Investment in Health Care:

Despite years of strong economic growth and increased Government health spending in the
11th Five Year plan period, the total spending on healthcare in 2011 in the country is about
4.1% of GDP. Global evidence on health spending shows that unless a country spends at least
5–6% of its GDP on health and the major part of it is from Government expenditure, basic
health care needs are seldom met. The Government spending on healthcare in India is only
1.04% of GDP which is about 4 % of total Government expenditure, less than 30% of total
health spending. This translates in absolute terms to Rs. 957 per capita at current market prices.
The Central Government share of this is Rs. 325 (0.34% GDP) while State Government share
translates to about Rs. 632 on per capita basis at base line scenario. Perhaps the single most
important policy pronouncement of the National Health Policy 2002 articulated in the 10th
, 11th
and 12th Five Year Plans, and the NRHM framework was the decision to increase public health
expenditure to 2 to 3 % of the GDP. Public health expenditure rose briskly in the first years of
the NRHM, but at the peak of its performance it started stagnating at about 1.04 % of the
GDP. The pinch of such stagnation is felt in the failure to expand workforce, even to train and
retain them. This reluctance to provide for regular employment affects service delivery,
regulatory functions, management functions and research and development functions of the
Government. Though there is always space to generate some more value for the money
provided, it is unrealistic to expect to achieve key goals in a Five Year Plan on half the
estimated and sanctioned budget. The failure to attain minimum levels of public health
expenditure remains the single most important constraint. While it is important to recognize
the growth and potential of a rapidly expanding private sector, international experience (as
evidenced from the table below) shows that health outcomes and financial protection are
closely related to absolute and relative levels of public health expenditure.
Country Total Health Exp per
capita (USD) - 2011

Country Total Health Exp per
capita (USD) - 2011
Total Health Exp as %
of GDP - 2011
Govt. Health Exp as
% of Total Health Exp
- 2011
Life Expectancy at
birth (years) 2012
India $62 3.9% 30.5% 66
Thailand $214 4.1% 77.7% 75
Sri Lanka $ 93 3.3% 42.1% 75
BRIC Countries
Brazil $ 1119 8.9% 45.7% 74
China $ 274 5.1% 55.9% 75
Russia $803 6.1% 59.8% 69
South Africa $670 8.7% 47.7% 59
OECD Countries
USA $ 8,467 17.7% 47.8% 79
United Kingdom $ 3,659 9.4% 82.8% 81
Germany $ 4,996 11.3% 76.5% 81
France $ 4,968 11.6% 76.8% 82
Norway $ 9,908 9.9% 85.1% 82
Sweden $ 5,419 9.5% 81.6% 82
Denmark $ 6,521 10.9% 85.3% 80
Japan $ 4,656 10% 82.1% 84