Editorial Simplified: We Need A Leap In Healthcare Spending | GS – II

In India, allocation for healthcare is merely 2.2% of the Budget. Per capita spending on health in the Budget in India is ₹458 (₹61,398 crore/ 134 crore, which is the population).

Relevance: GS Paper II (Social sector)

Theme of the Article

India needs to focus on long-term investment, not only episodes of care.

Why has this issue cropped up?

The Central and State governments have introduced several innovations in the healthcare sector in recent times.

Issues with health care in India

  • The U.S.’s health expenditure is 18% of GDP, while India’s is still under 1.5%.
  • While the Interim Budget is responsive to the needs of farmers and the middle class, it does not adequately respond to the needs of the health sector.
  • Per capita expenditure on health is about $20, or about $100 when adjusted for purchasing power parity. U.S. spends $10,224 per capita on healthcare per year.
  • In Budget terms, S.  spends 23.5% of the Budget. In India, allocation for healthcare is merely 2.2% of the Budget.
  • Allocation to the National Tobacco Control Programme and Drug De-addiction Programme is only ₹65 crore. The allocation for each of the wellness centres is less than ₹1 lakh per year. This is a meagre amount.
  • Prevention of chronic kidney disease, which affects 15-17% of the population, is not appropriately addressed.
  • Due to lack of focus in preventive oncology in India, over 70% of cancers are diagnosed in stages III or IV. The reverse is true in developed countries.

Way forward

  • To reach its target, the government should increase funding for health by 20-25% every year for the next five years or more.
  • The ₹6,400 crore allocation to Ayushman Bharat-PMJAY in the Interim Budget will help reduce out-of-pocket expenditure on health, which is at a massive 67%.
  • The mandate of health and wellness centresunder Ayushman Bharat. should include health education and holistic wellness integrating modern medicine with traditional Indian medicine.
  • Both communicable disease containment as well as non-communicable disease programmes should be included in health and wellness centres.
  • History shows that where there is long-term commitment and resource allocation, rich return on investment is possible. For instance, AIIMS, New Delhi is the premier health institute in India with a brand value because of resource allocation over decades.
  • A focused approach in adding tax on tobacco and alcohol, to fund non-communicable disease prevention strategies at health and wellness centres, should be considered.
  • Increase of GDP alone does not guarantee health, since there is no direct correlation between GDP and health outcomes. However, improvement in health does relate positively to GDP, since a healthy workforce contributes to productivity.
  • For various diseases, allocation should be realigned for disease management over a defined time period, not merely for episodes of care.
  • The health sector must be made a priority area, like defence.
  • Since a major innovation in universal healthcare is being rolled out, it must be matched with a quantum leap in funding.


Only if we invest more for the long-term health of the nation will there be a similar rise in GDP