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Mega healthcare scheme 'game changer', financing not a constraint: Niti

Monday, February 05, 2018

Brushing aside criticism of the newly announced mega healthcare scheme, Niti Aayog Vice- Chairman Rajiv Kumar has said it is a "game changer" and revenue from the 1% additional cess would be enough to meet the funding needs.

Finance Minister Arun Jaitley in his budget for 2018-19 announced the National Health Protection Scheme (NHPS) announced to provide health insurance cover of Rs 5 lakh to over 10 crore poor and vulnerable families.

"This scheme is game changer," Kumar told PTI as he regretted that "a completely baseless and false propaganda" is being spread against the ambitious scheme of the Modi government.

On funding of the scheme envisaging to cover about 50 crore people, the Niti Aayog vice-chairman said the allocation for the health sector has been raised by Rs 6,000 crore.

Moreover, there is an existing facility of Rs 2,000 crore for the ongoing RSBY scheme. The government has provided further financial space to the health ministry by establishing an alternate mechanism Higher Education Financing Agency (HEFA) for funding capex needs of the health education project.

And in addition, the 1% extra education and health cess proposed by Jaitley in the budget will annually yield Rs 11,000 crore. All these combined would be more than adequate to meet the financing needs of welfare programme.

The Centre and the state governments, Kumar added, will only have to bear the insurance premium which was likely to be very moderate. It will benefit from bulk procurement and competition.

"Like all central schemes it will have 60-40 ratio. Those states which want to join join the scheme will contribute 40%. North East states will pay 10%," he added. Many experts have questioned the ability of the government to fund such as ambitious scheme and also the availability of infrastructure to provide medical facilities for a large number of people across the country.

According to senior Niti Aayog officials, the mega healthcare scheme will cost up to Rs 12,000 crore annually and it is likely to be launched either on August 15 or October 2.

Mega health plan to cost Rs 1 lakh cr: Research
The mega healthcare plan for the poor, as announced in the Budget, will cost about Rs 1,00,000 crore annually and curtail states' autonomy to design their own policies in the sector, says a research paper, authored by a professor at economic think tank NIPFP.

The paper's estimate is 10 times higher than the one made last week by Niti Aayog adviser Alok Kumar, who had said that the National Health Protection Scheme (NHPS) will cost around Rs 10,000-12,000 crore annually.

National Institute of Public Finance and Policy (NIPFP) Assistant Professor Mita Choudhury said in the paper -- 'The National Health Protection Scheme in the Union Budget 2018: Is it in the Right Direction?' -- that resource requirements for implementing NHPS are likely to be very high.

"Not only would such a scheme impose a heavy burden on both the Union and the states' exchequers, it will also curtail states’ autonomy to design their own policies in a sector that is constitutionally mandated to be in their domain," said the paper.

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