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Aamir Khan’s Dream Of 8% (Of GDP) Healthcare Spend

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Healthcare budgets in India often attract criticism, if only for the lack of it. Only 20% of the total health expenditure in India is financed by the Union & State Governments, a meagre contribution compared to other developing nations.


Out of pocket expenditure on health is more than 2/3rds of total health spend in India. Rural households account 62% of this. IndiaSpend’s Sourjya Bhowmick provides an India healthcare snapshot which looks at aggregate spends as well as the National Rural Health Mission (NRHM) – a `flagship’ scheme.


Let’s start with the Union Budget 2012. The Ministry of Health and Family Welfare has a budget of Rs 34,488 crore this year. It includes all the departments of Health and Family Welfare, Aids Control, Health Research and Ayurveda, Yoga, Unani, Siddha and Homoepathy (AYUSH). The following table will give you an idea of total health expenditure over the years;


Year Budget Increase
2012-2013 34,488 4,032
2011-2012 30,456 5,302
2010-2011 25,154 2,513
2009-2010 22,641 4,518
2008-2009 18,123

(Rs Crore)

Source: Union Budget


The Department of Aids Control got its own budget from 2010-2011. This was preceded by the National Aids Control Programme which was under the Department of Health and Family Research.


Break Up Of Health Budget


This year’s budget of Rs 34,488 crore is split amongst 4 departments. The Department of Health & Family Welfare gets Rs 30,702 crore. The department of AYUSH is budgeted Rs 1,178 crore this year, Department of Aids Control gets Rs 1,700 crore, Department of Health Research gets Rs 908 crore.


The total healthcare spend for the last 5 years adds up to Rs 1,30,862 crore ($26 billion). A major chunk of which, (Rs 30,702 crore for 2012) goes to the Department of Health and Family Welfare. A recent television programme hosted by Bollywood actor Aamir Khan asked some tough questions on the state of healthcare system in general the practice of medicine in specific.


India’s International Standing


So what’s the verdict on what has gone into healthcare in the last 5 years and the outcome? Before we come to that, let’s look at where India stacks up in terms of health expenditure against other BRICS (Brazil, Russia, India, China & South Africa) nations.


BRICS country’s GDP Health Expenditure as % of GDP
Brazil $ 2.49 trillion 9
Russia $ 1.85 trillion 5.4
India $ 1.67 trillion 1.4
China $ 7.29 trillion 4.6
South Africa $ 408.07 billion 8.5

*Approximate GDP data as on 2011 and Health Expenditure data as on 2009.

Source: World Bank


NRHM Financials


A major step towards reforming healthcare was initiated with the National Rural Health Mission (NRHM) which was launched in April 12, 2005. NRHM had set itself targets which were to be achieved by 2012. Most of them are lagging behind. The following table illustrates the budget of NRHM over the last five years;


Year Budget Increase
2012-2013 18,515 2,374
2011-2012 16,141 2,231
2010-2011 13,910 1,381
2009-2010 12,529 1,743
2008-2009 10,786

Rs Crore

Source: Union Budget


NRHM falls under the Department of Health and Family Welfare. The stress on NRHM is evident from the fact that of the Rs 30,702 crore earmarked for the Department of Health and Family Welfare in Budget 2012, Rs 18,515 crore is for the NRHM. At the same time, it is observed that the three other departments of the Health Ministry do not get funded that much. Around Rs 3,786 crore is budgeted in totality to three departments this year.


We earlier wrote about the challenges and achievements of NRHM. Interestingly, for all the scams and issues like absenteeism and shortfall in physical infrastructure, the NRHM has been the only ray of light in India’s healthcare scenario.


In the last 5 years, thanks to the NRHM;

  • Number of Sub centres increased from 146,026 to 147,069,
  • Doctors at Primary Health Centres increased to 25,870 from 20,308,
  • The number of Auxiliary Nurse and Midwives (ANMs) at Sub Centres and PHCs have increased from 133,194 in 2005 to 191,457 in 2010, up about 44%
  • Specialist doctors at CHCs increased from 3,550 in 2005 to 6,781 in 2010


The public funding of healthcare in India is around 1.4% of GDP. This issue is often discussed in the various documents of the Government and promises and importance of increasing the public expenditure is committed in every year’s Annual report.


The budget increases every year, so does India’s GDP. However, public expenditure on healthcare remains largely the same. Bollywood actor Khan argued that healthcare spends should go upto 8% and even 9% of GDP. Maybe that’s not feasible. But even a 2% contribution seems a while away. Moreover, fixing leakages in current spend will help too.

  1. sampath kumar Reply

    September 14, 2012 at 2:24 pm

    it should be every indians dream..

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