India’s population is projected by the United Nations to touch 1.45 billion by 2028, making it the world’s most populous nation surpassing China.

Cumulative spending

Home to 17.5 per cent of the world’s population, India presently has an estimated 1.27 billion people, half of them below 25 years. But the country cumulatively spends only 4.2 per cent of its GDP on healthcare, with just 1 per cent being contributed by Government-supported public healthcare, which is amongst the lowest globally.

If India wants to leverage its demographic dividend, it needs to nurture a healthy population. And it needs to start now, as the next decade is critical to transform India’s healthcare sector with new models of care delivery and accelerate its growth. But, if the present trajectory of healthcare spending continues with public spending static at 1 per cent of GDP, then by 2022, the total healthcare expenditure will drop from 4.2 per cent of GDP to 3.66 per cent.

Draft policy

Eight weeks ago, the Government had announced a draft National Healthcare Policy 2015. Coming 13 years after the last policy in 2002, it charts a course that seemed like an ideal state — the most significant step being the increase in public healthcare spending from 1.04 per cent of GDP to 2.5 per cent of GDP in five years. This would change the per capita spend from ₹957 to ₹3,800.

The draft policy talked of health as a fundamental right and starting the process of Universal Health coverage, which would need close to $26 billion over the next four years.

Its goal of 1 bed per 10,000 population in urban India would require immense infrastructure creation over the next five years. The draft also provided for the ‘Make in India’ initiative and a boost to the indigenisation of medical technology.

Against this backdrop of much expectation, the Union Budget, announced last Saturday, allocated ₹33,150 crore for health, a reduction of 5.7 per cent over the last fiscal announcement of ₹35,163 crore, which incidentally was reduced by 20 per cent in December.

It is ironical that the agenda in the draft National Healthcare Policy did not find a connect in the Union Budget.

If India were to deliver all the initiatives of the draft National Healthcare Policy by 2022, then total healthcare expenditure has to move upwards to 7 per cent of GDP with the Government spend touching 3 per cent of GDP. Budget 2015 was supposed to be the first year towards that goal.

The Budget’s boost to health insurance and the proposal to set up AIIMS in five new states will be a step towards larger coverage and affordability.

But extending the tax-free infra bonds beyond roads and railways to create healthcare infrastructure would have been a strong indicator of the Government’s intent to accelerate the development of the sector and link it to the draft national healthcare policy.

Budget 2015

The Budget has been silent on the promise of the Right to Health and the initiatives around it and surprisingly makes no mention of the ‘Make in India’ initiative for medical technology.

WHO, in its ranking of healthcare systems of the world, placed India at a dismal 112th position out of 190 countries.

While the Budget focused on changing the tax regime, kick-starting infrastructure and sharing more with the states for their development, it certainly did nothing transformational for the healthcare sector.

The sector still continues to struggle for the Finance Minister’s attention.

The writer is Chairman, Medwell Ventures & former Group CEO, Fortis Healthcare & Wockhardt Hospitals