Govt health spend must hit 2.5% of GDP by 2025, says Economic Survey

To make universal healthcare accessible and affordable, the public health expenditure of the Centre and states together should be increased in a progressive manner to reach 2.5 per cent of GDP by 2025, the Economic Survey 2022-23 said.

Quoting the 15th Finance Commission and the National Health Policy, 2017, the Economic Survey recommended an increase in the government’s health expenditure from the existing 1.2 per cent to 2.5 per cent of GDP by 2025. Central and states’ budgeted expenditure on the health sector reached 2.1 per cent of GDP in FY23 (BE) and 2.2 per cent in FY22 (RE), against 1.6 per cent in FY21, it noted. The share of expenditure on health in the total expenditure on social services has increased from 21 per cent in FY19 to 26 per cent in FY23 (BE).

At the same time, out-of-pocket expenditure as a percentage of total health expenditure has declined from 64.2 per cent in FY14 to 48.2 per cent in FY19. The social security expenditure on health, which includes the social health insurance programme, government-financed health insurance schemes, and medical reimbursements made to government employees, has increased from 6 per cent in FY14 to 9.6 per cent in FY19.

The Survey said the government has strengthened the health infrastructure — the share of government health expenditure in total health expenditure has increased from 28.6 per cent in FY14 to 40.6 per cent in FY19, with a concomitant decline in out-of-pocket expenditure as a percentage of total health expenditure from 64.2 per cent in FY14 to 48.2 per cent in FY19.

In the past eight years, the number of sub-centres, primary health centres (PHCs), and community health centres (CHCs) has improved, augmenting the rural public healthcare system, along with a rise in doctors, nurses, and other medical personnel. Consequently, a host of health-related indicators such as institutional births, immunisation and, coverage of health insurance, have witnessed an uptrend, as borne out by National Family Health Survey (NFHS) data. Under the Ayushman Bharat programme, 150,000 health & wellness centres (HWCs) have been made operational before December 31, 2022 and Ayushman Bharat programme beneficiaries have touched nearly 220 million.

To further reduce out-of-pocket-expenditure, prices of pharmaceutical products are being kept in check — ceiling prices of 119 formulations under National List of Essential Medicines, 2022 have been fixed by the National Pharmaceuticals Pricing Authority in November 2022. In addition, retail prices for 2,196 formulations have been fixed under the DPCO, 2013. About 9,000 Janaushadhi Kendras offer more than 1,759 medicines and 280 surgical devices at affordable prices to all.

The Survey also mentioned that India has administered more than 2.2 billion Covid-19 vaccine doses across the country, covering 97 per cent of the eligible beneficiaries with at least one dose, and around 90 per cent with two doses, adding that India “may have won a major battle”.