaccinate as many people as possible to help achieve herd immunity and put an end to the pandemic.”

Furthermore, to bolster vaccine and disease research, the budget includes setting up One Health – a regional research platform, nine bio-safety level III laboratories, and four regional National Institutes for Virology (NIV) in line with the NIV at Pune.

According to GlobalData’s ‘Country Focus: Healthcare, Regulatory and Reimbursement Landscape – India’, the Indian pharmaceutical market is expected to grow at a compound annual growth rate (CAGR) of 5.6% to reach US$45bn in 2025.

A recently published survey by the Indian Council of Medical Research (ICMR) estimated that 20% of India’s adult population had COVID-19 infection at some point until mid-December 2020. Significant increases in the infection rate in the latest survey highlight the gaps in the healthcare infrastructure, which lacked in tracking and testing of the suspected infectious cases in a quick and efficient manner.

Mr Vale concludes: “Even though India’s increased healthcare expenditure is a welcome step, the overall healthcare spending as a percentage of GDP is still very low compared to other countries. India should continue to increase investments in the public health system over a long period to create a comprehensive healthcare ecosystem to achieve self-reliance.”

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