Expenditure on health

Retreat of the state

Print edition : October 16, 2015

At a primary health centre in Ramanathapuram district in Tamil Nadu on March 24. There is a huge shortage of doctors and specialists in rural PHCs. Photo: L. Balachandar

India’s public health expenditure is currently just 1.26 per cent of GDP, and continuous budgetary cuts have left the health infrastructure in a shambles, leaving the door open for private investment.

AT THE BEGINNING OF THE 11TH PLAN PERIOD (2007-12), India’s public expenditure on health as a fraction of its gross domestic product (GDP) stood at 0.9 per cent. The 11th Plan document had projected the expenditure on health to reach 2 per cent of GDP by the end of the Plan period. But, with the yearly budgetary cuts and further cuts on the Budget Estimates (B.E.) during the financial year, public health expenditure was just 1.09 per cent of GDP by the end of that Plan period.

While the World Health Organisation recommended an expenditure of 5 per cent of GDP, Indian experts argued that 2.5 per cent was realistically achievable by the end of the 12th Plan period. Indeed, this was the target recommendation of the High Level Expert Groups set up by the Planning Commission and the Ministry of Health and Family Welfare (MoHFW). However, the Planning Commission had other ideas. It rejected the recommendation and pegged the expenditure at a much less ambitious target of 1.58 per cent in the 12th Plan document on health, which is even lower than the target set in the 11th Plan document.

The Draft National Health Policy (NHP) of 2015, which has formulated the trajectory for slowly mortgaging public health to the private sector, has defended the lower public health expenditure target set by it as follows: “At current prices, a target of 2.5 per cent of GDP translates to Rs.3,800 per capita, representing an almost fourfold increase in five years. Thus a longer time frame may be appropriate to even reach this modest target.”

This is, of course, in keeping with the growing thinking within the government towards increased private sector involvement (see separate story) in providing public health care. Since liberalisation and the neoliberal agenda became part of the government discourse and public policymaking in the 1990s, it is for the first time that the Planning Commission document and the NHP have openly articulated the need for privatisation of public health care. Already, over 70 per cent of the expenditure on health comes from the private sector.

But the trend of budgetary allocations in the last three years of the Plan period (2012-15) suggests that even the target of 1.58 per cent of GDP will not be achievable. The expenditure at the end of 2013-14 (based on Revised Estimates (R.E.) of allocations) stood at 1.16 per cent of GDP. In the financial year (FY) 2014-15, the expenditure (based on B.E.) was expected to touch 1.26 per cent (Table 1). However, because of the drastic across-the-board cuts that were imposed, which included the Health Ministry as well, the expenditure as a share of GDP for 2014-15 is unlikely to improve greatly from the 1.16 per cent of 2013-14. This will, no doubt, impact the quality of health care services in the remaining two years of the Plan.

Figure 1 shows the share of MoHFW/GOI expenditure and that of the States/Union Territories (U.Ts) in the total public health expenditure. It is significant that the contribution of the States/U.Ts has been increasing, and in the last two years, it is about 70 per cent of the total national expenditure. As a share of GDP, the MoHFW expenditure has been dropping to less than 0.3 per cent of GDP (Figure 2), with the States/U.Ts’ share being about 0.86 per cent of GDP. The B.E. allocation for the MoHFW for FY 2015-16, the penultimate year in the Plan period, has been placed at Rs.33,282 crore, a mere 4 per cent increase over the R.E. of Rs.31,965 crore for FY 2014-15, which does not even cover annual inflation. It should be mentioned here that, for consistency, the allocation for the Ministry of AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy), which was spawned off as a separate Ministry from the MoHFW in November 2014, has also been included in these figures. So FY 2015-16 is also unlikely to see a significant improvement in the public health expenditure-GDP metric.

The National Rural Health Mission (NRHM) was one of the flagship schemes the United Progressive Alliance (UPA) government launched. It was launched in April 2005 because of the efforts of the Left to a large extent. It did result in the expansion and strengthening of the health care system in the rural health sector despite the fact that the total investment in the NRHM over the years has been only a third of what was originally envisaged. With its significant achievements, the NRHM demonstrates that it is possible to bring about changes in the public health system even within the existing system despite its various shortcomings if investments are properly directed.

The Bharatiya Janata Party’s election manifesto had claimed that the “NRHM will be radically reformed”. In May 2013, the National Health Mission (NHM) was launched, which consisted of two components, the NRHM and the National Urban Health Mission (NUHM). The funding for the NHM in 2015-16 is Rs.18,295 crore, which is about 55 per cent of the total allocations for health. While this marks an increase of about 3.7 per cent over FY 2014-15 (R.E.), it is a significant drop (of about 20 per cent) from the FY 2014-15 (B.E.) allocation of Rs.21,912 crore. Since FY 2014-15, the allocations for the NRHM are not being separately shown in the Budget figures. However, according to the NRHM website, funding for the mission dropped by about 8 per cent in FY 2014-15 to Rs.16,809 crore from Rs.18,829 crore in FY 2013-14. While what the manifesto implied was not clear, this is the first time since the mission was launched that the funding for the NRHM has actually dropped.

The Indian Public Health Standards (IPHS) set measures for the quality of infrastructure available for health care. As has been mentioned in the separate story, as of March 2014, there is a shortfall (against the IPHS requirement, calculated on the basis of Census 2011) of about 20 per cent in sub-centres (S.Cs), about 23 per cent in primary health centres (PHCs) and about 32 per cent in community health centres (CHCs). Bihar, for example, has a shortfall of 91 per cent in CHCs, 39 per cent in PHCs and 48 per cent in S.Cs, according to Rural Health Statistics (RHS) 2014. Jharkhand has a higher shortfall of 66 per cent in PHCs, 22 per cent in CHCs and 35 per cent in S.Cs. It is interesting to note that while both Chhattisgarh and Jharkhand have large tribal populations, unlike Jharkhand, Chhattisgarh, despite the Maoist insurgency problem, has no shortfall of PHCs and S.Cs and only a marginal shortfall of CHCs. But, it has a serious shortfall of doctors (Figure 3).

Even a State like West Bengal has a 58 per cent shortfall in PHCs and 36 per cent in CHCs. While Delhi has multiple agencies serving the State’s requirement of health centres, like the Centre’s dispensaries under the Central Government Health Scheme, its requirement under the IPHS of the NRHM is far from being met. It has a 67 per cent shortfall of S.Cs, 62 per cent of PHCs and 100 per cent of CHCs! As regards district hospitals, there are only 755 D.Hs across all States, which works out to a lowly 1.14 D.H. a district.

According to a post-Budget analysis by the Accountability Initiative of the Centre for Policy Research (AI-CPR), New Delhi, early this year, the quality of infrastructure in PHCs continues to be low. As of March 2014, only 21 per cent of PHCs were functioning according to the IPHS, which is a marginal increase from 18 per cent in March 2013 and 15 per cent in March 2011. Most PHCs also lack basic infrastructure. As of March 2014, as many as 31 per cent of PHCs did not have a labour room, 5 per cent functioned without electricity and 8 per cent did not have regular water supply, and these numbers have remained unchanged since March 2013.

According to the AI-CPR analysis, between March 2013 and March 2014, the number of PHCs functioning without doctors doubled from 1,072 (4 per cent of total PHCs) to 2,225 (9 per cent of total PHCs). Interestingly, while Bihar had a serious shortfall of PHCs, it had no shortfall in the number of doctors as per the IPHS. The total number of doctors serving in PHCs also fell by 7 per cent, from 29,652 in March 2013 to 27,355 in March 2014. A break-up of these figures in terms of States shows that Chhattisgarh, for example, has a shortfall of 51 per cent in required posts for doctors in PHCs, and 49 per cent of existing posts were vacant. A State like Gujarat, too, had a 23 per cent shortfall of doctors and 41 per cent vacant posts (Figure 4).

The CHCs are meant to have specialists, including surgeons, obstetricians and gynaecologists, paediatricians and physicians. The total number of specialists employed in CHCs has dropped by 30 per cent between 2013 and 2014, from 5,805 to 4,091, making the problem of shortfall of specialists even worse. As a result, the shortfall of specialists as of March 2014 was 81 per cent, an increase of 9 per cent from March 2013. In West Bengal and Uttar Pradesh, the number of specialists decreased hugely, by 89 per cent and 72 per cent respectively. Also, the number of posts sanctioned for specialists is short of the required norms. Only 53 per cent of the required number of 21,452 specialists has been sanctioned as of March 2014.

These are serious infrastructure and human resource issues. While it can be argued that the infrastructure problem can be addressed with sufficient funding—even though that seems difficult to expect given the emerging public health expenditure scenario which is moving towards increased privatisation—the human resource shortfall arises from a fundamental problem associated with medical education in the country, which produces medical graduates who are largely unwilling to serve in rural and remote areas.

As argued in a separate article, a radically different approach, like the proposed Bachelor of Rural Health Care, is required to produce medical professionals with reasonable skills and proficiency appropriate to the region, local environment and prevalent situations. This requires setting up local medical institutions which will draw students from the region and give them appropriate medical education and social skills. But, such efforts are being thwarted by vested interests and the large body of medical professionals with skewed priorities who control medical education in the country through bodies such as the Indian Medical Association and the Medical Council of India. The government is unwilling to push any such idea with appropriate investments because, it has largely mortgaged medical education to the private sector.

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