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An Estimate of Public Expenditure on Health in India

Mita Choudhury
H.K. Amar Nath

National Institute of Public Finance and Policy (NIPFP)
18/2 Satsang Vihar Marg
New Delhi
May 2012

An Estimate of Public Expenditure on Health in India
The level of public spending on health has been a widely discussed issue in India in recent times. Various research studies as well as policy documents have repeatedly highlighted the low level of public spending on health in India.1 In particular, public spending on health as a per cent of GDP has been the focus of discussions, as it is an indicator of the priority accorded to health in the planning process of the country. Policy documents like the
Approach Paper to the Twelfth Five Year Plan (2012 to 2017), the High Level Expert
Group for Universal Health Coverage (HLEG), the Programme Implementation Framework of the National Rural Health Mission (NRHM) and the Report of the National Commission on Macroeconomics and Health (NCMH) have all endorsed the need to raise the level of public spending on health in India from around one per cent to 2 to 3 per cent of GDP.
Monitoring the progress towards achieving the target level of public spending on health has been difficult, due to ambiguity in the definition of health expenditure used, and the corresponding figures reported by different government agencies. The latest Economic Survey,
2011-12 of the Government of India suggests that public spending on health was around
1.35 per cent of GDP in 2010-11 (R.E.). It is however, not clear whether this estimate refers only to health expenditure or includes water supply and sanitation also. The Approach Paper of the Government of India to the Twelfth Five Year Plan indicated that health expenditure alone as a per cent of GDP was about 1.4 per cent (B.E.) in 2011-12. It also mentioned that if one included

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