Analysis of India's Health Spending: National Health Policy Targets Remain Unmet
Despite the 2017 National Health Policy's goal to increase government health expenditure to 2.5% of GDP by 2025, current spending remains significantly lower. While allocations by States and Union Territories have increased moderately, the Union government's spending as a percentage of GDP has decreased post-pandemic. The Health and Education Cess, introduced in 2018-19, has not been fully utilized for its intended purpose of expanding health services. The National Health Mission (NHM), a crucial intervention for rural health, has seen stagnant or declining expenditure in real terms over the last several years, highlighting a hyper-centralisation of financial resources.
Key Points
- National Health Policy 2017 target of 2.5% of GDP for health spending remains unachieved.
- Union government health spending has declined in real terms post-pandemic.
- States bear the primary cost of providing healthcare, with their share of spending increasing.
- The Health and Education Cess (4%) is often used to supplement existing budgets rather than expand them.
- NHM expenditure declined in real terms by 22.5% between 2020-21 and 2023-24.
Exam Facts
- NHP 2017 target: 2.5% of GDP.
- Health and Education Cess: 4%.
- NHM real-term decline (2020-21 to 2023-24): 22.5%.
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