India’s healthcare spending

AFTER a steady rise spanning 14 years since 2004-05, government expenditure on health as a percentage of the GDP saw a sudden fall in 2018-19, the latest financial year for which figures are available. According to the National Health Accounts data released on Monday, public health expenditure for 2018-19 was 1.28 per cent of the GDP, down from 1.35 per cent in the previous financial year. After that, government spending on public health has seen a significant rise since the Covid pandemic struck two-and-a-half years ago, but it could be argued that a health emergency forced the hand of the decision-makers. The fact is that the numbers from the Union Ministry of Health show that in the pre-pandemic times, India was not on track to take health spending to 2.5 per cent of the GDP by 2025, as envisaged in the National Health Policy in 2017 — far from it, actually. It is evident that spending on healthcare is lagging far behind the country’s economic growth, as reflected in the GDP.

The positive aspect of the new data is that out-of-pocket expenditure by Indian citizens on healthcare is continuing to decline, falling from nearly 70 per cent of the total national expenditure in 2004-05 to 48 per cent in 2018-19; this was possible because the government health expenditure rose from 22.5 per cent to 40.6 per cent in this period. However, the country’s per capita healthcare expenditure has seen only a marginal rise over the last few years: from Rs 3,174 in 2013-14 to Rs 3,314 in 2018-19. At constant prices, this does not amount to much.

The numbers for the last two financial years, when released, would reflect the urgency the government was forced to show in order to deal with the devastating effects of the pandemic. However, with increased spending, it is incumbent on the Central and state governments to ensure that public funds are spent wisely. The focus must be on providing top-class specialist healthcare to people in towns and villages — and not on creating behemoth hospitals in the cities, which then become clogged with patients travelling from far and wide for treatment. Good public healthcare is the right of every citizen and the government must do its utmost to ensure that it is provided to them closest to where they live — village, town or city.

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