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Health spending may be double next fiscal

New Delhi, Jan 26 (Reuters) | Publish Date: 1/26/2021 12:00:39 PM IST

India is likely to double health spending in the next fiscal year with the aim of raising expenditure in the sector to 4% of gross domestic output in the coming four years, two officials said, as the country looks to fix its health system after the coronavirus pandemic.

India will likely raise its health spending to 1.2-1.3 trillion rupees ($16.46-$17.83 billion) in the fiscal year starting April 1, from the current year’s projected spending of 626 billion rupees, the officials told Reuters. The new healthcare plan is likely to be unveiled on Feb. 1 when Finance Minister Nirmala Sitharaman presents the country’s budget for 2020/21. The officials did not want to be named as the plan is not yet public. Even after decades of high growth, the country’s spending on healthcare has been a meagre 1.3% of GDP, way below BRICS peers and developed countries.

The strain of India’s underfunded healthcare system was put in stark relief during the pandemic, with states forced to set-up makeshift COVID care centres and many hospitals struggling to meet the demand for beds and oxygen cylinders. India has recorded over 10.6 million coronavirus cases, the second-highest in the world after the United States. Sitharaman is likely to unveil a four year health budget plan with the aim to move India’s healthcare spend to 4% of GDP, with the help of a dedicated health fund, the officials said.

The government could also increase a health tax from the current 1% of income and corporate tax to fund the new programme, one of the above officials said.

Currently it raises about 150-160 billion rupees annually from the health tax.

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