Analyzing India’s Historic Healthcare Expenditure

Focus on public health and expenditure on healthcare infrastructure in India has been, historically speaking, “grossly inadequate”

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The Covid-19 pandemic has shaken India to its core. The tall, tsunami-like waves of infections swept India’s healthcare system off its balance, with the latter barely holding on. While the idea that the pandemic was “unexpected and took the world by surprise” is understandable, a peek into historical focus on public health systems and expenditure on the healthcare industry reflects India’s lackadaisical attitude toward the most heavyweight issue of electoral politics.

The country has seen a greater development of the healthcare sector in the new millennium. The last two decades, ruled by the United Progressive Alliance (UPA) and the National Democratic Alliance (NDA), focused on developing public health systems and increasing the country’s budgetary allocation toward health. NDA’s Union Budget for FY 2021–2022, as presented in February this year, has allocated INR 73,932 crore, which is the highest the Indian government has ever allocated toward healthcare. However, this still does not fare with the 2017 National Health Policy recommendation of allocating 2.5% of the union budget to the health sector.


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India’s “Health” at Independence

The state’s commitment at the time of Independence to provide for the health of the people had numerous contradictions and fractures, which made the state ineffective in the field of public health, writes Historian and Professor Sunil Amrith in a 2007 paper titled “Political Culture of Health in India.” He argues that the national movement’s initial commitment to state-sponsored welfare arose from democratic as well as population quality and quantity concerns. “The depth of ambition for public health was unmatched by infrastructure and resources; as a result, the state relied heavily on narrowly targeted, techno-centric programs assisted by foreign aid,” he writes.

In a 2002 paper, Economists Amartya Sen and Jean Dreze argue that public health has been one of the most neglected aspects of development in India.

Gains made in the realm of public health post-Independence were distributed unequally among regions and social strata. Mr Amrith states that India has experienced a significant and continuous lowering of mortality and a steady increase in life expectancy since independence. “Life expectancy at birth was estimated at 36.7 years in 1951; by 1981 the figure stood at 54 years, and by 2000, it was 64.6. The infant mortality rate fell from 146 per 1,000 in 1951 to 70 per 1,000 half a century later, although the decline in infant mortality slowed or stagnated during the 1990s,” he states.

However, these trends of declining mortality coexisted with increasing variables in general health and disabilities.

The National Planning Commission of the Congress, close to Independence, believed poverty to be a “natural condition” and the root cause of poor public health in India. “The root cause of disease, debility, low vitality and short span of life is to be found in the poverty—almost destitution—of the people,” the NPC declared. For them, the future of India involved a collective, organized, and systemic treatment of improving public health, assuring that health is provided to every citizen as a right.

Mr Amrith further states, “The Bhore report, finally published in 1946, expressed its interest in widening the conception of disease…by the inclusion of social, economic and environmental factors which play an equally important part in the production of sickness.” Hence, public health was firmly associated with plans for economic development, “suggesting that unemployment and poverty produce their adverse effect on health through the operation of such factors like inadequate nutrition, unsatisfactory housing and clothing and lack of proper medical care during periods of illness.”

However, for Mr Amrith, it was the evolution of India’s malaria control policy in the 1950s that encapsulated the political culture of public health that evolved after independence. The National Malaria Eradication Program took up nearly 70% of the national budget reserved for communicable disease control between 1959–1963. The program which envisages itself in the “high-Nehruvian” era points to the contradiction of India’s approach to public health.

“The redemptive narrative of malaria eradication was hollow, as long as mass poverty and social inequalities persisted,” Mr Amrith states.

The campaign suffered in the 1960s due to a grave absence of health infrastructure and general resistance to DDT, the pesticide used to control malaria, primarily because medical surveillance was absent in India at the time. Those in charge of finding infected persons in an area (and treat them by providing anti-malarial drugs) routinely avoided villages that were far away.

Traditionally, India has spent less on health, with 90% of government expenditure being done on revenue sectors. In the country’s first Five-Year Plan, 3.4% of the total investment was done in the health sector. By the eleventh Five-Year Plan, the figure rose to 6.5%.

Outlook on Health in the New Millennium

The new millennium in India ushered in the first non-Congress party’s full term in power. After years of political balancing acts, Atal Bihari Vajpayee-led NDA stuck its foot in the ground.

Two NDA governments later, and while a third NDA government was calling the shots, the condition of healthcare expenditure has improved. India now has an infant mortality rate of 69 years and 4 months, the highest it has ever been. India, while having committed universal healthcare coverage by 2030, will have to raise expenditure on health to at least 2.5% of the GDP by 2025.

Dr Manmohan Singh-led UPA government, which was in power between 2004 and 2014, also made significant developments in the realm of healthcare. As per Indiaspend, life expectancy in India increased by 5 years between 2000–2010. This has also led to an increased population of the elderly. The Infant Mortality Rate also declined from 58 per 1000 live births in 2005 to 44 per 1000 live births in 2011. The party also initiated a number of schemes, the National Rural Health Mission, the Rashtriya Bal Swasthya Karyakram, the Janani Suraksha schemes, and the Rashtriya Swasthya Bima Yojana, which were able to focus on the health of multiple categories of citizens, including rural dwellers, children, and pregnant women.

The public expenditure on healthcare increased from 0.90% in 2000–2001 to 1.35% in 2010–2011, as per WHO and Lok Sabha data. In 2013–2014, the Congress government spent INR 33,278 crore on the healthcare sector. In total, the Manmohan Singh government increased healthcare expenditure (in the union budget) by about 12% every year.

Comparatively, the NDA government has been increasing its healthcare spending by about 20% annually. In his first term, Narendra Modi launched the Ayushman Bharat scheme, which is accolade as the world’s largest government-funded insurance health scheme. Healthcare has been a regular feature of Bharatiya Janata Party’s policies, such as the Swachh Bharat Mission, the Ujjwala scheme, and the Jan Aushadhi scheme. While these are not direct healthcare programs except the Jan Aushadhi scheme, they are greatly connected to the sector.

However, it was only from the 2017 budget that the NDA focused on specialized healthcare schemes, such as eliminating leprosy, filariasis, measles, and kala-azar (black fever). Eradicating tuberculosis (TB) in India by 2025 is also one of the high priority of the NDA government. Launched in 2018, the Ayushman Bharat scheme granted health insurance and allocated subcenters as primary healthcare centers. In the later budgets, the government has granted increased funds to the scheme as well.

India, as per the WHO, has become the only country to reduce the burden of malaria. Significant drops have been witnessed in Odisha.


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Shortcomings

Even with great efforts from multiple governments, the focus on public health and expenditure on healthcare infrastructure in India has been, historically speaking, “grossly inadequate.” These fault lines became much more visible during the onset of the Covid-19 pandemic last year.

The pandemic budget, as announced by Finance Minister Nirmala Sitharaman in the 2021 parliamentary budget session, introduced a policy that aims to develop the primary, secondary, and tertiary levels of healthcare: the PM Atmanirbhar Swasth Bharat Yojana. However, experts say that the allocation comes a little too late. “INR 64,180 crore over six years translates only to about INR 10,700 crore per year. There is no budget line in the demand statement of the Department of Health and Family welfare on this new scheme, so it is not clear what this year’s allocation is either,” Ambedkar University’s Dipa Sinha writes.

She further states that the funds allocated toward healthcare this year are less than the revised estimates of FY 2020–2021, and reiterates the need to allocate at least 2.5% of the GDP toward health expenditure.

As of 2020, India’s healthcare infrastructure facilities fall short of WHO requirements, with only 0.7 hospital beds per 1000 people in the country. While the ratio of bed availability is better in the states of Kerala, Tamil Nadu, Delhi, and West Bengal, a state like Bihar lags with only 0.11 beds per 1000 people. On average, India has only 0.8 doctors per 1000 people.

A premier health institution like the All India Medical Institute of Sciences was first launched under Prime Minister Jawahar Lal Nehru. The rest only happened decades later. Six new AIIMS were announced by Mr Vajpayee in 2003 under the PM Swashtya Suraksha Yojana, but only one established under Dr Manmohan Singh in 2012, along with another separately announced by the latter. Ever since Prime Minister Modi has announced the establishment of 15 new AIIMS within his five years time. But for many, the announcement comes a little too late.

In a recent observation by the Supreme Court is also holds true that the health infrastructure the country inherited over the past 70 years is not adequate.

While Indira Gandhi, as the Prime Minister, introduced multiple schemes, and even increased tax on cigarettes, the gap between the Human Development Index between China, India, and other South-East Asian countries widened. Between 1960 and 1980, India lagged behind in the Human Development Index (for health and education), in comparison with other Asian countries.

India ranked 145th out of 195 countries in terms of accessibility to healthcare in the 2018 Healthcare Access and Quality Index by Lancet, a globally reputed medical journal, which was much lower than Bangladesh, China, and Sri Lanka. A high-level committee on health constituted by the 15th Finance Commission analyzed the country’s healthcare sector in 2019. Headed by AIIMS Director Dr Randeep Guleria, the committee stated that India will need to allocate increased funds to improve its healthcare services. “To meet the ambitious targets of improvement in health services, there is a need for a larger allocation of funds to the health sector,” it noted.