The railways and healthcare sectors in India are huge and yet underperforming. Years of under-spending have led to a lack of solid infrastructure in these areas. However, progress, albeit at a slow pace, is being made in both areas. Here’s a look at the size of the railroad and health care budgets:
With an estimated value of $ 16.2 billion, Indian railways are the lifeline of Indian transport. It is the fourth largest rail network in the world. According to forecasts from the Indian Brand Equity Foundation (IBEF), India will account for 40 percent of the global share of rainfall activity by 2050. The IBEF report further indicates that FDI inflows in railway-related components amounted to $ 1.23 billion between April 2020 and June. 2021.
However, the sector has performed poorly in recent years. In fiscal year 2019-2020, the railways generated total revenue of Rs 1 74,694 crore against budget estimates of Rs 2 16,935 crore, recording a huge loss.
A report from the Comptroller and Auditor General (CAG) said India’s railways have the worst operating ratio in the past ten years at 98.44%. And its surplus income has shrunk by over 66%, from Rs 4,913 crore in 2016-17 to Rs 1,665.61 crore in 2017-18.
On top of that, the pandemic has brought passenger and domestic fares down to almost zero, compounding concerns for the railways. In view of this, the CAG suggested that the railways increase fares for passengers and other coaches to recoup the operating costs of its core businesses.
In 2021, the Union’s Finance Minister, Nirmala Sitharaman, announced an allocation of Rs 1.1 lakh crore to Indian railways to strengthen infrastructure. In the 2022-2023 budget, the Center is expected to announce a roadmap for the merger of six public sector enterprises (UPS) under the Ministry of Railways. The proposed mergers, officials say, have the potential to create monopolies that will command larger valuations when sold in part or in whole.
Typically, health spending accounts for 1.2-1.6% of India’s gross domestic product (GDP). However, it was not until 2021 that public health expenditure represented 1.8% of GDP. Even this share is tiny compared to other countries in the world, such as Sri Lanka, China, Thailand, UK, and USA.
It should be remembered that the allocation of India’s health budget in 2021 also included allocations to other departments such as clean water, sanitation and nutrition.
In the 2021 budget, Sitharaman allocated Rs.234,846 crore for healthcare. In addition, a new regime, the Prime Minister Aatmanirbhar Swasth Bharat Yojana, was announced in the budget, focusing on three areas: preventive, curative and well-being. Under this program, the government would spend Rs 64,180 crore over the next six years.
In view of the pandemic, healthcare will also be an area of major focus in the 2022 budget. More spending is needed as India’s healthcare system presents stark contrasts between rural and urban areas. In addition, India has a higher infant (under 5) mortality rate than Bangladesh and Nepal. Additionally, our country’s bed population and physician population ratios are worse than many other Asian countries including China, Sri Lanka, Thailand, and Nepal.
Because of these chronic problems, India’s ranking was a dismal 131 on the Human Development Index in the 2020 United Nations World Development Report.
However, the central government hopes to change this by 2025. In accordance with the National Health Policy (under the Ministry of Health and Family Welfare), India will strive to devote 2.5% of its GDP health care by 2025.
First publication: STI