The Union government's interim budget for 2024-25 has proposed a 1.7 per cent increase in the annual outlay for health programmes after slashing the current year’s health expenditure by Rs 8,500 crore.

The budget presented by finance minister Nirmala Sitharaman has proposed Rs 87,656 crore for 2024-25, after the initial proposed outlay of Rs 86,175 crore for 2023-24.

Health economists say a 1.7 per cent rise, taking into account inflation, could effectively lower health programmes' purchasing capacity in real terms in the coming year. The health budget supports major national health programmes, including immunisation, diagnostic and treatment services in public health facilities, multiple central health institutions, and disease surveillance and control, among others.

"If inflation is 6 per cent, a 1.7 per cent rise will mean a 4.3 per cent decline in real terms," said Indranil Mukhopadhyay, a health economist and member of the Jan Swasthya Abhiyan, a nationwide network of doctors and public health activists.

The budget documents show that the Centre’s revised expenditure on health for the year 2023-24 is expected to be about Rs 77,600 crore, or Rs 8,500 crore less than the initial outlay of Rs 86,175 crore.

A programme to bolster human resources for health and medical education, supporting initiatives to upgrade district hospitals and strengthen nursing, pharmacy, and paramedical education institutions received only Rs 1,519 crore in 2023-24 against its initial outlay of Rs 6,500 crore.

The Pradhan Mantri Jan Aarogya Yojana (PMJAY), a nationwide insurance scheme that covers hospitalisation costs of up to Rs 5 lakh per year for poor households, also had a downward funds revision — Rs 6,800 crore in 2023-24, against the initial outlay of Rs 7,200 crore. The proposed outlay for the PMJAY scheme for 2024-25 is Rs 7,500 crore, a 4 per cent increase over the initial outlay for the current year.