Annual Report 2008 - Ministry of Finance and Planning

2. Fiscal Developments - 2008
84
Box 2.3
Financing the Health Sector
In line with the policy directions outlined in the “Mahinda
Chinthana”: Vision for a new Sri Lanka: A Ten Year Horizon
Development Framework 2006- 2016, the Government
continues to support long-standing policy of providing a
universal free health service to its people while maintaining
the Millennium Development Goals that the country has
already achieved.
The total Government investment in health has increased
from Rs. 61 billion in 2007 to Rs. 70 billion in 2008 which
is about 1.6 percent of GDP. The health sector investment
represented a 40 percent of the total Human Resource
Development Budget of 2008, and a 7 percent of the total
Government expenditure. This is in addition to the steady
growth in investment by the private sector in the health
sector that has taken place over the years.
The total health budget includes a growing share of
investment both at national and provincial level covering
outlays on preventive, curative and promotive health
services.
Resource Mobilization in Health
Annually, a major share of health expenditure is channeled
to meet the recurrent expenditure while providing a
substantial increase of funds on capital expenditure.
The capital investment on health has increased from Rs 11
billion in 2007 to Rs 14 billion in 2008. These funds were
mainly used for curative health care, especially hospital
development. The total capital expenditure on health
is largely financed from domestic funds. The foreign
assistance contribution was only 28 percent. However, the
funds committed on hospital development projects were
not satisfactorily utilized in 2008, due to procedural delays
associated with donors, problems in land acquisition etc.
Major Capital Investments in Curative Healthcare, 2006-
2008 Rs. mn
Investment Area 2006 2007 2008 2009 (a)
Hospital
Development 1,802 2,468 4,269 5,194
Projects
Hospital
Rehabilitation
1,685 1,983 1,831 2,899
Medical
Equipment & 1,767 1,825 902 3,241
Machinery
Hospital Furniture 92 101 65 250
Vehicles to
Hospitals
94 - 168 96
Total 5,440 6,377 7,235 11,680
Source: Department of National Budget and Department of State
Accounts
Note: Includes only Central Government Expenditure
(a)
Estimate
In addition to hospital development projects, a major share
of capital investment has also been channeled for hospital
rehabilitation, medical equipment etc. Further, a total capital
investment of Rs 1,168 million was provided to carry out new
initiatives to control communicable and non communicable
diseases with domestic as well as foreign assistance - World
Bank, Global Fund etc. in 2008.
Out of the total recurrent expenditure on health, a bulk has
been channeled for medical supplies, hospital maintenance
and payment of salaries.
Ministry of Finance and Planning Sri Lanka
Annual Report 2008