Home > health, News > Plan to double health spend over next 5 yrs: Ahluwalia

Plan to double health spend over next 5 yrs: Ahluwalia

NEW DELHI (Reuters) – India plans to more than double its health budget over the next five years, a move that would expand access to much-needed health care and reach more voters ahead of 2014 national elections, but could also further stretch government finances.

The UPA government led by Manmohan Singh, under fire from the opposition and civil society groups over various corruption scams and inflation, is trying to win back voters, as it has to face elections in five states next year.

“In the 12th plan…we will be able to increase both centre and state spending (on health) as percentage of GDP somewhere upto 2.5 percent from a little over 1 percent,” said Montek Singh Ahluwalia, deputy chairman of the planning commission, on Friday.

India’s plan panel — which recommends the allocation of federal funds for key national programmes — is expected to finalise the spending plan for the next five years to March 2017 by December.

Private households contribute to about three-fourth of total healthcare spending, which is at about 4 percent of the GDP – estimated at $1.6 trillion.

The government is struggling to meet a deficit target of 4.6 percent of GDP.

The World Bank has said despite improvement in health indicators in the country, slow progress has failed to match the impressive gains in economic growth during the past decade.

Ahluwalia said the government could focus on the poor – about 50 percent of the total 1.2 billion population – who could not afford health services, while partly subsidising the middle income groups.

A committee appointed by the Prime Minister to suggest universal health insurance coverage for all Indians is expected to submit its report by month end, Ahluwalia said.

Under the proposed universal health insurance scheme, the premium may be linked to income levels of the beneficiaries, although the government may pay the entire premium for those below the poverty line, he said.

(Reporting by Manoj Kumar; Editing by Aradhana Aravindan)

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