Health sector sees marginal budget boost but questions about spending ability remain

Experts harbour serious concerns about the effective utilisation due to a lack of administrative capacity

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Even though the proposed budget has slightly increased the allocation for the health sector compared with the previous one, it is still less than necessary.

Experts have expressed deep doubts about how much can actually be utilised due to 'lack of administrative capacity'.

On Thursday, Finance Minister Abul Hasan Mahmood Ali presented a budget of Tk 7.97 trillion for the fiscal year 2024-25 in parliament.

For this new fiscal year, Tk 414.08 billion has been allocated for the health sector, which is 5.2 percent of the total budget and 0.74 percent of the GDP.

In the 2023-24 fiscal year, the health allocation was Tk 380.50 billion. Hence, this year's allocation has increased by Tk 33.57 billion.

Last year, the Ministry of Health and Family Welfare could not fully utilise the allocated funds. Consequently, in the revised budget, the amount was reduced to Tk 297.83 billion, which stood at 4.16 percent of the total revised budget and 0.58 percent of the GDP.

This time, under the health ministry, the proposed allocation for the entire health sector includes Tk 301.25 billion for the Health Services Division and Tk 11,283 billion for the Family Welfare Division. Of this money, Tk 212.18 billion is for operational expenses and Tk 201.90 billion for development expenses.

Public health expert Lenin Chowdhury told bdnews24.com regarding this year's health budget, "The budget for health has neither been good nor bad. For the past 20 years, the budget allocation for health has been close to 5 percent of the total budget. The same has happened this time.

"The allocation for health in Bangladesh cannot be fully utilised due to the lack of capacity in the health department. Therefore, every year the same exercise is repeated—increasing some expenses and reducing others."

Lenin believes that simply increasing the allocation without enhancing capacity, planning, and implementation capabilities necessary to serve 170 million people does not make much difference. In his view, this is a budget for building, renovation, and purchasing.

"This should not be called a 'healthcare budget' but a 'medical budget' because there is a difference between the two. A medical budget is just a part of health services."

Professor Syed Abdul Hamid of the Institute of Health Economics at Dhaka University said that the health sector's allocation has not increased significantly. However, the growth in this sector in the budget is somewhat higher.

"Tk 2 billion has been set aside to deal with emergency health risks and 100 million Taka for research. Concessions have been given on kidney dialysis filters and dengue kits, which are positive. However, the duty on medical equipment has been increased from 1 percent to 10 percent."

Hamid called for not reducing the health budget during revisions, stating that full implementation of the health sector budget requires cooperation from all sides of the government. Importance must be given to proper spending channels, stopping corruption or waste, and increasing efficiency in expenses.

Nirupam Das, the chief coordinator of the Doctors Foundation, told bdnews24.com that the allocation has increased slightly compared to before. However, more was expected.

"We had hoped for a larger allocation. It would have been better if it had been more. Now, we hope that what has been allocated is implemented properly."

Expressing regret that the health sector's full allocation could not be spent, he said, "Instead of blaming the health administration solely, they need to be trained. If they still fail, then they can be held accountable."

However, former health minister Zahid Maleque does not want to blame the Health Services Division alone for the budget being returned. He says, "Operational expenses within the health allocation are fully spent. Development projects are not completed on time, causing funds to be returned.

"Contractors do not finish work on time. Many projects were delayed during the coronavirus pandemic. This is not only due to health reasons but also natural disasters and the rising costs of construction materials, which require adjustments.

"Our projects are executed by the Public Works Department. Their designing and contracting take time, which also delays the completion of work. These things are not in our hands."

Former health minister Zahid Maleque, now heading the parliamentary standing committee on the ministry, said that acquiring project expenses in phases also consumes time.

"Every bill of a passed project budget needs new approval. If it were said that once a budget is passed in parliament, it does not need repeated approvals from the Ministry of Finance, it would yield better results."

Maleque said, "Delays in purchasing machinery and services are shown as unspent budget money.

"If an order cannot be shipped on time for any reason, it is shown as 'unspent.' To solve these problems, coordination between the Ministry of Finance and the Health Division needs to be improved."