Substantial decline in health expenditure in May surprises experts

Even if one compares the expenditure month-on-month, the decline has been substantial at nearly 70 per cent

As the country grapples with the Covid-19 pandemic, the government’s health expenditure dropped almost 50 per cent in May year-on-year (YoY) after seeing a bump in April, surprising experts.

Sequentially, the decline has been approximately 70 per cent.

The Ministry of Health and Family Welfare spent Rs 3,948 crore in May this year compared to Rs 7,816 crore in the corresponding month of the previous year, showed data by the Controller General of Accounts.

On the other hand, at Rs 12,930 crore, the expenditure had risen almost 200 per cent in April against Rs 4,327 crore in the corresponding month of 2019-20.

Within the ministry, the lion’s share of the outlay is allocated to the Departments of Health and Family Welfare. This expenditure shrank by almost 50 per cent at Rs 3,925 crore in May compared to Rs 7,785 crore in the corresponding month of 2019-20. It had seen a jump of 200 per cent at Rs 11,928 crore in April YoY.

A small portion of the funds is allocated to the Department of Health Research. This expenditure declined by 24 per cent at Rs 23.08 crore in May compared to Rs 30.53 crore a year ago, and the fall was 97.69 per cent month-on-month. The expenditure had climbed by 179 per cent at Rs 1,001.48 crore in April YoY.

Outlay allocated to the Indian Council of Medical Research (ICMR), which envisaged the “launch” of a vaccine to cure Covid-19 latest by August 15, also comes under this head.

A former top government official, who did not wish to be named, said one probable reason for the decline is that offices were shut in April because of the national lockdown. This meant that approval for spending in May had not come by April.

“The other explanation could be that there has been a shortage of funds... the government may also have felt that with the migrant crisis and economic situation it is more important to put money into the hands of people.”

For instance, by May, the Ministry of Rural Development has spent almost half of the money allocated to it in the Budget.

Aditi Nayar, principal economist at ICRA, said, “It is unclear if the lockdown had an impact on the demand for various health services, which affected the flow of funds from the Centre towards various schemes in May 2020.”

The Ministry of Ayush does not have as much funds as its counterpart in the health and family welfare. Even here, the expenditure was just Rs 7.28 crore in May this year, way down from Rs 200.6 crore in the corresponding month of the previous year. The expenditure had risen to over 500 per cent in April at Rs 270.95 crore YoY.