India slashes health budget by nearly 20%

New Delhi, December 23 The Indian Government has ordered a cut of nearly 20% in its 2014/15 healthcare budget due to fiscal strains, putting at risk key disease control initiatives in a country whose public spending on health is already among the lowest in the world. Two Health Ministry officials told Reuters on Tuesday that more than 60 billion rupees, or $948 million, has been slashed from their budget allocation of around $5 billion for the financial year ending on March 31. Despite rapid economic growth over the past two decades, successive governments have kept a tight rein on healthcare expenditure. India spends about 1 percent of its gross domestic product (GDP) on public health, compared to 3% in China and 8.3% in the United States. But hopes were high that Prime Minister Narendra Modi, who was elected in May, would upgrade basic health infrastructure and make medical services more affordable for the poor. The United Nations estimates about one third of the world's 1.2 billion poorest people live in India. "We were not expecting (budget cuts) this time because of the commitments they made in the manifesto," one of the health ministry officials said, referring to Modi's Bharatiya Janata Party (BJP). "No reason was given ... but there is shortage of funds. It is not rocket science." The officials requested anonymity because of the sensitivity of the matter. The Finance Ministry, which ordered the spending reduction and overruled objections from the Health Ministry at a recent meeting, did not respond immediately to requests for comment. — Reuters