Economic Survey 2023: Governments’ expenditure on health sector reached 2.1% of GDP in FY23

The Economic Survey 2023 tabled in the Rajya Sabha on January 31 said that the central and state governments’ budgeted expenditure on the health sector reached 2.1 percent of the Gross Domestic Product (GDP) in 2022–23, while the revised estimate the year before was 2.2 percent of the GDP.

In comparison, 1.6 percent of the GDP was spent by the Centre and state governments on health in 2020–21. The share of expenditure on health in the total expenditure on social services, according to the survey report, has increased from 21 percent in 2018–19 to 26 percent in 2022–23.

The National Health Policy, 2017 envisages as its goal the attainment of the highest possible level of health and well-being for all at all ages, through a preventive and promotive healthcare orientation in all developmental policies, and universal access to good quality healthcare services without anyone having to face financial hardship as a consequence, it underlined. "This would be achieved through increasing access, improving quality, and lowering the cost of healthcare delivery."

Accordingly, the policy recommended an increase in the Government’s health expenditure from the existing 1.2 percent of GDP to 2.5 percent of GDP by 2025. Also, the Fifteenth Finance Commission, in its report, recommended that public health expenditures of the Union and States together be increased progressively to reach 2.5 percent of GDP by 2025.

"In keeping with this objective, Central and State Governments’ budgeted expenditure on the health sector reached 2.1 percent of GDP in FY23 (BE) and 2.2 percent in FY22 (RE), against 1.6 percent in FY21," said the report tabled by Union Finance Minister Nirmala Sitharaman.

The report showed that while the expenditure on health was 1.3 percent of the GDP in 2015-16, it rose by only 0.1 percent in the next fiscal year and stayed there for four years before rising to 1.6 percent in 2020-21.

It also revealed that while the government's expenditure on health, out of total expenditure, was 4.7 percent in 2015–16, it grew to 6.9 percent in 2022–23. The government’s expenditure on the social sector, on the other hand, grew from 24.3 to 26.6 percent.

As per the report, the social security expenditure on health, which includes the social health insurance programme, government-financed health insurance schemes, and medical reimbursements made to government employees, has increased from 6 percent in 2013–14 to 9.6 percent in 2018–19. "This is a significant increase, which shows that the citizens are better equipped and better provided in terms of healthcare at their doorstep, making it more accessible," said the survey report.