Unpacking the health budget
BY Z A FA R M I R Z A
2025-07-25
NATIONAL budgets are not just numbers.
They reflect the national vision and priorities.
A general view about budget 2025-26 is that it is a lost opportunity. With some macroeconomic stability and inflation under control, many economists think it was time to prepare a reformist budget. The government should have checked its own expenditure, given relief to the salaried class and reset national priorities.
Today, with almost half of Pakistan`s population below the internationally comparable poverty line and 16.5 per cent living in extreme poverty, and with over 25 million children out of school and 40pc suffering from stunting, it`s not rocket science to work out where the needs are and where public money should be spent. Sadly, it is no wonder that Pakistan`s Human Development Index ranking has been declining consistently over the last 10 years. We ranked 147 in 2015; according to this year`s report, we`ve plummeted to 168 among 193 countries.
Against this backdrop, let`s look at health budget 2025-26, with the knowledge that Pakistan is among the lowest spenders on health.
To put things in perspective, according to the World Bank, domestic general government health expenditure per capita in international dollar terms in 2022 in Pakistan was 68.11; in the same year, it was 475.01 in Iran, 245.91 in Sri Lanka, 623.19 in China, and 106.83 in India. To meaningfully progress towards achieving universal healthcare (UHC), governments need to spend at least 5pc of GDP. Pakistan`s spending hovered around 1pc in 2022, whereas in the same year Iran spent 2.63pc, Sri Lanka 1.76pc, China 2.95pc and India 1.29pc.
At the federal level, the combined non-development and development budget for the Ministry of National Health Services has been cut from Rs54.87 billion in FY 2024-25 to Rs46.10bn in FY 2025-26 a reduction of Rs8.77bn. More importantly, the non-development budget, which mainly goes towards salaries, has been increased from Rs28bn to Rs32bn, whereas the development budget has seen a huge 47pc cut down from Rs27bn to Rs14bn.
In Balochistan, where needs are dire, the health budget has increased by only 6pc from theprevious year to Rs87bn. This is a province with serious political unrest and economic problems, where educated young people have joined the uprising because of lack of opportunities and public services. According to an official estimate, 60pc of primary healthcare facilities in the province are without medical officers, and in some districts up to 75pc of children are not routinely immunised. Of all the provinces, Balochistan is the worst off in terms of UHC Service Coverage Index, which is 40 on the scale of zero to 100. In some districts, it is as low as 18.
The SCI is calculated by measuring the coverage of 14 basic health services. In this budget, Rs4.5bn are allocated for the Health Card Programme. There is almost doubling of the budget for PHC in Balochistan in relative terms, which is appreciable.
The KP government has allocated Rs276bn to the health sector in the current budget, which is a 19pc increase from the previous year. The allocation for the Sehat Card Plus programme has been increased from Rs28bn to Rs35bn, with an additional Rs6bn for the merged districts. The programme is universal, with coverage of the broadest spe ctrum of treatments, even including bone marrow transplants and cochlear implants.
The PHC, however, remains underserved in the province. With 80pc of the province`s population living in the rural areas, according to the 2023 census, strengthening PHC in these areas and expanding health insurance to PHC in the private sector should be prioritised. In my view, the Sehat Sahulat programme in KP needs serious rethinking in terms of its universal coverage at the tertiary level and no coverage at the PHC level in the private sector.
The Sindh government has increased its health budget by almost 7pe, from Rs347.57bn to Rs371.87bn. Out of this, the non-development budget is 87.7pc, ie, Rs326.5bn, with only 12.3pc remaining for the development budget, ie, Rs45.37bn. The development budget increase is less than 1pc compared with the previous financial year. Sindh continues with its heavy focus on high-cost tertiary-level care, rather than on lowcost and long-lasting preventive care at the PHC level. Tertiary hospitals, mainly in Karachi, areserving people well, but unless the prevention of diseases becomes a financial priority, we`ll continue to mop the floor. Governance and misuse of allocated funds, for both the recurrent and development budget, continue to be huge challenges for Sindh.
Punjab has substantially increased its health budget to Rs630.5bn from Rs539bn last year ie, an increase of Rs91.5bn or almost 17pc. Out of this, Rs181bn are for the development budget.
While it is an impressive increase, Punjab has three major healthcare issues. First, it continues to spend high amounts on tertiary care and pays relatively less attention to PHC. Secondly, inequity in healthcare is a bigissue in the province.
Most new schemes are in Lahore, and this time there is a hefty allocation of Rs109bn for the establishment of a medical district in Lahore, which the government call its flagship initiative.
According to a district-level analysis in 2024 by the Ministry of National Health Services, per capita government health expenditure in Lahore was above $70, but less than $1 in 24 out of 36 districts in Punjab. These figures speak for themselves. The third issue is that everything in Punjab is unabashedly and heavily politically motivated. Left, right and centre, everything is in the name of the chief minister. There was an attempt even to change the name of the Jinnah Institute of Cardiology, but then better sense apparently prevailed.
Seemingly, there has been increase in the health budget all around, but this is still far less than desired keeping in view the public health crisis in the country and the minimum required to achieve UHC. Our priorities continue to be lopsided in healthcare spending. We are ready to spend heavily on transplants and cancers but not appropriately on preventing non-communicable diseases and organ failures. Last, but not least, governance issues and lack of population control will continue to drown all our efforts, even increasing budgets, to improve health in Pakistan. The writer is a former health minister and currently a professor health systems and population health at the Shifa Tameer-i-Millat University