More tears for Maggi than for cuts in govt’s health spends

INDRANIL MUKHOPADHYAY | Updated on January 24, 2018



India’s expenditure on health is just a little over 1% of its income

Health care in India seems to be entangled in a vicious cycle of low public investment and poor health outcomes. Our health achievements are dubious - home to a fifth of the world’s children who die before their fifth birthday and the highest number of mothers who die while giving birth. Poorer neighbours like Bangladesh have higher life expectancy than us.

Yet government spending on health as a part of the country’s income is a little over one percent, among the lowest in the world, worse than countries like Afghanistan and Myanmar. But as a nation we are quite at ease with such unjustifiably low spending: health budget cuts don’t shake our conscience as much MSG (monosodium glutamate) in Maggie noodles does.

The Government defends the worst budget cuts in the last two decades by passing the buck to the States. Their defence, States do not have the capacity to spend, additional money allocated remains un-utilised and hence no point in increasing budgets.

Budget cuts have become a routine affair in the Union Budget since 2010-11. Earlier cuts were disguised under “clever” accounting. Every year the Finance Minister reduced the Revised Estimate (from that allocated in the previous year) and showed increase in the current budget.

Inflation rate remained higher than rate of increase in budget and in real terms both allocation and expenditure went down, thus exposing chronic expenditure cuts (Fig1). The Centre’s spending on health as a percentage of GDP is the lowest in the last four decades (fig 2), even lower than the tainted early 1990s.

Can States be blamed for lower spending by the Centre? States’ balance sheets reveal a different story. Recent trends show that the States are absorbing more Central funds following the introduction of the flagship National Rural Health Mission. During 2008-09 and 2012-13, expenditure by States increased by seven percent, after adjusting for rise in prices (Fig 3) while Union Government expenditure plateaued. States like Tamil Nadu, Himachal Pradesh and Rajasthan have demonstrated that a rejuvenation of the public health system is possible and cost effective as well.

Under Fourteenth Finance Commission, the Union Government is claiming to increase share of states in total taxes and have started withdrawing Central Sponsored Schemes budgets, especially in the social sector. Infrastructure investments, on the other hand have doubled.

The reduced Government spending on health has a perilous effect on the quality of health services delivered through government facilities. Implementation of the National Health Mission has been halted across states. Salaries of doctors and nurses are due; mothers are being denied financial assistance after delivery. There is an unwritten embargo against any new intervention under the NHM. ICDS, one of the oldest programs to improve nutrition is facing its severest crunch.

Several expert groups, Parliamentary Standing Committees have advocated for enhancement of public investment in health to 2.5-3 per cent of GDP. The NDA government seemed to concur, announcing its National Health Assurance Mission. But the budget cuts are a major dampener.

Though health is a State subject, they need to be empowered to invest more in health. But that can’t be at the cost of withdrawal of efforts from the Centre. The central Government needs to enhance its own spending to match State efforts.

A turnaround of public services that the NRHM had triggered in States would be halted if Central funds are reduced. And its tragic impact would be on the millions of people who would die without treatment or get pushed into poverty while seeking medical treatment to save their loved ones.

(The writer is a researcher at the Public Health Foundation of India. The views are personal and do not represent that of the organisation)

Published on June 26, 2015

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