Rise in public health spending due to States, not Centre
The Centre’s spending on health has decreased post-pandemic while States have continued to spend more
as a percentage of GDP during the pandemic needs to be attributed to the negative and low growth of GDP, while absolute increase in expenditure remained modest, in real terms
More concerning is the decline in the share of resources transferred to the States by the Union Healthy Ministry. In FY14, threefourth (75.9%) of the Union spending on health was transferred to the States Within the rst three years of the National Democratic Alliance government, the share came down to little more than half (53.4%) and declined consistently to reach a new low of 43% in FY24 (Budget Estimates). The trend re ects increased centralisation of nancial resources on health, a subject which largely falls within the domain of States.
Launched in 2005, the NHM was a crucial intervention by the Union government. But expenditure on the scheme has mostly remained stagnant or has come down in the last seven years
Between FY14 and FY19, the spending on NHM grew at 7.4% on average, largely due to a sudden jump in FY18. During the second tenure of the NDA government, spending on NHM declined in real terms at 5.5% on average.
The Modi government’s emphasis on Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) is visible in its spending patterns. A look at the expenditure on various GFHIs such as PMJAY shows a steady increase in expenditure. Between FY15 and FY20, expenditure in real terms nearly doubled, growing at an average of 18% per annum. Even though the Centre draws a lot of mileage from these schemes, a bigger share of the spending is incurred by the States.
The COVID-19 pandemic had shown the cracks in India’s health system and highlighted the need for increased public investment in healthcare. While the States have risen up to the challenge, despite nancial constraints, the Union government has done little.