Has health spending by the Centre increased?, Pg10

Key Highlights:

• The National Health Policy (NHP) 2017 target to increase government health expenditure to 2.5% of GDP by 2025 was not achieved.
• State health expenditure has increased from 0.67% of GDP in 2017-18 to 1.1% in 2025-26, while the Union government's has decreased from 0.37% to 0.29% in the same period.
• The Union government's 2025-26 health budget is 4.7% less than the actual expenditure in 2020-21, considering inflation.
• The Health and Education Cess (HEC), meant to expand health spending, is being used to supplement tax resources.
• Union spending on health transferred to States for Centrally Sponsored Schemes has declined from 75.9% in 2014-15 to 43% in 2024-25.
• Expenditure on the National Health Mission (NHM) has declined in real terms by 5.5% on average during the second tenure of the National Democratic Alliance government.

Detailed Insights:

• Public health spending in India remains low compared to other countries, with Bhutan, Sri Lanka, and BRICS nations spending significantly more per capita.
• During the COVID-19 pandemic, public spending on health increased, largely due to increased spending by the States.
• The Union government's decreased allocation for health post-pandemic indicates a shift in priorities after the immediate health emergency.
• Despite collecting thousands of crores through the Health and Education Cess (HEC), the funds are not being fully utilized to expand the health budget.
• The trend of declining Union spending on Centrally Sponsored Schemes reflects a hyper-centralization of financial resources, despite healthcare being primarily a State responsibility.
• Schemes like the National Health Mission (NHM) and Pradhan Mantri Swasthya Suraksha Yojana, which strengthen the public health system, have faced severe cuts.
• The NHM, launched in 2005, has been crucial in improving health services, but its expenditure has largely remained stagnant or declined in recent years.

Key Concepts Involved:

• GDP (Gross Domestic Product): The total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
• Centrally Sponsored Schemes: Schemes that are implemented by state governments but are largely funded by the central government.
• Health and Education Cess (HEC): A tax levied on income to fund health and education initiatives.
• National Health Mission (NHM): A government program to improve healthcare access and quality across India, especially in rural areas.