Good health contributes to higher productivity, better employment opportunities, and higher life expectancy. Investing in a robust healthcare system can no doubt save lives and lower financial burden and it can also play a part in economic growth progress. Although, India is one of the most populated countries in the world, it only spends 1.2 percent of its GDP on healthcare. In 2018, at the global healthcare quality and access (HAQ) index, India ranked 145 out of 195 countries. In fact, India has been pushing for health care reform through UHC in the last few years. However, adequate resources must be allocated for health expenditure to ensure quality services are rendered to citizens.

Healthcare Expenditure: Economic Growth

India’s defence allocation in 2019 was Rs. 2,82,733 crore while the health allocation was Rs 63,538. Consequently, it spends about 4.8 times more on defence than on healthcare. Health accounts for only two percent of India’s total expenditures as compared to defence that accounts for 11 percent. An individual spends about 62 percent of his savings on health expenses in India, as compared to 13.45 percent in the US and 10 percent in the UK. The per capita expenditure is Rs 458 which is dismal in contrast to countries like the US ($10,224).  More often than not, the consumer pays for his healthcare expenses out of his/her own pocket.

The US’s health expenditure is almost 18 percent of its GDP, and India is still spending less than 1.5 percent of its GDP. This is among the lowest in the world and is an indication that India must improve its health expenditure. As per a NITI Aayog report, in 2017, low-income states with low revenue capacity spent a lot lower on public services like health. India must ensure that its states and union territories expand health coverage to the poor and provide them with affordable options. A need-based funding approach can be implemented and states can be provided with more funds to cater to their populations.

Quality of Healthcare

Poor quality of public healthcare has led to the death of 1.6 million Indians and needs to be addressed. When it comes to quality healthcare, India is placed lower than its BRICs counterparts China, South Africa, Brazil, and Russia as per the HAQ index. When compared to its neighbours, India ranks lower than Bhutan, Sri Lanka and Bangladesh, but higher than Nepal, Pakistan, and Afghanistan on the same index.

Greater expenditure may not automatically contribute to a better quality of healthcare but a better ratio of healthcare professionals per 1000 population can help. The impediments to quality healthcare in India include lack of good infrastructure and low number of PHCs and hospital beds in rural areas. Low-quality healthcare can lead to higher cases of diseases in the country, so access or affordability alone cannot bridge the quality gap.

Increase in expenditure, policy level changes, as well as partnerships with private sectors, can help improve healthcare in India thus helping in economic growth. Investments in healthcare startups can also improve accessibility and affordability. India has already initiated a national health-insurance scheme, Ayushman Bharat that promises to provide Rs five lakh insurance cover to more than 500 million Indians. If India wants to move towards a better healthcare system and achieve UHC goals, it has to focus on efficient spending with respect to healthcare. An improvement in the health of citizens will reflect positively on GPD as a healthy workforce leads to increased productivity.