Context:
Union Budget 2025-26 charts out four major growth drivers agriculture, MSMEs, investment, and exports through reforming taxation, power, urban development, mining, finance, and regulation. The social sector spend, in general, public health, remains grossly disappointing and has dropped to 3.9% of the budget 2025 26 from 5.3% of the budget 2019-20.
Key Highlights:
Budget and Growth Trends
- The budget for the year 2025-26 to the Union, health budget in the ministries like AYUSH, Health and Family Welfare along with Finance reaches ₹1.19 trillion.
- A sectoral spend of 2.4 % of the whole Union Budget while 0.33% against the GDP scale, down in comparison to its 3.59% value in 2021 22 and 0.56%.
- After three consecutive years of decline, health expenditure rises 18% from 2024-25 levels, but largely because of releases of pending 15th Finance Commission grants.
- MoUs:
- Health expenditure rises 154% compared to the previous year through MoF (Final tranche of Finance Commission Grants).
- 10% for the Ministry of Health and Family Welfare.
- 8% for the Ministry of AYUSH.
Public Health Spending Still Below Targets
- The 11th Five-Year Plan (2012) had set an aspiration to take public health spending up at least to 2% of GDP, and the National Health Policy (2017) had set an aspiration which brought spending up to 2.5% by 2025.
- 2025-26: total government health spending (Centre + States) will be at 0.79% of GDP, way below the goals.
Ayushman Bharat and Universal Health Coverage (UHC)
- PMJAY: the largest health assurance program in the world, with 29% increase in budget, now covers
- ASHA and Anganwadi workers, senior citizens above 70, and gig workers.
- 7% of the overall Union health budget. However, the per capita health budget is ₹844 that is 8% lower in the pandemic and fear of not achieving Universal Health Coverage (UHC) by 2030 hangs in the air.
Structural Challenges in Fund Utilization
- Finance Commission health grants for local bodies need proper coordination to be spent correctly.
- Use of finances for 2021-22 to 2023-24 is at an abysmal 50% levels of allocations, which perhaps seems to reflect a low level of local governance capacity.
Shrinking Fiscal Space for Social Sectors
- Health and social sector expenditure remains on a contractionary trajectory as a share of the budget.
- This would reduce India’s capacity to learn from the pandemic and slow the progress on poverty reduction, inequality and access to basic health care.
