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The Union Budget for the financial year 2020-21 was announced on the 1st of February 2021. The expectations from this budget were great, owing to the challenges that 2020 threw at us not only in India but around the world. An increase in spending was a must, especially with respect to support those who are most vulnerable economically. Given the state of the economy as it is, many were looking to the budget for confidence of a strong revival.

Keeping this in mind, we will look specifically at what the government has allocated for three fundamental sectors – health, education, and infrastructure. This will be a two-part article with the first focusing on health and education, and the second looking into infrastructure. 

Experts Speak - In conversation with Dr. Geetha Manjunath


Human capital has always been the best investment a nation can make. Given the fact that a pandemic has occurred, all eyes were always going to be on the governments spending on healthcare. As mentioned in our previous article about the expectations of this years budget, India falls behind on many metrics including hospital beds, physicians, and so on when compared to not only the developed world but also the developing world. So how does the government aim to address these issues?

The Finance Minister announced a new scheme, titled the ‘PM Atmanirbhar Swasth Bharat Yojana’, which will target all levels of health systems, which include the primary, secondary, and tertiary levels. The planned spending on this scheme amounts to Rs. 64,180 crores over the next 6 years. The aim is to create new institutions along with strengthening the existing ones and to detect and cure new and emerging diseases.

The scheme will offer support to nearly 29,000 rural and urban Health and Wellness Centers. 12 central institutions will be set up to cover 602 districts and 3,382 block public health units will be set up in 11 states. The National Center for Disease Control (NCDC) will receive support across its 5 regional branches and 20 metropolitan health surveillance units. The 33 existing public health units at the various points of entry (airports, seaports, and land crossings) will be strengthened along with the creation of 17 new units at other important points of entry.

The scheme also aims to set up a national institution for One Health, a Regional Research Platformfor WHO South-East Asia Region, 9 Bio-Safety Level III laboratories and 4 regional National Institutes for Virology.

The government will launch ‘Mission Pochan 2.0’ which is a combination of the Supplementary Nutrition Programme and the Poshan Abhiyan in order to improve nutritional content, outreach, and outcomes with a special focus on 112 aspirational districts.

With respect to the provision of a clean water supply, the government will launch the ‘Jal Jeevan Mission’ in urban areas. The government will Rs. 2.87 lakh crores on this mission with an aim to provide universal water supply across 4387 urban local bodies through 2.86 crore tap connections. The programme will be implemented over the course of 5 years.

Cleanliness is a key aspect of health, and as such the budget includes allocations for an ‘Urban Swachh Bharat Mission 2.0’ which will receive Rs. 1,41,678 crores over the next 5 years. The government will also aim to tackle air pollution in 42 urban areas where the population exceeds 1 million people, providing Rs. 2,217 crores to this end.

The Pneumococcal Vaccine which was made in India is already being administered in 5 states and will soon be rolled out across the country. The Finance Minister announced that two more vaccines will arrive soon, in addition to the two which are already available. Rs. 35,000 crores has been allotted for the COVID-19 vaccine for this year, with more funds being made available if needed.


As a part of the recently announced ‘National Education Policy’ (NEP), the government will aim to strengthen 15,000 schools qualitatively. These schools will set the standards in their respective regions, so that the others may look to them in order to achieve the ideals of the policy. The government will also set up 100 new Sainik schools in partnership with various NGOs.

With respect to higher education, the Finance Minister had announced during the 2019-20 budget that a ‘Higher Education Commission of India’ would be set up. This year, legislation regarding the same is set to be passed. The commission will focus on standard-setting, accreditation, regulation, and funding.

Using the example of Hyderabad, a ‘Glue Grant’ was announced to create formal umbrella structures in 9 cities. In Hyderabad, there are over 40 different research institutes, universities, and colleges supported by the government. The idea of the grant is to create better synergy between these bodies.

The Minister also proposed to set up a Central University in Leh.

The Numbers

Spending on healthcare this year has gone up by 137%  up to Rs. 2,23,846 crores from Rs. 94,452 crores last year. The budget includes huge allocations for the coronavirus vaccine but also takes a holistic approach to healthcare in the country by focusing on things like clean water, sanitisation, and clean air as well. Having said that, a closer look at the ‘Annual Financial Statement’ reveals that the amount set aside for this year alone (2020-21) is actually Rs. 69,902.28 crores. India still very much ranks at the lower end of the spectrum when it comes to government spending on healthcare, even with this year’s substantial increase.

The plan to set up institutes that will work towards detecting new diseases and finding cures for the same signals the intent of the government to focus on preventative care.

With respect to education, however, spending this year is lower than that of last year, falling to Rs. 93,223 crores from Rs. 99,311 crores. The budget for the Department of School Education saw a much larger cut (-Rs. 4,972 crores) compared to the cut seen in the Department of Higher Education (-Rs. 1,116 crores). Spending on education has been quite low under the BJP government. It had stagnated at around 2.8% of GDP during the entirety of its first term and rose to around 3.3%-3.5% since. Experts believe however that 6% of GDP must be the targeted spending on education.

For thoughts, feedback and views, write to pavan@bclindia.in

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