Cabinet approves reserve fund to manage healthcare schemes in country

PMSSN covers any any programme to achieve India's sustainable development goals and the targets set out in the national health policy

The cabinet on Wednesday approved the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN) as a single non-lapsable reserve fund for healthcare in India.

Proceeds of health and education cess will be credited to this fund to be used for flagship schemes of the health and family welfare ministry.

Finance minister Nirmala Sitharaman, in her 2018 budget speech, had announced the Ayushman Bharat Scheme, replacing a 3 per cent education cess with a 4 per cent health and education cess.

The health ministry will administer the fund. Any programme to achieve India’s sustainable development goals and the targets set out in the national health policy would be covered by the fund.

PMSSN would also be put to use for disaster preparedness and responses during health emergencies.

The government hopes that the fund would give “enhanced access to universal and affordable health care through availability of earmarked resources.” It would also ensure that the amount does not lapse at the end of the financial year.

A press statement by the government said that health outcomes depend substantially on public spending on health. “One extra year of population life expectancy raises GDP per capita by 4 per cent, Investment in health creates millions of jobs, largely for women, through a much needed expansion of the health workforce.”

It also said that from an economic standpoint, better health improves productivity, and reduces losses due to premature death, prolonged disability and early retirement.

“The investment on health infrastructure in this Budget has increased substantially. Progressively, as institutions absorb more, we shall commit more,” said Sitharaman in her budget speech for 2021-22.

The budget for health saw a doubling of allocation to Rs 2,23,846 crore to cover “health and wellbeing” with a large chunk - Rs 35,000 crore going towards Covid-19 vaccination.

The government aims to increase the health expenditure to of 2.5 percent of gross domestic product by 2025. The economic survey had estimated that an increase in health spend from 1 per cent to 2.5-3 per cent of the GDP can decrease the out-of-pocket expenditure from 65 per cent to 30 per cent of the overall health care spend.