Healthcare Financing in India

Covid-19 pandemic has proven beyond a doubt that neglecting healthcare can be more fatal than the destruction caused by war. So the recent decision taken by the Government of India to increase the outlay by at least 50 per cent in the health sector in the forthcoming budget is a timely one. Along with improving the healthcare facilities in the country, the increased outlay will contribute largely in rejuvenating the economy too. Moreover, it can provide additional funds required for vaccine production and distribution. Hopefully, the budget will take every aspect of healthcare into account before finalising the allocation.

At present, budget allocation for healthcare in India is 67, 111 crore, clearly this is not sufficient and alarmingly it is one of the lowest in the world. India spends only 3.6 per cent of GDP on healthcare, while the US spends 16.9 per cent. Among the BRICS nations too, India stands at the bottom in terms of expenditure in the health sector. Further, only 1.28 per cent of GDP is spent on creating health and related infrastructure. The inadequate allocation in healthcare seriously affected the growth of the sector and has led to today’s sad reality wherein quality healthcare is beyond the reach of many Indian citizens. At present, nearly 80 per cent of ICU beds and ventilators are in private sector. This is why, despite being a favourite destination for medical tourism for  many foreigners, a vast section of Indian populace is still deprived of the benefits of advanced medical sciences. The ongoing pandemic has brought this disparity to light. States which would attract maximum number of medical tourists have failed miserably in containing the Covid-19 situation as government spending in the health sector in these states became minimal over the years.

One can hope that the increased allocation in the health sector will prevent healthcare from completely going into the hands of private players, who are largely driven by profits. As a matter of fact, India is not alone in this, the entire world is suffering from this phenomenon. Medical facilities are becoming costly and going out of the reach of many citizens. But, India as a welfare state cannot allow such a situation to continue. A few years ago, Prime Minister Narendra Modi announced Ayushman Bharat scheme aimed at providing free medical treatment to the poor, yet, there is a lot more to be done. Quality and advanced treatment should be made available to the majority of 130 crore strong Indian citizens at minimal cost. The first step in this regard should be to provide Covid-10 vaccine at an affordable price.

Covid-19 has shown what ails the Indian healthcare system. It has proven that India has requisite expertise and trained medical resources to counter any emergency medical situation. But, it has also shown that the country lacks the infrastructure and funding required to upgrade healthcare to world standards. It is expected that the increased outlay and the five-year investment plan of Rs. 111-trilion together will address the problem adequately and that India can meet any future health challenge effectively.