Thursday, February 08, 2018
Saturday, February 03, 2018
By Chithira Rajeevan*
Finance Minister (FM) Arun Jaitley presented his government’s last budget in the lead up to the general elections in 2019. The budget has directed its lens on the rural communities in the country, with a focus on women, and a few eye-grabbing announcements in the health sector. An outlay of ₹1200 crore has been announced towards bringing quality healthcare to the people through 1.5 lakh health and wellness centres offering maternal and child healthcare services along with free essential drugs and diagnostic aids. In a landmark pronouncement, Jaitley introduced the National Health Protection Scheme (NHPS), touted as the world’s largest government funded programme. The scheme will provide an annual coverage of ₹5 lakh to 10 crore families. This step towards universal health coverage is laudable but requires a closer inspection.
The FMhad announced these schemes in his previous budgets with no significant improvement in the status quo.Of the then proposed 1.5 lakh health centres, the National Health Mission had the capacity to strengthen only 3871 centres in 2017–18. Whether the current allotment would be sufficient for the projected plans seems doubtful, considering the allocation has been decreased by more than 2 per cent. The earlier NHPS remained dormant with the Union Cabinet without any concrete plan towards getting it cleared. The only difference between that and the current scheme seems to be a five-fold increase in the coverage provided, which makes one wonder what exactly has changed. A closer look at the current budget documents reveals no significant details regarding the same.The only contribution towards health insurance seems to be the allocation of ₹2000 crore for the Rashtriya Swasthya Bhima Yojana (RSBY), which was to be replaced with the NHPS by April 2017. The RSBY is currently in dire straits with private hospitals threatening to pull out,due to large arrears, persistently high proportion of out-of-pocket expenditure faced by the patients despite the scheme, and problems of transparency.The funds released and utilised as part of RSBY have also reduced along with the number of participating states. Various studies assessing the scheme reveal concerns including insufficient incentives for those involved in service delivery, exclusion of outpatient care, unethical practices among hospitals and so on.
A scheme that could strengthen our healthcare system, while protecting the poor and vulnerable from financial risk is a welcome move; however, it must be capable of addressing the existing shortcomings. Furthermore, the current allotment towards health has increased by only 12 per cent, which would not be sufficient to meet the aspirational goals set. The proposed funds that would be flowing into the secondary and tertiary hospitals, through the NHPS, must not come at the expense of our primary healthcare system. Our Primary Healthcare Centres and Community Healthcare Centres are already bogged down by poor infrastructure and shortage of personnel. These are concerns that require the same level of attention, if not more, especially in light of the increasing incidence of non-communicable diseases and other chronic conditions in India. The ambitious target of 10 crore families, if achieved, would be a huge success and give a necessary boost for the sector; although it seems far-reaching, considering the status of RSBY enrolment. The government has presently provided neither a clear picture on fund allocation nor a framework for the implementation of the scheme. The government needs to offer more clarity on the exact nature of the scheme, including the service delivery model and its financing, without which this would be just another election promise that does not see the light of day.
*Chithira Rajeevan is Research Assistant at Centre for Public Policy Research. Views expressed by the author is personal and does not represent that of CPPR
Wednesday, January 31, 2018
By Anusha Sooriyan*
The defence budget is an important baggage for the Ministry of Finance (MoF), as the men in uniform wait for their fair share in protecting the nation. With escalating security threats such as the Doklam issue with China and incidents of infiltration in the Indo–Pak border, the defence forces are vitally engaged in building and training a robust team, and procuring and trading the best weaponry. The defence forces in India have sufficiently grabbed the government’s attention by giving a testament of their might. But has the government given them their due?
While the defence budget of 2016-17 was known for its pays and perks (as it was the season of One Rank One Pension scheme), its 2017-18 counterpart was a huge comedown. Honourable Finance Minister Arun Jaitely brushed aside the expenditure for the defence sector in a quick note. With an insignificant hike of 6.2 per cent in defence spending and an allocation of ₹2,74,114 crore, Mr Jaitley closed the defence budget statement. The previous financial budget did not include the pension bill, which amounted to ₹85,000 crore, and the whole expenditure share was just 1.56 per cent of the country’s GDP.
Budgetary Allocations of 2017-18
The three services in the defence sector hardly witnessed any change in their share of the total budget for a long period. History repeated in 2017-18, when the Army got the largest share, while the Air Force and Navy were allocated 21 per cent and 13 per cent of the expenditure, respectively. Surprisingly, the Research and Development (R&D) and Ordnance Factories marked an increase of 8 per cent in their share of the total budget compared to 2016-17.
Source: Official Website of the Institute of Defence Studies
Capital and revenue expenditures are the two main components of the defence budget. The revenue expenditure has held on to a giant share of the budgetary allocation in the last few years. In 2017-18, ₹1,82,534 crore was allocated for revenue expenditure, while ₹91,579.9 crore was earmarked for capital expenditure. This was no surprise, as the allocation towards capital and revenue expenditures has been in the ratio of 60:40 since 2014.
Source: Official Website of the Institute of Defence Studies
Imposing cuts on defence modernisation shifted the expenses from capital to revenue expenditure. The MoF took this step, as the Ministry of Defence (MoD) failed to utilise and, hence, returned more than ₹10,000 crore, earmarked for capital expenses in the previous budget. This reflects poor planning and financial management by the MoD.
Keeping a watch over the defence budget allocation of various nations, the US and China have shown huge deflections. In 2017, the US allotted 654 billion USD, the highest in the world. It was a 10 per cent increase in expenditure from the previous year. On March 6, 2017, China announced that it would raise the defence allocation by 7 per cent, i.e. around 151.43 billion USD. China’s defence spending is about three times higher and that of the US is 13 times more than the Indian defence budget.
The defence sector is in dire need of higher allocation for enhancing its combat capabilities in the eastern and western sides of international borders. The overall increase of ₹15,525 crore is insufficient and inadequate for military modernisation. The skill to plan the finance on developing and modernising the assets has to be the top priority of MoD. The ‘Make in India’ campaign for defence has not yielded positive results. Hence, the Indian defence sector needs to credibly attract more investors and reduce dependence on imports.
A recent example is the cancellation of the ‘Make in India’ project for building minesweepers or mine-counter vehicles (MCVM’s) in association with a South Korean firm at Goa shipyard. This is a setback to the Indian Navy and a challenge to ocean and sea-borne trade. Despite these standalones, some experts are keen on an increase of 10-12 per cent in the capital outlay for defence.
The Army, Navy and Air Force need at least 4-5 billion USD for the next six to seven years in order to fill the funding gap, which is capped at 50 billion USD. “There has to be a significant jump in the capital outlay for defence acquisition. From ₹90 lakh crore, it has to be increased to ₹120 lakh crore,” said a defence ministry official, while talking to an online news portal.
The lack of a long-term plan for strategically examining the requirements of the defence sector has never been addressed. Experts suggest that forming a National Security Strategy and a separate standing committee could attend to the needs and necessities of the sector. This could help curb the unspent expenditure estimate and give an approximate number. R&D has to gain its due for the defence sector to progress uniformly. The dream to bring the expenditure count to 3 per cent of the country’s GDP needs to be catered efficiently.
Union Budget 2018-19 will be a taxing affair for the central government, as it will be the last budget session before the general elections in 2019. The MoF has gone on record, citing farmers’ issues and job creation for youth as the government’s priority. With the answer loud and clear, one can expect a subtle mention of the defence sector this year too.
*This blog is written by Anusha Sooriyan, interning at CPPR and Pursuing Masters in Politics and International Relations. Views expressed by the author is personal and does not represent that of CPPR