The Ministry of Health and Family Welfare has set a preliminary budget allocation of Tk 434.83 billion for the next fiscal year (2025-26), marking a Tk 20.75 billion increase from the current fiscal year's allocation of Tk 414.08 billion.
This represents a 5 per cent rise in the health budget, which is 1 percentage point lower than the overall growth of the national budget, as outlined by the Finance Division. The modest increase comes amid a notable shift in the allocation pattern, with development expenditure being significantly curtailed.
According to official sources, the development allocation for the ministry is set to decrease by 13.30 per cent in the next fiscal year, while operating expenditures-covering salaries, procurement, and other non-development costs-are projected to rise by 22.44 per cent.
The Health Services Division, a key segment under the ministry, is expected to bear the brunt of the cutbacks, with its development allocation facing a sharp reduction of approximately 20 per cent, as revealed in the minutes of a recent Budget Management Committee (BMC) meeting.
Meanwhile, the Medical Education and Family Welfare Division is also poised to experience budgetary adjustments, with operating expenditure increasing by around 16 per cent and development expenditure by only 0.5 per cent.
Experts and health economists said that a slower growth in health allocation with a massive cut in development expenditure would hinder the health service delivery system and push to increase out-of-pocket expense by people for health services.
They said that the government sector health allocation has been stagnant at around 5 per cent of the national budget and around 0.7- 0.8 per cent of the of GDP over the last 10 years, which resulted in .8 hospital beds per 1,000 population-far lower than the minimum of three recommended by the WHO.
Public sector secondary and tertiary care hospitals across the country are utilised beyond their capacity, according to the White Paper Committee report of the government which found hospital bed occupancy rates (BOR) in 2022 at 137 per cent on average.
A massive infrastructure for the health sector has been developed in the last decade, and huge manpower will be recruited to utilize such infrastructure, said Dr Wahiduddin Mahmud, the planning adviser of the government.
At a press briefing held recently, he said that less emphasis will be placed on infrastructure development. Instead, priority will be shifted to human resource development, with plans to hire new personnel.
"Numerous medical facilities and large hospitals have been built at the upazila and district levels to cater to a growing number of patients. However, these facilities often lack essential staff, including doctors, nurses, and technicians needed to operate medical equipment," he said.
To address this, substantial recruitment of doctors, nurses, and technicians will be necessary, he said, adding such recruitment expenses will fall under the health sector but will not be part of the development budget.
The government spent a sum of Tk 624.90 billion to develop health sector infrastructure in the last fiscal year since 2017-2018 under the Annual Development Programme (ADP), according to the Implementation Monitoring and Evaluation Division (IMED) of the ministry of planning.
Report of the White paper committee revealed that the rate of increase in non-development expenditures has outpaced that of development expenditures. In FY 2010, 41 per cent of total budget was directed towards non-development expenditures which have risen to 62 percent in the FY 2024.
This trend pushed the out-of-pocket expenditure, reveals the report of the taskforce formed by the ministry of planning. "The per capita health expenditure is only $58 in Bangladesh, far below the WHO recommendation of $88 minimum per person per year, and a large portion of this is paid by the people themselves," reads the report.
The out-of-pocket health expenditure is 74 per cent as a proportion of current health expenditure and 68.5 per cent as a proportion of total health expenditure in 2020, much higher than the global average of 17.05 per cent, the report said.
The minutes of the BMC meeting reveal that health service division asked for Tk 314.16 billion for the next fiscal year-Tk 203.92 billion for the operating expenditure and Tk 110.24 billion for development.
Dr. Syed Abdul Hamid, a professor at the Institute of Health Economics in Dhaka University, told the FE that the health sector remains under-prioritized over the last couple of decades with a government allocation lower than 1 per cent of GDP, which increased treatment cost of people.
He said that the government should increase the health sector allocation with a balance of both development and operating expenditure. "A huge number of infrastructure and equipment remained under utilised due to a lack of human resources."
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