States' health spending rises 15% since FY20, while centre's share halves to 7%

Health spending of states picks up, as. centre's growth tapers

The centre's health spending growth has halved in the post-pandemic period compared with its first term in office, despite the government’s focus on flagship programmes like Pradhan Mantri Ayushman Bharat Yojana, according to a Moneycontrol analysis.

While the government’s outlay on health doubled from Rs 30,000 crore to over Rs 62,000 crore between 2014-15 and 2019-20, growing 15 percent per annum, the growth rate slowed to 7 percent between 2019-20 and 2024-25.

In FY25, the government will spend around Rs 90,000 crore on health.

Health spending has remained unchanged over the last decade, with the central government spending a mere 0.3 percent of the GDP on health. While it rose to 0.41 percent of the GDP during the pandemic, it has since declined to 0.28 percent.

However, while the central government’s spending has slowed, state spending has grown faster during this period.

Between 2019-20 and 2024-25, state spending on public health and medical services expanded 15.1 percent, compared with the 13.1 percent growth witnessed in the previous six years.

Among the large states, which account for 90 percent of the country’s economy, spending increased faster for Andhra Pradesh and Odisha.

In 2024-25, Odisha is expected to spend Rs 20,207 crore on health, over three times the Rs 5,779 crore it spent in 2019-20.

Odisha, earlier this week, became the 34th state to join the government's Ayushman Bharat scheme.

Among the states/UTs that have not joined the government’s flagship scheme, Delhi has witnessed a slowdown in budget spending on health, while West Bengal has seen a jump.

Eastern states grow the fastest

Among the regions, eastern states spending on health expanded faster than all other regions at a compounded annual growth rate of 16.8 percent compared with 15 percent in the previous six years.

Western states also recorded a faster rise in spending, with the health budget growing 15.5 percent per annum between 2019-20 and 2024-25, compared with 10.3 percent during the first term.