The union government decided to boost public spending in the health sector to 2.5 per cent of GDP from the current 1.4 per cent over five years (12th Five Year Plan period begining 2012).
The Prime Minister’s Office (PMO) directed the Planning Commission to allocate funds during the 12th Five-Year Plan. The decision to increase the funds in this sector was in tune with the recommendations of the Srinath Reddy-led committee on universal healthcare coverage set up by the plan panel.
India’s public spending on health as a proportion of GDP is among the lowest in the world. Sri Lanka spends 1.8 per cent of GDP, China and Thailand spend 2.3 per cent and 3.3 per cent respectively. The health care spending figure for the US is in excess of 7 per cent. The European countries like the UK, Spain, Germany, Italy spend 6.5-8 per cent of their GDP on healthcare.
The public spending on health in India may not appear to be so low when compared with other emerging economies. Economists however stated that the differences in spending in the health sector become magnified when a more revealing indicator such as per capita government spending on health is considered. India spends $43 per head while counterparts in Sri Lanka invest $87. China spends $155 and Thailand over six times at $261.
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