New Delhi: State governments in India are failing to meet the National Health Policy (2017) recommendation of allocating 8% of their budgets to health and family welfare. The 2024-25 Budget Estimates reveal an average allocation of just 6.2% across states, sparking concerns among experts about insufficient public health funding.
Data from PRS Legislative Research highlights significant disparities in healthcare spending. Goa is among the few states meeting the 8% target, while others like Uttar Pradesh, Bihar, and Madhya Pradesh allocate less than 6%, raising concerns about equitable health outcomes.
Variations in classification of expenditures also contribute to these disparities. For instance, Andhra Pradesh and Telangana classify expenses for marginalized communities’ schools under welfare, not education or health. Similarly, Punjab records electricity subsidies for farmers under agriculture, illustrating differing state priorities and reporting practices.
Central schemes such as Ayushman Bharat and the National Health Mission provide vital healthcare funding, though their impact varies by state. Delhi, with its unique governance structure and limited rural areas, demonstrates a distinct pattern in healthcare spending compared to other states.
“Many states fail to recognize the importance of healthcare in fostering human capital and productivity growth,” said Arup Mitra, Economics Professor at South Asian University. “Without stronger healthcare infrastructure, states risk excessive spending on treatment with limited impact on mortality rates. This neglect also hinders investment by compromising the quality of human capital.”
India’s healthcare expenditure, at 1.8% of GDP in 2023, remains far below the global average of 6%. Experts advocate increasing this to 2.5%, focusing on improving infrastructure, tackling non-communicable diseases (NCDs), and strengthening primary healthcare.
“Public health funding is woefully inadequate to address infrastructure gaps, rising NCD burdens, and the need for equitable care,” said JVR Prasada Rao, former Union Health Ministry Secretary. “Disparities in state health budgets show insufficient prioritization of health, leaving rural and underserved regions particularly vulnerable.”
The central government supports healthcare through Centrally Sponsored Schemes (CSS), with the 15th Finance Commission allocating ₹4.4 lakh crore in grants for local bodies between 2021-22 and 2025-26, of which 16% was for healthcare. However, only 80% of the recommended ₹2.5 lakh crore for local bodies has been released, with delays disproportionately affecting urban local bodies and primary healthcare sectors.
Experts warn that without substantial investment in healthcare, states risk undermining human capital development, slowing long-term progress, and perpetuating inequities in health access and outcomes.