The Union Cabinet, chaired by Prime Minister, Narendra Modi today approved the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN) as a single non-lapsable reserve fund for share of Health from the proceeds of Health and Education Cess levied under Section 136-b of Finance Act, 2007. Administration and maintenance of the PMSSN is entrusted to the Ministry of Health & Family Welfare and in any financial year, the expenditure on such schemes of the Ministry would be initially incurred from the PMSSN and thereafter, from Gross Budgetary Support (GBS)

According to Union Health Ministry, The PMSSN would be non-lapsable reserve fund for Health in the Public Account and proceeds of share of health in the Health and Education Cess will be credited into the fund. Accruals into the PMSSN will be utilized for the flagship schemes of the Ministry of Health & Family Welfare namely Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), Health and Wellness Centres (AB-HWCs), National Health Mission, Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), Emergency & disaster preparedness and responses during health emergencies. The PMSSN would also be used for any future programme/scheme that targets to achieve progress towards SDGs and the targets set out in the National Health Policy (NHP) 2017.

The government claimed that the major benefit of the fund will be enhanced access to universal and affordable health care through availability of earmarked resources, while ensuring that the amount does not lapse at the end of financial year.

Health is vital for improved developmental outcomes. From an economic standpoint, better health improves productivity, and reduces losses due to premature death, prolonged disability and early retirement. Health and Nutrition also directly impact scholastic achievements and have a bearing on productivity and income.  Health Outcomes depend substantially on public spending on health.  One extra year of population life expectancy raises GDP per capita by 4%, Investment in health creates millions of jobs, largely for women, through a much needed expansion of the health workforce

In the budget speech 2018, the Finance Minister while announcing Ayushman Bharat Scheme, had also announced replacement of existing 3% Education Cess by 4% Health and Education Cess.