India slashes health budget by 20%
December 24, 2014, 7:06 am

The move could severely tax government-run hospitals and clinics that are invariably over-stretched and under-resourced [Xinhua]

More than 60 billion rupees ($948 million) has been slashed from their budgetary allocation for the year ending 31 March 2015, said officials from the Indian Ministry of Health on Tuesday. The move could severely tax government-run hospitals and clinics that are invariably over-stretched and under-resourced.

Apart from being lowest among BRICS, India’s health expenditure is lower than military expenditure. India spends about 1.3 per cent of its gross domestic product (GDP) on public health while it spends 2.4 per cent on military defense. In contrast, India’s BRICS partner South Africa spent more than 8.5 per cent of GDP on healthcare in 2012.

The Indian Finance Minister Arun Jaitley is struggling to achieve the 2014/15 fiscal deficit target of 4.1 per cent of GDP.

A Reuters report quoted unnamed Indian Health Ministry officials as saying the Finance Ministry has also ordered a spending cut for India’s HIV/AIDS programme by about 30 per cent to 13 billion rupees ($205.4 million).

According to a 2011 study in the medical publication Lancet, 39 million Indians are pushed into poverty every year due to medical costs.

Meanwhile, the neighbouring Chinese government has poured billions of pounds into healthcare reform in recent years, and the system has improved accordingly. Currently, 99 per cent of the rural population gets some kind of insurance, up from 21 per cent a decade ago. China plans to roll out universal coverage by 2020.

India fares poorly in socio-economic indicators, writes development economist, Professor Reeitka Khera.

“India’s use of its meagre public resources is also a cause for concern. Public services tend to have the first claim on public revenues in other countries. With close of half of Indian children being undernourished, one-third being illiterate it is not clear how the ruling class obsessed with “superpower” status hopes to achieve it. The refusal to invest in its main economic “resource” – her own people – will ultimately prove counterproductive for the ruling class as well as ordinary people,” says Khera.

TBP and Agencies