India keeps tight rein on public health spending in 2015-16 budget

By Aditya Kalra

NEW DELHI (Reuters) - The Indian government on Saturday kept its healthcare budget for 2015-16 on a tight leash and asked states to contribute more funds for running the country's flagship health programmes.

The government announced 297 billion rupees ($4.81 billion) for its main health department, roughly 2 percent higher than current year's revised budget of 290 billion rupees.

It had been expected that Prime Minister Narendra Modi would ramp up central health spending in a bid to achieve his goal of universal health coverage. He has also vowed to revamp the sector and make medical services more affordable for the poor.

"Health has not received adequate attention and allocation in the budget. The promise of universal health coverage will remain unfulfilled unless health is prioritised," K. Srinath Reddy, President of the Public Health Foundation of India, told Reuters.

Asia's third-largest economy spends about 1 percent of its gross domestic product (GDP) on public health, compared with 3 percent in China and 8.3 percent in the United States. Indian states manage their health budgets separately.

Despite rapid economic growth over the past two decades, successive union governments have failed to invest generously in health. An inadequate number of doctors and a poor network of public hospitals, coupled with bureaucratic bungling, means India often struggles to spend its allocated budgets.

The budget documents said states will be asked to increase their share in funding for the National Health Mission, the country's main health programme that provides basic medical services to millions of poor people.

While the government said it will open six new large public hospitals across the country, the financing left many disappointed.

"This budget allocation is not a significant increase to boost Indian public health standards," said a health ministry official in New Delhi who described the budget figures as "discouraging".

($1 = 61.6489 rupees)

(Additional reporting by Zeba Siddiqui in Mumbai and Rajesh Kumar Singh in New Delhi; Editing by Frank Jack Daniel and Louise Heavens)