Health spend of some states as percentage of GSDP has fallen in past decade

As India is on the cusp of hitting a million confirmed Covid cases, the woeful state of India's public health infrastructure is being revealed every day

The spending on the health sector by states has come into focus in the backdrop of the Covid-19 pandemic. As India is on the cusp of hitting a million confirmed cases, the woeful state of India’s public health infrastructure is being revealed every day. As is the case with every crisis, big changes in public health spending and financing are being discussed.

The Fifteenth Finance Commission has decided that there will be separate chapter on health financing in its second report for 2021-22 to 2025-26. The Commission and the World Bank will also study spending on the health sector through centrally sponsored schemes. Additionally, as reported in Business Standard earlier, the Commission is considering comparing and ranking states based on their public healthcare infrastructure and may recommend performance-based grants based on the same.

Public health spending is rather neglected by state governments compared to areas like agriculture, rural sector and others. Now, data compiled by State Bank of India’s Chief Economic Advisor Soumya Kanti Ghosh and his team that shows that from 2010 to 2020, the public health spending for a number of states has actually come down, as a percentage of their respective gross state domestic product, while for others it has remained stagnant.

“The Covid-19 pandemic crisis is a reminder of the importance of investing in the healthcare sector for any country. In India, the total per capita government spending on healthcare has nearly doubled from Rs 1,008 per person in FY15 to Rs 1,944 in FY20 but is still low,” Ghosh said in a note he shared with Business Standard.

“The situation is quite grave for the states like Andhra Pradesh, Uttar Pradesh and Karnataka where the medical and public health expenditure as percentage of Nominal GSDP has declined since FY10. This is quite interesting that some of the small states (mostly in north east regions) spend more on public health compared to big states and national average,” he said.

Ghosh said that the total expenditure by the centre and states for FY20 was Rs 2.6 trillion, or 1.29% of GDP, including establishment expenditure comprising salaries, gross budgetary support to various institutions and hospitals and transfers to states under centrally sponsored schemes such as Ayushman Bharat. Of this, the centre’s share was 25 per cent.

Data compiled by Ghosh’s team shows that as a percentage of GSDP, public health expenditure has come down in states like Andhra Pradesh (0.87 per cent in 2020 versus 1.04 per cent in 2010, Mizoram (2.30 per cent versus 4.47 per cent), Sikkim (1.61 per cent versus 1.82 per cent), Tripura (1.42 per cent versus 1.67 per cent), Delhi (0.85 per cent versus 0.91 per cent), Karnataka (0.52 per cent vs 0.58 per cent), and West Bengal (0.68 per cent versus 0.71 per cent)

There is one state whose spending has over the past ten years remained more or less stagnant – as a percentage of GSDP. And that is Uttar Pradesh (0.91 per cent in 2020 versus 0.92 per cent in 0.91 per cent).

The states which have shown the biggest improvement include Arunachal Pradesh (5.72 per cent in 2020 versus 2.75 per cent in 2010), Bihar (1.25 per cent versus 0.79 per cent), Chhattisgarh (1.40 per cent versus 0.69 per cent), Goa (1.65 per cent versus 0.99 per cent), Jharkhand (1.22 per cent versus 0.90 per cent), Madhya Pradesh (1.10 per cent versus 0.64 per cent), Meghalaya (2.74 per cent versus 1.64 per cent), Nagaland (2.76 per cent versus 1.57 per cent) and Odisha (1.20 per cent versus 0.62 per cent).

Public Health Expenditure as a percentage of GSDP
State	2010	2020	State	2010	2020
Andhra Pradesh

1.04  0.87 Manipur 2.35  2.81 Arunachal Pradesh  2.75  5.72 Meghalaya  1.64  2.74 Assam  1.35  1.76 Mizoram  4.47  2.30 Bihar  0.79  1.25 Nagaland  1.57  2.76 Chhattisgarh  0.69  1.40 Odisha  0.62  1.20 Goa  0.99  1.65 Punjab  0.45  0.69

Gujarat 

0.45  0.49 Rajasthan  0.73  0.97 Jharkhand  0.80  1.22 Sikkim  1.82  1.61 Haryana  0.45  0.58 Tamil Nadu  0.60  0.52 Himachal Pradesh  1.27  1.32 Telangana  0.00  0.40 Jammu and Kashmir  2.40  2.90 Tripura  1.67  1.42

Karnataka 

0.58  0.52

Uttar Pradesh 

0.92  0.91

Kerala 

0.65  0.77 Uttarakhand  0.66  0.92 Madhya Pradesh  0.64  1.10 West Bengal  0.71  0.68 Maharashtra  0.41  0.51 Delhi  0.91  0.85

Source: SBI Research

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