Rise in government health spending with lower costs

Government health expenditure in India rose from 1.13% of GDP in 2014-15 to 1.84% in 2021-22, with its share in total health spending increasing from 29.0% to 48.0%. Per capita spending has tripled, and out-of-pocket costs decreased from 64.2% to 39.4%. Dr. V K Paul highlighted over Rs 1 lakh crore in savings from the Ayushman Bharat PMJAY scheme.

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The share of government health expenditure in India’s total GDP has risen from 1.13% in 2014-15 to 1.84% in 2021-22, according to the National Health Account (NHA) estimates for 2020-21 and 2021-22 released on Wednesday. Additionally, the proportion of government health expenditure in total health expenditure has increased from 29.0% in 2014-15 to 48.0% in 2021-22. The per capita government spending on healthcare has tripled during this period.

Dr. V K Paul, Member (Health) of NITI Aayog, noted the decline in out-of-pocket expenditure as a share of total health expenditure, which decreased from 64.2% in 2013-14 to 39.4% in 2021-22, indicating a very positive trend. Dr. Paul emphasized that “more than Rs 1 lakh crore savings have accrued from the Ayushman Bharat PMJAY, and this has had a positive impact on the recent NHA estimates.” He also mentioned that other initiatives, such as the Free Dialysis scheme launched in 2015-16, have benefited 25 lakh people.

Union Health Secretary Apurva Chandra commented that “a substantial increase has been noticed in the health expenditure of the government while the out-of-pocket expenditure has come down, which is a good sign.” He pointed out that the total health expenditure has significantly increased, reflecting the government’s emphasis on health. The ongoing decline in out-of-pocket expenditure in overall health spending validates the substantial efforts made by the government to ensure financial protection and Universal Health Coverage for its citizens.