India Boosts Healthcare Spending 135%, Opens Up Insurance Market

Country slashes import duties on gold and silver and imposes an additional tax on crude palm oil imports; it puts aside $2.74 billion for the next financial year to recapitalise state banks

- Inayat-ur-Rahman

India boosted healthcare spending by 135% and lifted caps on foreign investment in its vast insurance market on Monday to help revive an economy that suffered its deepest recorded slump as a result of the pandemic.

Finance Minister Nirmala Sitharaman projected a fiscal deficit of 6.8% of gross domestic product for 2021/22.

The current year was expected to end with a deficit of 9.5%, she said.

Sitharaman proposed increasing healthcare spending to 2.2 trillion Indian rupees ($30.2 billion) to help improve public health systems and fund a huge vaccination drive to immunise 1.3 billion people.

The planned expenditure of $30.6 billion on health and well-being schemes was more than double the equivalent outlay in the previous budget, although it included $4.8 billion for the country’s ambitious COVID-19 immunisation drive, with plans to vaccinate 300 million by July.

The nation of 1.3 billion was badly hit by one of the world’s strictest virus lockdowns, with growth slumping by a historic 23.9 percent in April-June, and the economy expected to contract 7.7 percent in 2020-21.

“This budget provides every opportunity for our economy to raise and capture the pace that it needs for a sustainable growth,” Finance Minister Nirmala Sitharaman told parliament as she unveiled the annual budget.

The health sector has long suffered from chronic underinvestment. As of 2017, the country had 0.8 doctors per 1,000 people, around the same level as Iraq, according to the World Bank.