India raises education, health spending (Second Lead)

NEW DELHI - The government will spend a staggering Rs.52,057 crore (Rs.520 billion/$11.5 billion) on education and Rs.26,760 crore (Rs.267 billion/$ 6 billion) on health in the year 2011-12 to ensure “inclusive growth” for all, Finance Minister Pranab Mukherjee announced Monday.

“The country has carried for long enough the burden of hunger and malnutrition,” Mukherjee said while presenting his third consecutive budget in the Lok Sabha.

Calling education as the tool of empowerment to reap the benefit of India’s demographic dividend of a young population, Mukherjee announced a hike of 24 percent in the budget spending for education.

“For education, I propose an allocation of Rs.52,057 crore, with an increase of 24 percent over the current year,” Mukherjee said.

“Our demographic dividend, a relatively younger population compared to developed countries, is as much of an opportunity as it is a challenge. Over 70 percent of India will be of working age by 2025. In this context universalising access to secondary education, increasing percentage of our scholars in higher education and providing skills training is necessary,” he said.

The allocation for health sector was also increased by 20 percent at Rs.26,760 crore. Calling Rashtriya Swasthya Beema Yojana “an effective instrument for providing health cover to marginal workers”, the finance minister announced extending its ambit to unorganised labour working in hazardous hazardous mining and associated industries.

Service taxes on air conditioned hospitals with bed capacity over 25 however attracted strong reactions from the private sector.

“The budget has levied service tax on hospitals and diagnostic service providers and with this the end user, the patients, will end up paying much more than earlier. This is detrimental to the concept of preventive healthcare and early diagnosis which is pivotal to address the mounting burden of chronic diseases,” said Prathap Reddy, chairman of the Apollo group of hospitals.

Chairman & MD, Asian Institute of Medical Sciences N. K. Pandey said, “Union budget 2011 did was somewhat of a disappointment for the healthcare sector. The incentives for Hospitals in districts and towns were missing.”

A lack of emphasis on child care in the health budget was highlighted as a shortcoming by some NGOs.

“The total health budget has increased by 21 percent. But the budget for the National Rural Health Mission has only increased by 15.5 percent. Given the nearly double digit inflation, this is a nominal increase for a flagship programme that was conceptualized to help India meet the Millennium Development Goals on reducing maternal and child mortality,” Thomas Chandy, CEO, Save the Children said.

The hike in education budget was meanwhile welcomed as allocation for both school and higher education increased.

“The hike in the allocation under Sarva Shiksha Abhiyan by 40 percent and the revised Vocationalisation of Secondary Education scheme are steps in the right direction,” V.K. Gupta, director of Management Development Institute (MDI) in Gurgaon, said.

All India Management Association president Gautam Thapar said: “The announcement of support for ‘vocationalization’ of the secondary education to make Indian youth more employable is very commendable.”

Describing education as a means of empowerment, the finance minister also announced a scheme for scholarship for Scheduled Caste and Scheduled Tribe students in Class 9 and 10.

“Empowerment flows from education. While the Scheduled Caste and Scheduled Tribe students have access to post-matric (Class 10) scholarship, there was so far a lack of pre-matric scholarship scheme,” Mukherjee said.