India reveals ‘world’s largest healthcare programme’

1 Feb 18

India's finance minister has unveiled the “world’s largest healthcare programme” in a surprise move as part of the last budget before the election next year.

Finance minister Arun Jaitley delivered the Union Budget on Thursday, which included a number of giveaways, including free cooking gas and a health plan for the poor.

Jaitley said in his budget speech: “We are slowly progressing towards universal health coverage.”

The new universal health coverage for as much as 500 million people in the country came as an unexpected surprise to many, a government official told PF International.

It will also require the Indian government levering in private sector money, he added.

Ravi Kant Gupta, additional commissioner income tax at the government of India, said: "India spends only a little over 1% of GDP on healthcare and to come up with such a mega government funded Health Assurance Scheme for half a billion citizens, though very much desirable for moving towards Universal Health coverage, came as a sudden announcement and a bright spot, as it would require major commitment of funds from the government. 

"It would also need tapping of private sector for funds as well as providing the necessary infrastructure to serve such huge unmet needs."

The government’s new health protection scheme aims to insure the poor population for up to 500,000 rupees (roughly $8000) per family a year.

Gupta told PF International the funding for this would mostly be through incomes taxes.

He said: “Union Budget 2018 has announced world's biggest healthcare coverage programme...This shall be funded through levying a health and education cess [tax] of 4% on the income tax.

“This brings the focus of the governance on lower and middle class and moves the governance beyond the realms of 'class based'.”

The health insurance scheme can be used to pay for hospitalisation and treatment in secondary and tertiary care facilities.

"So the overall budget is in right direction and not a populist one considering the fact that it was last full budget of this government before it faces general elections in 2019,” Gupta said.

The finance minister also announced the creation of health and wellness centres, which will “bring healthcare closer to home”.

The budget also included a series of structural reforms to boost growth. The fiscal deficit is projected at 3.3% for 2018-19.

Income tax rates did not change while corporate income tax was lowered to 25% from 29% for almost 99% of companies.

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