BMJ 2015;350:h1632 doi: 10.1136/bmj.h1632 (Published 9 April 2015)
Page 1 of 2
Views & Reviews
VIEWS & REVIEWS PERSONAL VIEW
Deep cuts to India’s health spending will delay universal access to healthcare Jayati Ghosh reflects on the government’s decision, which reduces already paltry health spending even further Jayati Ghosh professor of economics at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India In the current fiscal year (1 April 2014 to 31 March 2015) the Indian government, which came to power in May 2014, has slashed spending by as much as 20-50% in several critical areas of health spending, when compared with its own budgetary promises.1 2
This was evident from about mid-November, when the finance minister announced that tax collections were below expectations, and so he proposed cutting public spending to meet the fiscal deficit target. These cuts were made without any public accountability—and without public knowledge—and some budgets, particularly in the health and social sectors, were cut much more sharply than others. Capital spending that provides building for hospitals and clinics and provides other basic amenities made up only 52% of the budgetary outlay. Spending on the National Health Mission (NHM), which is designed to provide basic services on the ground through a network of accredited social health activists (ASHAs) who are paid a pittance every month, was cut by about 20%, as were the transfers to state governments to fund their health plans. As a result the NHM is in a mess, ASHAs in several states have not received their tiny salaries for the past 3-6 months, and many activities have come to a standstill. Similarly, the Integrated Child Development Services (ICDS) scheme, which provides nutrition and other services to pregnant and lactating mothers and infants, received about 10% less than was budgeted.
Sharper cuts are coming
In the coming fiscal year further cuts are likely to be even sharper, because the amounts budgeted for have dropped considerably.3 The ICDS budget has been slashed by more than half, and the NHM budget has been cut by a further 17%. Total health spending by the central government in the coming year will be at almost the same nominal level that it was at two years ago, which is a substantial decline in real terms and as a share of gross domestic product (GDP).
The central government’s argument is that state governments should take up more of the burden of this spending now that they have a larger share of tax revenues thanks to more devolution awarded by the Finance Commission. But the total increase in states’ share of tax revenues is only 0.7% of GDP, and this has to fund a range of activities because the central government has also reduced its spending on other sectors, including sanitation and education.
Massive underfunding of health is evident not just through inadequate provision and poor quality of public health services but also in the large shortfalls in terms of healthcare staff, with huge shortages of doctors, nurses, and health workers at primary health centres, as well as specialists such as surgeons, obstetricians, and gynaecologists at community health centres. These large gaps also affect the required physical infrastructure, which has some of the worst ratios of clinics and hospital beds per head of population in the world. In the fiscal year 2013-14 public spending on health by the central and state governments together amounted to only 1.3% of GDP. As a result, out-of-pocket spending by households is estimated to be about 70% of total health spending in the country—of which over 60% is simply on the purchase of drugs.
Universal coverage? The Bharatiya Janata Party, which swept to power in the general election of 2014, promised in its election manifesto to increase access to healthcare, improve quality, and lower costs. It stated that the “BJP accords high priority to [the] health sector, which is crucial for securing the economy. The overarching goal of healthcare would be to provide health assurance to all Indians and to reduce the out-of-pocket spending on healthcare.”4 5 Obviously, universal access to healthcare cannot be achieved without significantly increasing public spending. The government so far has not just belied these promises; it has done precisely the opposite of them. Its deep cuts in health spending in the current year and the allocation of even smaller
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BMJ 2015;350:h1632 doi: 10.1136/bmj.h1632 (Published 9 April 2015)
Page 2 of 2
VIEWS & REVIEWS
amounts in the budget for the coming year are likely to throw the entire government health sector into disarray. Even the nascent attempt to provide universal health coverage through relatively limited insurance provision is likely to be stillborn because of inadequate resources for public underwriting of the insurance premiums, as this too has been effectively handed over to state governments.
In what is still largely a poor country such low levels of public spending are indefensible. They contribute not only to the poor indicators of health evident in most parts of India but also to growing inequality in access to healthcare. Well equipped private “superspecialty” hospitals flourish, with demand from India’s wealthy classes and medical tourists from abroad, while most of the population endures inadequate treatment at the hands of poorly trained local practitioners and cannot afford the drugs or treatment for serious illnesses that are increasingly widespread.
For personal use only: See rights and reprints http://www.bmj.com/permissions
Competing interests: I have read and understood the BMJ policy on declaration of interests and have no relevant interests to declare. Provenance and peer review: Commissioned; not externally peer reviewed. 1 2 3 4 5
Mudur G. Experts question how India will meet promises on public health after cut in budget for 2015-16. BMJ 2015;350:h1244. Bagcchi S. India cuts health budget by 20%. BMJ 2015;350:bmj.h4. Chatterjee P. Manifestos for health: what the Indian political parties have promised. BMJ 2014;348:g2703. Bharatiya Janata Party. Manifesto 2014. www.bjp.org/images/pdf_2014/full_manifesto_ english_07.04.2014.pdf. The Hindu. Full text of budget 2015-16 speech. 28 February 2015. www.thehindu.com/ news/resources/full-text-of-budget-201516-speech/article6945026.ece.
Cite this as: BMJ 2015;350:h1632 © BMJ Publishing Group Ltd 2015
Subscribe: http://www.bmj.com/subscribe
Page 1 of 2
Views & Reviews
VIEWS & REVIEWS PERSONAL VIEW
Deep cuts to India’s health spending will delay universal access to healthcare Jayati Ghosh reflects on the government’s decision, which reduces already paltry health spending even further Jayati Ghosh professor of economics at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi, India In the current fiscal year (1 April 2014 to 31 March 2015) the Indian government, which came to power in May 2014, has slashed spending by as much as 20-50% in several critical areas of health spending, when compared with its own budgetary promises.1 2
This was evident from about mid-November, when the finance minister announced that tax collections were below expectations, and so he proposed cutting public spending to meet the fiscal deficit target. These cuts were made without any public accountability—and without public knowledge—and some budgets, particularly in the health and social sectors, were cut much more sharply than others. Capital spending that provides building for hospitals and clinics and provides other basic amenities made up only 52% of the budgetary outlay. Spending on the National Health Mission (NHM), which is designed to provide basic services on the ground through a network of accredited social health activists (ASHAs) who are paid a pittance every month, was cut by about 20%, as were the transfers to state governments to fund their health plans. As a result the NHM is in a mess, ASHAs in several states have not received their tiny salaries for the past 3-6 months, and many activities have come to a standstill. Similarly, the Integrated Child Development Services (ICDS) scheme, which provides nutrition and other services to pregnant and lactating mothers and infants, received about 10% less than was budgeted.
Sharper cuts are coming
In the coming fiscal year further cuts are likely to be even sharper, because the amounts budgeted for have dropped considerably.3 The ICDS budget has been slashed by more than half, and the NHM budget has been cut by a further 17%. Total health spending by the central government in the coming year will be at almost the same nominal level that it was at two years ago, which is a substantial decline in real terms and as a share of gross domestic product (GDP).
The central government’s argument is that state governments should take up more of the burden of this spending now that they have a larger share of tax revenues thanks to more devolution awarded by the Finance Commission. But the total increase in states’ share of tax revenues is only 0.7% of GDP, and this has to fund a range of activities because the central government has also reduced its spending on other sectors, including sanitation and education.
Massive underfunding of health is evident not just through inadequate provision and poor quality of public health services but also in the large shortfalls in terms of healthcare staff, with huge shortages of doctors, nurses, and health workers at primary health centres, as well as specialists such as surgeons, obstetricians, and gynaecologists at community health centres. These large gaps also affect the required physical infrastructure, which has some of the worst ratios of clinics and hospital beds per head of population in the world. In the fiscal year 2013-14 public spending on health by the central and state governments together amounted to only 1.3% of GDP. As a result, out-of-pocket spending by households is estimated to be about 70% of total health spending in the country—of which over 60% is simply on the purchase of drugs.
Universal coverage? The Bharatiya Janata Party, which swept to power in the general election of 2014, promised in its election manifesto to increase access to healthcare, improve quality, and lower costs. It stated that the “BJP accords high priority to [the] health sector, which is crucial for securing the economy. The overarching goal of healthcare would be to provide health assurance to all Indians and to reduce the out-of-pocket spending on healthcare.”4 5 Obviously, universal access to healthcare cannot be achieved without significantly increasing public spending. The government so far has not just belied these promises; it has done precisely the opposite of them. Its deep cuts in health spending in the current year and the allocation of even smaller
[email protected] For personal use only: See rights and reprints http://www.bmj.com/permissions
Subscribe: http://www.bmj.com/subscribe
BMJ 2015;350:h1632 doi: 10.1136/bmj.h1632 (Published 9 April 2015)
Page 2 of 2
VIEWS & REVIEWS
amounts in the budget for the coming year are likely to throw the entire government health sector into disarray. Even the nascent attempt to provide universal health coverage through relatively limited insurance provision is likely to be stillborn because of inadequate resources for public underwriting of the insurance premiums, as this too has been effectively handed over to state governments.
In what is still largely a poor country such low levels of public spending are indefensible. They contribute not only to the poor indicators of health evident in most parts of India but also to growing inequality in access to healthcare. Well equipped private “superspecialty” hospitals flourish, with demand from India’s wealthy classes and medical tourists from abroad, while most of the population endures inadequate treatment at the hands of poorly trained local practitioners and cannot afford the drugs or treatment for serious illnesses that are increasingly widespread.
For personal use only: See rights and reprints http://www.bmj.com/permissions
Competing interests: I have read and understood the BMJ policy on declaration of interests and have no relevant interests to declare. Provenance and peer review: Commissioned; not externally peer reviewed. 1 2 3 4 5
Mudur G. Experts question how India will meet promises on public health after cut in budget for 2015-16. BMJ 2015;350:h1244. Bagcchi S. India cuts health budget by 20%. BMJ 2015;350:bmj.h4. Chatterjee P. Manifestos for health: what the Indian political parties have promised. BMJ 2014;348:g2703. Bharatiya Janata Party. Manifesto 2014. www.bjp.org/images/pdf_2014/full_manifesto_ english_07.04.2014.pdf. The Hindu. Full text of budget 2015-16 speech. 28 February 2015. www.thehindu.com/ news/resources/full-text-of-budget-201516-speech/article6945026.ece.
Cite this as: BMJ 2015;350:h1632 © BMJ Publishing Group Ltd 2015
Subscribe: http://www.bmj.com/subscribe
