Healthcare spend lowest in India @ 0.36% of GDP

At 0.36% of the gross domestic product or 2.3% of the total budget expenditure for the financial year 2010-’11, India’s annual healthcare spend continues to remain one of the lowest in the world.

World’s second most populous country, India has been consistently increasing the allocation for the healthcare of its over 1.2 bn population over the years. Despite these efforts the spending for healthcare remains a minuscule.

India has made a jump from 0.26% of GDP which was around Rs 8086 crore or 1.6% of the total budget expenditure for the year 2004-’05 to Rs 25154 crore for 2010-’11.

The budget outlay for healthcare was increased to Rs 9650 crore during 2005-06 and Rs 10948 crore during 2006-07.

The central government has allocated Rs 14410 crore in the year 2007-’08 and increased to Rs 17661 crore during 2008-09.

As per the revised estimates during 2009-10, the allocation for health by the Centre stood at Rs 21680 crore, which accounted for 2.1 per cent of the total expenditure and 0.35 per cent of the GDP.

Still, the overall spend for the vital healthcare sector always remained far less than half a percent of the India’s GDP hovering around a maximum of 2% of the total budget while healthcare expenditure of most of the other developing world put more resources on
healthcare.

Health expenditure in India still remain an out of pocket spend for the people as the government allow no insurance schemes for the welfare of patients.

Some of states governments, however, have made some efforts to improve healthcare by allocating more for the health sector, at around 4 per cent of the total budget expenditure.

The overall allocation from all the states under the Union government of India, stood at Rs 16048 crore during 2001-02, forming 4.4 per cent of the total budget expenditure. It went up to Rs 43849 crore during 2009-10, but the percentage inn proportion to the total expenditure stood at 4.2,reports indicate.

Combined with the Centre’s outlay, the total spend on healthcare could come upto 1.02 per cent of the GDP.

The private sector is responsible for the majority — 71.6 per cent — of the health burden while the public sector accounted for 26.7 per cent. External funding constituted 1.7 per cent of the total expenditure.

The greater reliance on private delivery of health infrastructure and health services means that overall these will be socially underprovided by private agents, and also deny adequate access to the poor.

Households accounted for more than two-thirds of health spending in India and around three times the amount of all government expenditure taken together, by the Central, State and local governments.

Among the developed nations US spend the most – over 15% of its GDP –for healthcare.