The recent report from the Fifteenth Finance Commission (FFC) puts emphasis on reorganizing public expenditure to strengthen the frail health infrastructure, which the current pandemic has laid bare. The FFC has submitted the report to the President which advises how to divide tax revenues with states for the 2022-26 period. The report covers a wide range of aspects, including performance incentives to states in areas of reform.
Key Recommendations of FFC
The FFC suggests promoting public-private partnerships (PPPs) to improve health infrastructure and increasing public health spending from the current 0.95% of GDP to 2.5% by 2024. The focus of public spending should be on primary healthcare at panchayat and municipality levels. However, specialty healthcare should rely heavily on private sector involvement.
The commission emphasized the need for a more holistic approach to encourage PPP within the health sector, stating that the government should work consistently with the private sector and not just during emergencies. Furthermore, it highlighted the necessity of bridging the trust deficit between industry and the government.
FFC also underscored the potential of district hospitals as training grounds for paramedics, thereby creating health and employment multipliers. They further urged the creation of a cadre for medical officers as mentioned in the All India Services Act 1951.
Issues Plaguing the Health Sector
India’s general government expenditure on healthcare stood at a meager 1.0% of GDP in 2017 as per the World Health Organization (WHO), ranking 165 out of 186 globally. The major issues identified include skewed availability of healthcare across India, especially in poorer states, job insecurity, and low salary for trained epidemiologists.
Moreover, the country’s expenditure on R&D as a percentage of GDP has remained at a stagnant 0.7% for three decades, with the public sector accounting for 51.8% of national R&D expenditure. This is in stark contrast to countries like the USA, China, Korea, and Germany where R&D spending is higher and primarily led by the private sector.
Recent Initiatives
Several recent government initiatives have aimed at addressing these issues. Financial aid through viability gap funding has been extended for PPPs in infrastructure projects in social sectors such as health, education, water, and waste treatment. Collaborations of public research laboratories, public institutions, and private players are in progress.
Institutes like the Defence Research and Development Organisation (DRDO) have developed crucial equipment like ventilators and collaborated with the industry to ramp up their production. Additionally, significant efforts have been made towards Covid-19 testing kits, masks, sanitizers, personal protective equipment (PPEs), and ventilators manufacturing to overcome global supply chain disruptions.
The government has also taken initiatives like National Medical Commission, National Digital Health Mission, Ayushman Bharat among others. Under the Global Health Security Agenda (GHSA), which provides guidance for countries to manage severe health threats, 17 projects have been launched in India with various government and private organizations. The NIHFW is one of the many institutes responsible for workforce development within GHSA, implementing the “Public Health Systems Capacity Building in India” project.
Last Modified: February 9, 2024