Who benefits from public health spending in India

Abstract

In this report author examine the distribution of public subsidies on health across different groups, classified by socioeconomic status, in India. An analysis of the distribution of these subsidies is relevant for at least three reasons. The first is the high priority the government places on equity in the provision of its services. The second stems from the observation that a number of studies in developing countries from around the world indicate that public subsidies on health are not necessarily targeted well to those most in need, the poor. Finally, there are no studies to date that have examined the distribution of public health subsidies in any kind of detail in India. The Indian government has traditionally assigned a high priority to promoting equity in health whether measured in outcomes, or access to subsidized inputs in health policy statements, as a recommendation of government policy committees such as the Bhore Committee of 1946, or in various Plan documents. The government's use of population based norms in setting up primary health facilities is one indicator of its efforts to ensure equitable access to ambulatory care for the Indian population. Moreover, its provision of subsidized health services is often viewed as a means of providing insurance to those unable to afford the high costs of hospitalizations, and health care in general. The various arms of the government of India and the states spend less than one percent of the nations Gross Domestic Product (GDP), or about 3 percent of all government spending, on health. Although not quite as large as the world average of 5.5 percent of GDP spent on health, it is still quite significant. Health being a legislative subject for the different states, 90 percent of India's health spending is routed through state governments, including state-level schemes funded by the federal government. The remainder is spent either directly by the federal government, or by the various local bodies in different states.

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