Economic Survey 2023 highlights: Govt health expenditure increased to 40.6 per cent in 2019

The Economic Survey presented in Parliament on Tuesday highlighted the decline in out-of-pocket expenditure. The Economic Survey 2022-23 tabled in Parliament by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman also shows the hike in the share of expenditure on health in the total expenditure on social services, which has increased from 21 per cent in FY19 to 26 per cent in FY23.

New Delhi: The Economic Survey presented in Parliament on Tuesday highlighted the decline in out-of-pocket expenditure, as a percentage of total health expenditure, from 64.2 per cent in FY 14 to 48.2 per cent in FY19. Depicting the importance given by the government on health expenditure and ensuring the provision of quality health facilities to citizens, the survey said that the share of government health expenditure in total health expenditure has increased from 28.6 per cent in FY14 to 40.6 per cent in FY19.

The Economic Survey 2022-23 tabled in Parliament by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman also shows the hike in the share of expenditure on health in the total expenditure on social services, which has increased from 21 per cent in FY19 to 26 per cent in FY23 (BE). “This underscores the rising importance of public healthcare and social security in ensuring universal health coverage,” it said.

This is aligned with the National Health Policy, 2017 which envisages “the attainment of the highest possible level of health and well-being for all at all ages, through a preventive and promotive healthcare orientation in all development policies and universal access to good quality healthcare services without anyone having to face financial hardship as a consequence. “This would be achieved through increasing access, improving quality, and lowering the cost of healthcare delivery,” the survey said.

Accordingly, the policy recommended an increase in the government’s health expenditure from the existing 1.2 per cent to 2.5 per cent of GDP by 2025. Also, the Fifteenth Finance Commission, in its report, had recommended that public health expenditure of the Centre and States together should be increased in a progressive manner to reach 2.5 per cent of GDP by 2025. “In keeping with this objective, Central and State governments’ budgeted expenditure on the health sector reached 2.1 per cent of GDP in FY23 (BE) and 2.2 per cent in FY22 (RE), against 1.6 per cent in FY21,” the survey pointed out.

The National Health Account (NHA) estimates for FY19 show that there has been an increase in the share of Government Health Expenditure (GHE) in the total GDP from 1.2 per cent in FY14 to 1.3 per cent in FY19. Additionally, the share of GHE in Total Health Expenditure (THE) has also increased over time, standing at 40.6 per cent in FY19, substantially higher than 28.6 per cent in FY14.

Overall, for FY19, Total Health Expenditure (THE) for India is estimated to be Rs 5,96,440 crore (3.2 per cent of GDP and Rs 4,470 per capita). Current Health Expenditure (CHE) is Rs 5,40,246 crore (90.6 per cent of THE) and capital expenditures are Rs 56,194 crore (9.4 per cent of THE). Of the Government Health Expenditure (GHE), the Union government’s share is 34.3 per cent and the State government’ share is 65.7 per cent.

In sync with the focus on providing healthcare services to all, which comprises the policy recommendations of the National Health Policy 2017, the government is focusing on primary healthcare expenditure, which has increased from 51.1 per cent in FY14 to 55.2 per cent in FY19. This not only ensures quality services at the grassroots level, but also reduces the chances of ailments requiring secondary or tertiary healthcare services. Between FY14 and FY19, the share of primary and secondary care in the GHE increased from 74.4 percent to 85.7 per cent. On the other hand, the share of primary and secondary care in private health expenditure has declined from 82.0 per cent to 70.2 per cent during the same period.

The social security expenditure on health, which includes the social health insurance programme, government-financed health insurance schemes and medical reimbursements made to government employees, has increased from six per cent in FY14 to 9.6 per cent in FY19. The Economic Survey notes that this is a significant increase, which shows that the citizens are better equipped and better provided in terms of healthcare at their doorstep making it more accessible.