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Government Spending on Health in India

The macroeconomic and health policy changes in India have generated some hopes, fear and complexity in public health spending. Health policies turned ineffective even to meet the required level of resources for providing basic health facilities. Fund allocation towards rural area (with missing health facility), preventive services, medicines and equipments was recorded to be noticeably low and inadequate with a declining trend. After the National Rural Health Mission (NRHM, 2005), public funds in health somewhat increased but remained lower than ambitious commitment of 2–3 per cent of gross domestic product (GDP). Central fund transfer to state, which was (before NRHM) passing through state budget, now bypasses the state budget. This has resulted in discontinuation of some of the health programmes/schemes running in the states and also made the centre–state finance relation more complex. Adverse macroeconomic conditions, conditional central fund allocation criteria, inadequate absorptive capacity and priority of state are further slowing down the effective policy implementation and progress in health outcomes.