Rajiv Lall, Chairman, IDFC Institute and Vivek Dehejia, Resident Senior Fellow, IDFC Institute, write in Mint about why Modicare must been seen in the broader context of Narendra Modi's attempt to re-engineer the welfare state in India. Excerpts:
"Prime Minister Narendra Modi’s Independence Day speech was headlined by the announcement of the Pradhan Mantri Jan Arogya Abhiyan, previously Ayushman Bharat. The National Health Protection Mission (NHPM), or “Modicare”, will roll out on 25 September. It is expected to provide basic health insurance cover for 100 million families, based on a range of socioeconomic deprivation criteria culled from the Socio-Economic Caste Census 2011 (SECC). The scheme will provide coverage up to ₹500,000 per family for secondary and tertiary care and is expected to cost ₹11,000 crore per year. This cost will be shared according to a 60-40 formula between the Centre and states.
While many details remain to be worked out, and funding and implementation challenges will be considerable, the attempt to create a publicly-funded national health insurance scheme for the poorer half of the population is an ambitious and laudable goal. This is an era of a backlash against liberalization and globalization everywhere, driven by people’s inchoate sense that they have been the losers of market-based economics. It is even truer in a vibrant and politically-competitive democracy with many poor voters, such as India, that capitalism and the market system must prove their legitimacy each and every day.
An important component of creating and sustaining political legitimacy for the market, which is key for the pursuit of further liberalizing reforms, is laying the foundations for a re-engineered welfare state for India that provides basic public goods to the most deprived members of society. The irony is that decades of socialism and central planning in India, emanating from Jawaharlal Nehru’s vision, failed to achieve this. We have created a welfare apparatus that is corrupt, wasteful, and ineffective in addressing the needs of the poorest. One telling fact testifying to this is that out-of-pocket expenses account for a whopping 67% of total health spending. This is 12th highest among all nations and sixth highest even amongst lower and middle-income countries."
Read the full article here.