National Health Policy 2017: Experts say expenditure target low as compared to neighbouring countries


The target of increasing health expenditure to 2.5% of GDP by 2025, set by the National Health Policy 2017, is very low in comparison to what has been achieved by the neighbouring countries, say experts. Discontent over the National Health Policy-2017 continues even though the prime minister has dubbed it a futuristic policy.

Ashok Aggarwal, an advocate and a civil rights activist told Firstpost, “ Increasing health expenditure only upto 2.5%, that too in a period as long as eight years is seen as a trifle variation from what it is now, considering what neighbouring countries are spending on this essential service.” World Bank data shows that India is only ahead of Pakistan and Bangladesh in health expenditure and countries like China and Sri Lanka are way ahead of it in facilitating health care to the citizens. As per the report, India spends a meagre 1.4% of its GDP, which is a few steps ahead of Pakistan and Bangladesh, the neighbouring nations that spend 0.9% and 0.8% of their GDPs respectively on the health sector.

A data of the recent trends in health. Firstpost

A data of the recent trends in health. Firstpost

On the other hand, China and Sri Lanka spend 3.1% and 2% of their respective GDPs on health expenditures. Dismal health expenditure figure has caused massive pressure on the existing health infrastructure, says Aggarwal. “Most of the government hospitals fail to meet the growing patient demands. Many of these hospitals are overcrowded making treatment nearly impossible,” he adds. He also says that since many of the hospitals lack required infrastructure, a patient is often referred from one to another for treatment as a result of which hospitals in Delhi get nearly 40% of its patients from other states.

“ It not only increases the time required for treatment, but also the expenditure, as many government hospitals also charge money for many treatment and services,” he laments. “I have met a person who was asked eight lakhs for kidney transplantion by AIIMS,” he cites an example. Low health budget, he says that also leads to low insurance coverage and high out-of-pocket expenditure.

As per a World Health Organisation study, India features among the countries with high out-of-pocket expenditure where 89.2% of the expenses of medical treatment is borne by the patients.
“In our country high out-of-pocket expenditure in healthcare makes the condition of the patient and his or her family not better than that of a beggar,” he says.

Even the National Health Policy admits that yearly 63 million people are pushed to poverty due to health care costs, thus causing further economic disparity. Not only the goal of increasing health expenditure is low, but also lacks adequate orientation says Dr Jayalakshmi Sridhar to Firstpost. “The National Health Policy 2017 speaks of increasing the health budget in a time-bound manner stepwise. But it does not mention in which year how much of it is going to be increased,” she says.


To attain the target, she says that India needs better budgetary oversight, as to keep tab of how the money is spent and whether it is spent within stipulated time. “We often see cancellation of funds to the central pool due to lack of manpower to implement projects and projects not taking off. To plug this lacuna, the government needs to audit the health sector throughout the year and thus ensure that no fund goes back,” she said.

The earlier health budget accepted during the previous NDA regime, in the year 2002, had set the goal of increasing health expenditure by 2%. But a study conducted by McKinsey and Company shows that during the period 2001 to 2010 India’s investment in health rather declined in comparison the increase of GDP. During the above mentioned period, India’s GDP grew by 14.2% and health expenditure by 12.4%. The difference between Compound Annual Growth Rate of the economy and health expenditure was -1.7%.


Published Date: Mar 21, 2017 08:50 pm | Updated Date: Mar 21, 2017 08:50 pm



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