Indian government proposes quadrupling healthcare spending to 2.5% of GDP in five years

BMJ 2015; 350 doi: (Published 02 February 2015) Cite this as: BMJ 2015;350:h556

Inefficient public health spending in India

Indian government’s ambitious proposal in the draft National Health Policy – 2015 (NHP2015) to quadruple public health spending is a welcome step [1]. Although India is not even halfway to the National Health Policy – 2002 (NHP2002) proposal to increase public health spending to 2-3% of GDP as India’s public health spending is currently around 1.04% of GDP [2].

The main problem is under-utilization of available funds. Data show that between 2007 and 2013, 31% of funds allocated to the Ministry of Health and Family Welfare, Government of India (MoHFW) remained unspent [3]. The utilization of funds by various departments under MoHFW was 35-79%. The Department of Health Research spent only 50% of allocated $823 million and Department of AIDS Control (National AIDS Control Organization, NACO) spent merely 35% of allocated $1188 million ($1=₹ 63) [3]. There are reports that red tape in MoHFW and NACO lead to delays in decision making causing shortage of drugs and testing kits and affecting around 1 million people living with HIV/AIDS (PLHIV) in India [4]. Despite these reports, it is interesting that NHS2015 proposes to purchase mainly from public providers and purchasing from private providers only for supplementation whereas public providers are known for inefficiencies and delays.

While increasing the public health funding it is important that Indian Government works on healthcare reforms and makes sure that the allocated funds are efficiently, effectively and timely utilized. Regrettably NHS2015 draft does not say much about addressing this pervasive problem.

1. Bagcchi S. Indian government proposes quadrupling healthcare spending to 2.5% of GDP in five years. BMJ 2015;350:h556.
2. Ministry of Health and Family Welfare. National health policy 2015—draft. Dec 2014.
3. Accountability Initiative. Infographic: The curious case of expired funds.
4. Live Mint. Red tape on grant delayed care for HIV patients, says Global Fund.

Competing interests: No competing interests

20 February 2015
Mahesh Devnani
Assistant Professor
Department of Hospital Administration, Post Graduate Institute of Medical Education and Research, Chandigarh, India
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