Has Covid-19 made health budgets respectable?

As far as the health expenditure is concerned, the pandemic never happened

Dr Pervez Tahir June 26, 2020
A Reuters file image.

Pakistan’s public expenditure on health has not only been notoriously below the internationally recommended percentage of GDP, but also declining. From 0.1% in 1951-52, it took 36 years to achieve the peak of 1.25% in 1987-88. Then it was downhill, touching the foothill of 0.2% in 2010-11. Thanks to the 7th National Finance Commission (NFC) and the 18th Amendment, there was a recovery in the present decade to 1.2% by 2017-18. Besides a new set of challenges, the corona pandemic has brought to the centre stage the gross inadequacies of the health system known but ignored for a long time. Budgets present an opportunity to gauge the degree of seriousness of official response. Doubtless, some countries with well-resourced health systems have fared no better than those with poorly funded health services. However, others with effective public health delivery systems, such as Germany, Singapore and Vietnam, have acquitted themselves well in dealing with the pandemic.

Under the Constitution of Pakistan, health is a provincial subject. Regardless, the federal government continued to be a significant player in traditional subsectors of health. The pandemic has brought home the point that its role is crucial in areas that cut across boundaries, the ongoing pandemic being the starkest example. In 2019-20, the federal government budgeted Rs11 billion for the current expenditure on health, but ended up exceeding it by about a billion, presumably because of the additional requirements imposed by the coronavirus in the last quarter. The budget for 2020-21 has been more than doubled to Rs25.5 billion for the same reason. In the outgoing year, the development budget of Rs12.7 billion was utilised only to the extent of Rs8.1 billion. Next year, there is a substantial increase at Rs14.5 billion.

Punjab’s budget for 2019-20 allocated Rs145.1 billion for the current spending, but the corona-related spending led to a revised amount of Rs154 billion. The allocation in the next year is Rs157.1 billion. On the development side, the revised estimate of Rs27.6 billion is far less than the budgeted amount of Rs37.3 billion for 2019-20. At Rs30.3 billion, the development budget for 2020-21 is significantly less than the previous year’s budget estimate. According to revised estimates, Sindh spent Rs125.7 billion on the current side against the budget allocation of Rs116.8 in 2019-20. The allocation for 2020-21 is Rs135.9 billion. In the development budget, the allocation was Rs15.2 billion but the revised estimate was lower at Rs11.5 billion. The allocation for 2020-21 is Rs30.5 billion, an increase of more than 100%. In Khyber Pakhtunkhwa (K-P), the current expenditure budget for 2020-21 has been increased by as much as 28.3% and development budget by a massive 130% over the revised estimates of the previous year. Finally, Balochistan has earmarked Rs31.4 billion and Rs10.4 billion for 2020-21, respectively, for the current and development budget, an increase of 30.8% and 55.7% over the revised estimates of 2019-20.

In 2019-20, the total revised federal expenditure was Rs20 billion. It was Rs181.6 billion in Punjab, Rs137.2 billion in Sindh, Rs51.7 billion in K-P and Rs30.7 billion in Balochistan. The national total comes to Rs421.2, or 1% of GDP. The corresponding allocations for the next year are Rs40 billion, Rs187.4 billion, Rs166.4 billion, Rs72.8 billion and Rs41.8 billion, with the national total of Rs508.4 billion comprising 1.1 per cent of GDP, the same as in 2018-19.

As far as the health expenditure is concerned, the pandemic never happened.

Published in The Express Tribune, June 26th, 2020.

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