India’s health expenditure down to 3.2% of GDP in 2018-19

India’s total health expenditure went down from 3.9 per cent of the Gross Domestic Product (GDP) in 2013-14 to 3.2 per cent in 2018-19, according to the latest national health estimates.

Total health expenditure is the money spent by the government, people, private entities and external funding. The report, National Health Accounts Estimates 2018-19, was released September 12, 2022. 

The trend was mirrored by the Union government, whose expenditure on healthcare went down to 1.28 per cent of the GDP in 2018-19 from the previous year’s figure of 1.35 per cent.

As the total healthcare expenditure has increased from 29 per cent in 2014-15 to 40.6 per cent in 2018-19, the decline is even more pronounced. 

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Out-of-pocket expenditure on healthcare by households — a key reason pushing Indians into poverty — has declined by 16 percentage points, from 64.2 per cent to 48.2 per cent in the same period. It was even higher in 2004-2005, at 69.4 per cent.

While this is a welcome improvement, the figure remains significantly higher than the global average, which stands at 18.1 per cent in 2019, as per the World Bank. 

A closer look at the data reveals wide state-wise disparities. In Uttar Pradesh, out-of-pocket health expenditure accounts for 71.3 per cent of the state’s total health expenditure (THE). The state government is responsible for only 24.8 per cent of THE.

Other states with a high out-of-pocket health expenditure share are West Bengal (68.7 per cent of THE), Punjab (65.5 per cent), Odisha (53.2 per cent), Telangana (48 per cent) and Himachal Pradesh (45.8 per cent). 

The economic burden of healthcare in India is largely borne by households that contribute Rs 3,24,717 crore to the current healthcare expenditure. The Union government’s share is Rs 63,256 crore, the state governments’ share is Rs 1,06,056 crore and local bodies contribute Rs 5,451 crore. Non-governmental organisations spend Rs 8,484 crore, while external/donor funding contributes about Rs 2,493 crore.

NHA statistics are critical because they answer “important policy questions such as what are the sources of healthcare expenditures, who manages these, who provides health care services, and which services are utilised,” the report noted. 

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The figures are estimated based on the global standard framework — System of Health Accounts 2011 (SHA 2011) — such that comparisons in healthcare expenditure of different countries across the board can be conducted. 

More than half of the government’s current expenditure (55 per cent) has been on strengthening primary healthcare centres. “This not only ensures quality services at the grassroots level but also reduces the chances of ailments requiring secondary or tertiary health care services,” said Rajesh Bhushan, health secretary, in a September 12 statement.

The increase in social security expenditure of THE — up from 6 per cent in 2013-2014 to 9.6 per cent in 2018-2019 — reflects steps taken to achieve universal health coverage in the country, the health secretary stated. 

“This is a significant increase, which shows that the common people of India are better equipped and better provided in terms of healthcare at their doorstep and making health more accessible,” Bhushan said.