Healthcare: Gujarat government’s low budgetary provisioning has resulted in high out-of-pocket expenditure for the poor

Mushrooming private healthcare in Gujarat
Mushrooming private healthcare in Gujarat

By Mahender Jethmalani*

The Millennium Development Goals have helped draw attention to the need for ensuring universal healthcare coverage in many low- and middle-income countries. The 58th session of the World Health Assembly in 2005 defined universal coverage as ensuring access to key promotive, preventive, curative, and rehabilitative health interventions for all at an affordable cost (World Health Assembly, 2005). According to UNDP’s Global Human Development Report (2014,) India ranks 135th out of 187 countries, marginally higher than many of its South Asian neighbours. However, India is far behind its immediate neighbours on health and quality of life indicators. Despite scoring low on almost all health parameters, India’s public spending on health is only around 1 percent of Gross Domestic Product (GDP). The combined expenditure on health by the Government of India and States remained below 1 percent of GDP till 2008-09. In 2013-14, though lately it has increased marginally to about 1.3 percent of GDP.

Low levels of provisioning for health by the government have resulted in high out of pocket (OOP) expenditure. In many state, according to some estimates, nearly 70 percent of healthcare is provided by the private sector. This, along with lack of availability of generic medicines, increases the OOP expenditure. The low public spending also manifests in the form of poor infrastructure in health sector and inadequate human resources.

This, in turn, adversely affects the quality of health services resulting in poor health outcomes. Thus, keeping in view the shortages in human resources and inadequate infrastructure, there is an urgent need to augment resources for the health sector. Along with the need for augmenting resources for the health sector, there is also a need for better utilisation of the existing resources.

The Gujarat government’s expenditure for providing health care and family welfare services is less than 1% of GSDP (Gross State Domestic Product), while the World Health Organization (WHO) recommends at least 3%. Gujarat’s spending on health and family welfare is just 5% of its total budget. Thus, the state needs to enhance its health budget by three times to reach the ideal international norm.

budget1The estimated per capita expenditure in 2015-16 of the Gujarat government  for providing healthcare services to the state population is  Rs 1,145 per annum for the state’s 6.03 crore population (Census 2011). If the population is taken to be 6.5 crore, which is the current estimate for 2015, the per capita expenditure figures of the government would be further reduced.  The actual per capita expenditure by the state government for providing health care was just Rs 744.44 in 2013-14.

State health budgets for 2014-15 divided by the Census 2011 state populations show that while Gujarat’s per capita public expenditure on health was Rs. 1161, for Goa it was Rs 3,828 and for Mizoram it was Rs 3087 while for Kerala it was Rs 1292.

Due to low budgetary provisions for healthcare, there is high Out-of-Pocket expenditure by families which hampers development of the family, they have to curtail nutrition, other consumption, perhaps withdraw children from schools and colleges. Girls are the first victims being denied education and nutrition.

budget2The state government’s plan expenditure for Health care and Family welfare for the year 2015-16 is Rs 6593 crore, which is 8.32% out of state’s Plan outlay. The overall estimated expenditure for health and Family welfare department is Rs 7,781 crore, which is 5% of out of state’s total expenditure.

budget3The lower budgetary expenditure and many existing vacancies in Primary Health Centres (PHCs) and Community Health Centres (CHCs) centres and the poor facilities to doctors have resulted in huge vacancies of trained doctors at each level. The National Rural Health Mission (NRHM) data substantiate the vacancies of trained doctors.

The above situation has resulted the mushrooming of the private sector, and the government has been facilitating the privatization of healthcare services, instead of improving its delivery of services through PHCs, CHCs. Actually, the government should proactively make efforts for improving the health care services, enhance allocation, regulate the private sector and new graduate doctors and compel them to join the rural health care services.

*Pathey Budget Centre, Contact:



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