Low expenditure in Healthcare in India – UPSC GS2

Summary: India’s public health expenditure remains one of the lowest among major economies in the world. It needs to do more to achieve decent standards of healthcare for all.
  • India’s annual spend on Health care is around ₹2,000 per capita.
  • India’s annual health budget has stayed barely above 1% of gross domestic product (GDP) for the past decade. In the fiscal year 2019-20 it was 1.3% of GDP.
  • This ratio compares unfavourably even with emerging market peers such as
    • Indonesia (1.4%)
    • China (2.9%)
    • Russia (3.2%)
    • South Africa (3.6%)
  • This fiscal year, the Centre and most state governments have budgeted lower health spending.
What are the implications of a lower public health expenditure?
  • High out of Pocket expenditure: Low government spending means Indians spend out more on health expenses from their pockets. According to the WHO’s health financing profile for 2017, roughly 2/3rds of expenditure on health in India is out-of-pocket, nearly four times the global average of approximately 18%.
  • The vicious cycle of poverty: Low public health spending, together with high out-of-pocket expenditure, a catastrophic health event such as this pandemic push the vulnerable further into poverty.
  • Poor health indicators: WHO ranked India 57th out of 195 countries on its Global Health Security Index, pointing out weak spots in India’s health preparedness.
What is the way forward?
  • Better resource mobilization and targeted transfers to the country’s poorer states to help them catch up.
  • India must focus on achieving universal health coverage.
  • Attention to non-communicable diseases will need to be balanced with that to infectious diseases such as covid-19.
  • Benefits of technology should be leveraged to provide last-mile healthcare access, particularly through telemedicine. In this context, the recently announced PM Ayushman Bharat Health Infrastructure Mission, which aims to spend ₹64,180 crores over the next five years to fill critical gaps and improve long-term health care infrastructure, is a welcome move.
  • For Centre: The National Health Policy, 2017, the latest Economic Survey, have both recommended a national public health spending target of 2.5-3% of GDP by 2025.
  • For States: Health is a state subject. Three-fourths of India’s public health expenditure is, in fact, undertaken by state governments. The National Health Policy, in addition to recommending an increase in overall public health spending, had also proposed that states increase their health expenditure to 8% or more of their respective budgets, by 2020.

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