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Topic : Healthcare Spending in India: Need for Increased Public Investment

GS-2 Mains : Health

Revision Notes

The Problem:

  • India’s public health spending is low compared to other countries.
    • Bhutan spends 2.5 times more.
    • Sri Lanka spends 3 times more.
    • BRICS nations spend 14-15 times more.
  • The Union Government’s health spending has decreased post-pandemic.
  • Share of Union spending transferred to States has declined significantly:
    • FY14: 75.9%
    • FY24 (BE): 43% (new low)


  • This trend centralizes financial resources while healthcare falls largely under States’ domain.
  • Funding for the National Health Mission (NHM), a crucial central initiative, has stagnated or decreased in recent years.

India’s Healthcare System:

  • Public sector: Limited secondary and tertiary care, focuses on basic care through Primary Healthcare Centers (PHCs) in rural areas.
  • Private sector: Provides most secondary, tertiary, and quaternary care, concentrated in major cities.

The Need:

  • Increased public expenditure on healthcare, especially at the Central level.
  • More support for initiatives like the NHM to strengthen public healthcare delivery.

Public Healthcare Financing in India : Structure

  • States manage public hospitals and clinics.
  • Ministry of Health & Family Welfare sets policy and provides support:
    • Funds states for public health facilities.
    • Runs national institutes (AIIMS) and UT facilities (Delhi).
    • Oversees public health schemes & medical education.
    • Conducts medical research.


  • Low public spending leads to:
    • Inadequate health infrastructure (staff & facilities).
    • Limited access, especially in rural areas.
    • Disparity between urban & rural health.
    • Neglect of preventive and primary care.
    • Higher disease burden.
    • Increased out-of-pocket expenses for citizens.

Recent Initiatives for Healthcare Growth in India

  • Digital Health Infrastructure: National Digital Health Mission (NDHM) launched in 2020 to create a digital health ecosystem with citizen health IDs.
  • Health Insurance: Ayushman Bharat PMJAY (2018) offers financial protection for hospital care to over 100 million families.
  • Preventive Care Focus: National Health Policy 2017 emphasizes preventive and promotive healthcare through Health and Wellness Centers (HWCs).
  • Strengthening Tertiary Care: Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) expands AIIMS institutions and upgrades medical colleges.
  • Boosting R&D: Government initiatives support research and development in vaccines, drugs, and medical technologies.
  • Medical Education Reforms: National Medical Commission (NMC) Act (2019) replaces the Medical Council of India (MCI) for improved transparency and accountability in medical education.
  • Affordable Medicines: Jan Aushadhi Scheme provides quality generic medicines at lower prices through Jan Aushadhi Kendras.


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