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Coronavirus pandemic | India’s poor healthcare spending is hurting the fight

India has not paid enough attention to health services and Maharashtra, which has the highest COVID-19 cases, is the worst offender

April 09, 2020 / 10:26 AM IST
Representative image

Representative image

The adage that the sins of the past are heaped on the present is coming true. India is battling a coronavirus epidemic. It tried to stop its spread by announcing a nationwide 21-day lockdown as infections began to rise but without a supporting health infrastructure, the casualty rate is likely to go up.

India spent barely 1.29% of its gross domestic product (GDP) on healthcare in the financial year 2020, an April 7 report from CARE Ratings says. The spending on capital expenditure was worse, at only 0.19%.

chart 1

That perhaps explains why India did not do enough testing right from the start. The best managers of the coronavirus epidemic are acknowledged to be Germany, Japan, Singapore and South Korea, not necessarily in that order. What they did was to first test, followed it up by contact tracing and subsequently, isolation.

Lockdowns were the last option. India went for a lockdown probably because it was the cheapest – but not the most recommended-- option.


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Show me the money

India announced the world’s largest healthcare scheme Ayushman Bharat but failed to back up such an ambitious and socially relevant scheme with enough money.  

As the novel coronavirus rampages across the country, it is clear that Maharashtra is the worst hit. That should not come as a surprise. Among the large states in India, Maharashtra spends the least. It spent barely 0.5% of its gross state domestic product on healthcare. Even if one considers the share of healthcare expenditure as a percentage of revenue, Maharashtra fares poorly. Of course, there is one large state, Telangana, which has a lower number. 

chart 2

Some states, however, have been spending a good deal of money on health services.  The Northeastern states are way ahead of their bigger counterparts.  Arunachal Pradesh spends the most on health services-- 5.8%. It is followed by Meghalaya and Mizoram.  Among medium states, Assam and Chhattisgarh lead the way.

Among the big ones, Uttar Pradesh and Rajasthan’s spending is double than that of Maharashtra in terms of percentage of the GSDP. Each of these have spent more than 1.29% of GDP the Centre has spent (though technically speaking states spend a percentage of GSDP).

Screen Shot 2020-04-09 at 10.14.13

Maharashtra’s case is more peculiar because it has spent more money on giving away flats to slum dwellers who were encouraged to squat on public land.

The state overshot cut-off dates against mandates of courts, by passing ordinances and laws to allow more slums to emerge. Today, Maharashtra is considered the slum state of India with the largest clusters in the country. In other words, it has spent more money and legislative time on slums than on healthcare. 

And now it wants to waive in perpetuity all property taxes to be paid by “rehabilitated” slum-dwellers. As pointed out earlier, the reasons are obvious. Slum-dwellers are voters, they help in siphoning off money meant for entitlements and they also allow for real estate adventurism. 

Follow LIVE updates on the coronavirus pandemic here

The sad part is that the state government did not ramp up its health services even as the density of people living in the slums went up. So now you have more people, more slums, less money and a rampaging virus. It is not surprising then that Maharashtra has been badly hit.

What is more worrying is that with climate change new epidemics are likely to surface. Maharashtra and India will be sitting ducks if health services (and education) are not ramped up on priority.

India cannot blame other countries, communities or people. It is the policymakers who should share the blame--for allowing cities to get congested, for not putting into place measures to fight the spread of disease and for not allocating enough money o health services and education. 

This neglect explains why India is ranked among the worst in the world on the World Bank’s Health Capital Index (HCI). Its scores lower than Bangladesh, Sri Lanka and Nepal. The only country in the neighbourhood that ranks lower is Pakistan. 

If India wants to find its place in the sun, it better ramp up its healthcare and education expenditure.
Moneycontrol News
first published: Apr 9, 2020 10:26 am

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