1. Saving lives on a budget

Saving lives on a budget

It requires increased healthcare allocation, ideally up to 3% of GDP

By: | Published: December 28, 2015 12:16 AM

Despite two decades of economic growth, India continues to invest a miserly amount in healthcare. Although the budget was a little over Rs 30,645 crore for 2014-15, it continues to hover around 1.3% of the country’s GDP, i.e. about 4% of total government expenditure. Even among SAARC countries, Afghanistan spends 8.7% of its GDP on health, followed by Maldives at 8.5% and Nepal at 5.5%. As per the WHO Global Health Observatory Data Repository and the World Bank, the total expenditure share on health as a percentage of GDP for Brazil, South Africa and China stands at 4.7%, 4.3% and 3.1%, respectively.

Under the Constitution, the primary responsibility of providing healthcare lies with state governments and a bulk of healthcare expenditure is to be incurred by them. The central government gives additional funds to the states for concerns that are of wider interest or impact national well-being in different ways. Through the mid-1990s, the central government incurred expenditure primarily on family planning, select disease control programmes, national-level institutes of medical education, training, research and tertiary-level healthcare. With the initiation of the National Rural Health Mission (NRHM) in 2005—the country’s flagship health programme that provides basic medical services to millions of poor—the central government also began to incur a substantial amount of expenditure on primary and secondary healthcare at the state-level. NRHM was expanded to the National Health Mission (NHM) in 2013 to include the National Urban Health Mission (NUHM), which further increased the health expenditure incurred by the Centre.

Despite political commitment at the highest levels to make healthcare reforms a priority, the Centre continues to eye the outlays for health, education, agriculture, rural development, etc, to keep the fiscal deficit down. This was evident in the healthcare budget being slashed by almost 20% in December 2014. Thereafter, instead of keeping up with the promise to increase healthcare funding to 3% of GDP, the previous as well as the current governments chose to hover around 1% of GDP.

In addition to reducing the budget, whatever amount that gets allocated to health is not fully spent. The system itself has historically struggled to spend the allocated budget. The choice of reallocation of underutilised health funds to other sectors that are able to spend the amount has been continuously made over building capacity within the system to utilise available funds.

The Finance Commission’s decision to economically empower the states by increasing the states’ share from the national pool of tax revenue seems to be an affirmative action to fix the poor choices made in the past. However, on the other hand, it seems to come as a convenient defence to the mere 2% hike in the Union health and family welfare budget. Theoretically, the devolution is expected to make more funds available to states for spending. In reality though, states like Bihar, Uttar Pradesh, Odisha and Andhra Pradesh would get a meagre additional amount. In addition, the states are now required to allocate an increased share of funding for NHM to offset the 20% budget cut levied on it.

Family welfare budget in the country has been reduced by 87% in the recent years, from Rs 12,278.65 crore in 2013-14 to Rs 1,605.37 crore in 2014-15. This may have been because most of the family welfare budget was routed through the reproductive and child health programme under NHM, which subsumed NRHM, erasing the family welfare budget lines. Of the Rs 396.97 crore spent on family planning under NHM in 2013-14, Rs 338.91 crore (85%) was spent on female sterlisation, while the expenditure on spacing methods was a mere Rs 5.76 crore (1.45%). The fact that India has a huge population of young couples who would need to space their children has been conveniently ignored.

By 2020, India aims to reach the goal of averting 42,000 maternal deaths, 12 lakh infant deaths and 2.39 crore births annually. Preoccupation with female sterilisation, reduction in the healthcare budget and poor allocation to family planning does not elicit much confidence in our preparedness to achieve commitments made under Family Planning 2020 (FP2020), which is an outcome of the 2012 London Summit on Family Planning where the Indian government made a commitment to provide contraceptive services to an additional 48 million users. A sense of urgency is required to meet the daily unmet need of family planning among the masses. Saving lives in a country of 130 crore cannot be achieved on a shoestring budget with a one-size-fits-all approach. It requires increased healthcare allocation, ideally up to 3% of GDP, and provision of an expanded choice for spacing methods of contraception to ensure fulfilment of the unmet needs of family planning.

The author is executive director, Population Foundation of India

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