Licchavi Lyceum


Licchavi Lyceum

Economic Survey: Health Expenditure in India

Health expenditure in India has been a topic of concern for policymakers, as the country has one of the lowest levels of public spending on health among low and middle-income countries. In this article, we will discuss the current state of health expenditure in India and the challenges that need to be addressed to improve healthcare services in the country.

Health Expenditure in India

Current State of Health Expenditure in India

The expenditure of the central and the state governments on healthcare was 2.1% of GDP in FY23 and 2.2% in FY22, up from 1.6% in FY21.

According to the report, the increase in the share of health spending in total social services spending, which rose from 21% in FY19 to 26% in FY23 (BE), underscores the growing importance of public health care and social security in ensuring universal health coverage.

While Social Security spending on health increased from 6% in FY14 to 9.6% in FY19, the economic report showed that out-of-pocket expenditures (OOPE) as a share of total health spending decreased significantly from 64.2% in FY14 to 48.2% in FY19, reflecting citizens’ improved access to health care facilities.

Challenges in Health Expenditure in India

  1. Low Public Spending: As mentioned earlier, the government’s spending on healthcare is very low compared to other low and middle-income countries. The government’s expenditure on healthcare has remained stagnant at around 1% of GDP for the past decade, which is not enough to provide adequate healthcare services to the population.
  2. Out-of-Pocket Expenditure: With low public spending on healthcare, households are forced to spend a significant portion of their income on healthcare services. According to the National Health Accounts Estimates, 67% of the total health expenditure in India is out-of-pocket expenditure, which puts a significant financial burden on households, especially those from low-income groups.
  3. Inadequate Infrastructure: Another challenge in health expenditure in India is the inadequate infrastructure. The country lacks sufficient hospitals, clinics, and primary healthcare centers, especially in rural areas. This leads to a shortage of healthcare professionals and a lack of access to quality healthcare services, which further adds to the burden of healthcare spending.
  4. Lack of Health Insurance: The majority of the population in India does not have health insurance, which means they have to pay for healthcare services out of their own pockets. This puts an additional financial burden on households, especially during medical emergencies.

To address the challenges in health expenditure in India, the government needs to increase its spending on healthcare, improve the infrastructure of healthcare facilities, and provide health insurance to the population. Increased public spending on healthcare will not only improve access to quality healthcare services but also reduce the financial burden on households. It is essential to prioritize healthcare spending to ensure that every citizen has access to affordable and quality healthcare services.