State governments in India are consistently falling short of the suggested 8% allocation for health and family welfare departments from their budgets, as outlined in the National Health Policy (2017). The 2024-25 Budget Estimates demonstrate that the average allocation for healthcare across states is at 6.2%, raising concerns among economists about the adequacy of public health funding. This gap between policy guidelines and actual financial allocations highlights the need for increased investment in health infrastructure and services.
Data from PRS Legislative Research, Institute for Policy Research Studies, indicates significant disparities in healthcare spending among states. While states like Goa and Delhi are surpassing the national average allocation, others including Uttar Pradesh, Bihar, and Madhya Pradesh are allocating less than 6% to healthcare. These variations could potentially impact health outcomes, particularly in underserved regions, emphasizing the need for a more equitable distribution of health funding. Moreover, differences in how states classify healthcare-related expenditures contribute to these disparities, showcasing varying approaches in prioritizing and reporting budget allocations.
Central schemes such as Ayushman Bharat and the National Health Mission play a crucial role in influencing healthcare funding by offering essential support. However, the extent of funding varies across states, leading to distinct patterns of healthcare expenditure. The disparities in healthcare spending could potentially hinder states' ability to attract investments and improve human capital, thus impeding long-term progress and prosperity. Experts emphasize the critical need to recognize the importance of healthcare services in fostering human capital formation and productivity growth to ensure sustainable development in the country.
India's healthcare spending, which currently stands at 1.8% of GDP as of 2023, falls significantly below the global average of 6%. Experts advocate for increasing this allocation to 2.5% of GDP to address key issues such as inadequate healthcare infrastructure, rising burden of diseases, and the necessity for equitable access to quality care. The disparities in health budgets across states underscore the urgency of prioritizing the healthcare sector and addressing the vulnerabilities faced by rural and underserved regions due to insufficient funding levels.