NEW DELHI: India’s allocation for health is all set to double. The Planning Commission has decided to increase its spending on health to 2.5% of the GDP in the 12th Five Year Plan that starts next year.
This is in accordance with the recommendation made by the High Level Expert Group on universal health coverage that was constituted by the Commission. Syeda Hamid, member of the Planning Commission, said, “Nearly 2.5% of the GDP will be used in health sector during the next plan period. This will be a big jump.”
The expert committee, headed by Dr K Srinath Reddy, had recommended that India should more than double its public spending on health by 2017 to reduce the tremendously high private out-of-pocket spending on medical bills. The group recommended increasing public spending by central and state governments from the current level of about 1.2% of the GDP to at least 2.5% by the end of the 12th Plan in 2017, and at least 3% of the GDP by 2022.
India’s public spending on health as a proportion of the GDP is among the lowest in the world. The corresponding percentage is 1.8 in Sri Lanka, China (2.3) and Thailand (3.3). In 2009, private expenditure in India accounted for 67% of the total expenditure on health.
According to the report, an analysis of per capita public spending on health reveals the disturbing trend. For instance, in 2009, the per capita government spending on health in India (PPP $43) was significantly lower than in Sri Lanka (PPP $87) and China (PPP $155). Outpatient treatment accounts for 74% of private out-of-pocket expenditures. Medicines account for 72% of the total private out-of-pocket expenditures.
The expert group said, “Increasing public health spending to our recommendations will result in a five-fold increase in real per capita health expenditures by the government (from Rs 670 in 2011-12 to Rs 3,432 by 2021-22).”