To bolster health care, governments must raise their budget allocations

The Union Budget 22-23 has given an emphasis on health and human resources and tertiary care, but this has seemingly come at the expense of primary health care.

We are now past the halfway mark between 2017 (the year the latest National Health Policy was announced) and 2025 (by when its overarching health spending target is to be achieved). The National Health Policy (NHP) 2017 aimed to increase public health spending from about 1% of the Gross Domestic Product (GDP) to 2.5% by 2025. This will require hikes in central and state public health spending. Spending increases by states tend to be sluggish compared to that of the Centre. It would be meaningful, thus, to see how Union health allocations have fared from 2017.

Health care spending is expected to increase more than proportionally with increases in national income. (PTI)

With NHP 2017, the allocation for the ministry of health and family welfare (MoHFW) saw a commendable 31% increase, from 2016-17 to 2017-18, in real terms. In the same period, the share of the health budget in total central government expenditure (hereafter budget share) shot up from 2% to 2.5%. However, spending trends 2017-18 onwards belied the targets set. Between 2017-18 and 2020-21 (the latest year for which actual estimates are available), MoHFW saw only a 35% increase in real allocation, with a compound annual growth rate (CAGR) of about 10.5%. Even more dismaying are the budget share figures, which declined consistently from 2.5% in 2017-18 to 2.2% in 2022-23.

Another important goal of the NHP 2017 is to strengthen primary health care. But the spending trends for the National Health Mission (NHM) are disappointing. After witnessing a 35% real increase from 2016 to 2017, NHM allocations only saw a 4.6% real increase from 2017 to 2020 with a CAGR of about 1.5%. Similarly, the Pradhan Mantri Jan Arogya Yojana (PMJAY), India’s flagship public hospitalisation insurance scheme, was allocated nearly ₹6,400 crore for the fourth year in a row, while the revised estimates and actuals continue to hover around 50% or less.

Health care spending is expected to increase more than proportionally with increases in national income. India has defied this, and our public health spending fails to cross the sticky 1% of the GDP mark. Before NHP 2017, NHP 2002, National Rural Health Mission in 2005, and the 11th and 12th five-year plans, all envisioned an increase in public health spending to 2% of GDP or more. Clearly, our tradition of setting aspirational targets and failing to meet them continues.

Increasing health spending is contingent not only on political will but also on the ability of institutions to adequately utilise funds. For example, as per a 2018 Comptroller and Auditor General performance audit of the Pradhan Mantri Swasthya Suraksha Yojana, lack of proper planning and execution led to delays, cost overruns, and unutilised funds. Health systems tend to follow path dependent trajectories, and, often, it takes radical crises to extricate them from a rut of low funding and attention. If the pandemic couldn’t do that, what can?

It is high time the Centre took a renewed lead on investing in health, especially as tax revenues appear to increase. This has to come in the form of consequential increases in the budgetary allocation that resonate with the time-bound spirit conveyed in NHP 2017. This, in turn, should stimulate state governments to follow suit. Global experience backs tax revenues for health care expansion in a country like India — contrary to recent central policy pronouncements on expanding health insurance which espouse individual contributions.

The high returns on investing in health, particularly primary health care, are axiomatic. This is further pronounced in under-resourced contexts such as India, and NHP 2017 rightly acknowledges it by envisioning nearly two-thirds of government health spending to be reserved for primary care. The Union Budget 22-23 has given an emphasis on health and human resources and tertiary care, but this has seemingly come at the expense of primary health care. Increasing investments in hospital care in the aftermath of Covid-19, while slipping up on primary care spending, will make for a reactive and myopic approach to health care expansion. The waning of the pandemic coupled with high rates of Covid vaccinations present an opportunity to revive the health system and expansionary activities that took a hit in the past two years.

Soham D Bhaduri is a physician, health policy expert, and chief editor of The Indian Practitioner 

The views expressed are personal