India’s creditable score as the fastest-growing economy and its resilience in facing down challenges posed by the 50 per cent tariff hike for its merchandise goods in the biggest market of the United States (US) appear to be self-praise to keep up the confident populace of one-plus billion. Lest the reality should sound far from wholesome, one must look at the parlous state of primary education and primary health facilities for millions of have-nots, for whom the government promised to provide free services at a minimal level. Even this minimal level of basic amenities had gone off the rails since the 1990s when the IMF loan it contracted to counteract the balance of payments crisis entailed savage cuts on all ‘non-essential’ expenditure that exacted its deleterious but direct impact on health and education assiduously supported earlier by the authorities.
Since then, and prodded by the IMF and the World Bank, the country has been compelled to turn to the private sector for health infrastructure through its investments. According to the former Health Secretary of the Government of India, K. Sujatha Rao, the government offered land and custom duty exemptions for importing equipment in exchange for extending free care to the poor—a condition that was seldom enforced, even as private hospitals grew by leaps and bounds pan-India. Since then, according to Rao, the private sector has emerged as the dominant player in the health sector, from running hospitals and clinics to bringing in modern technology to manufacturing drugs. It has also established more than half of the 730 medical colleges in the country and treats three-quarters of all those requiring outpatient care and more than half of those in need of inpatient care.
A subtle but substantive transformation that meant exorbitant cost for access to the public health amenities which the state was providing without any devastating effect on the indigent patients. The deprivation of free care facilities for millions with a consequent climb in out-of-pocket expenditure (OOPE) is now the mainstay of financing or making do with health care costs that is an excruciatingly existential burden to the poorest.
To be fair, India’s National Health Account (NHA) estimates reveal a falling trend in OOPE as a proportion of total health expenditure as well as GDP, even as the present dispensation claims credit for itself for the plethora of public schemes it has put in place, including the National Health Mission (NHM), Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), enhanced grants through local bodies for specific components of the health sector in the 15th Finance Commission covering from 2021-22 to 2025-26 and the Free Drugs Service Initiative (FDSI).
Nevertheless, one of the latest sources of OOPE estimates is the Consumer Expenditure Survey (CES)-2022-23, which shows that OOPE as a share of household consumption expenditure (HCE) is on a steady spurt. Between 2011-12 and 2022-23, the share of OOPE in HCE is on a steady rise that is heady for those with insufficient income or income not indexed to inflation, leave aside those legions with little means! This has gone up from 5.5 per percent in rural areas to 5.9 percent and to 7.1 percent from 6.9 per cent in urban areas. An increased share of the household budget accounting for health expenses testifies to the tragic state that health care is becoming dear and is being funded at the cost of even bare necessities of life.
Although it might warm the cockles of the authorities that India got its salutary position in the Sustainable Development Goals (SDG) Index of the United Nations (UN), ranking 99 out of 167 countries in the 2025 edition of the SDG Report, there are daunting challenges in main areas, especially health and nutrition, where headway has been halting, particularly in the vast rural and tribal communities. Illustrative of this deplorable trend is that the Maternal Mortality Ratio (MMR), the number of mothers dying after childbirth per one lakh live births—stands at 97 deaths per one lakh live births, higher than the 2030 target of seventy. Again, the under-five mortality rate remains at 32 deaths per one thousand live births against the target of 25. In contrast, in developed countries, it ranges between two and six deaths. What is worrisome is that out-of-pocket healthcare expenditure continues to burden families at 13 per cent of total consumption, nearly double the targeted 7.83 per cent.
Many factors were at work for these deficiencies that range from lack of access to quality healthcare, partly due to pathetic infrastructure, and non-economic factors such as poor nutrition, hygiene and sanitation and other lifestyle options. Universal health insurance from the poorest to the poor and needy as a bulwark against health problems at any age or stage in life is indispensable so that a healthy population with a will to live well contributes its mite to the development and progress of the nation in whatever minuscule manner it could. Mere sloganeering of inclusive growth or ‘sabka sath sabka vikas’ would not do unless backed by legal entitlements so that at the end of the day people would involve themselves in productive and constructive tasks with ardour and vigour, going forward.
(G Srinivasan is a senior economic journalist based in New Delhi)
