Healing the System — Why India’s Public Health Gaps Are a Governance Crisis
🗞️ Why in News A Business Standard editorial highlighted that India’s public health spending remains stuck at ~1.8% of GDP — well below the National Health Policy 2017 target of 2.5%. A CAG performance audit of Delhi’s health infrastructure (covering 2016-17 to 2021-22) exposed a 21% staff shortage, unspent NHM funds worth Rs 510 crore, and overcrowded hospitals. The Union Budget 2026-27 crossed Rs 1 lakh crore for health for the first time, yet governance failures — not just funding gaps — remain the core challenge.
The Delhi Trigger — High Spending, Poor Outcomes
The Delhi government allocated Rs 12,893 crore for health in its 2025-26 budget — roughly 12-15% of total budget. Most states allocate only 5-6%.
Yet even this well-funded system fails. The CAG audit laid bare the gap between allocations and outcomes. If Delhi cannot deliver with high budgets, the problem is clearly governance and execution — not money.
CAG Audit Findings — Delhi Health
| Parameter | Finding |
|---|---|
| Overall staff shortage | 21% across Health and Family Welfare Department |
| Teaching specialists | 30% vacant |
| Non-teaching specialists | 28% vacant |
| Paramedical staff | 38% vacant |
| Drugs Control Department | 52% shortage — insufficient drug unit and blood bank inspections |
| NHM fund utilization | Only 46.46% utilized (by December 2025) |
| Unspent NHM funds | Over Rs 510 crore remained unspent |
The Public Accounts Committee (PAC) directed that deficiencies be addressed by June 30, 2026.
The National Picture — Health Spending
| Metric | Data |
|---|---|
| NHP 2017 target | 2.5% of GDP by 2025 |
| Actual public spending (FY 2022-23) | ~1.9% of GDP (Centre + States) |
| Government share of total health expenditure | 48% (FY 2021-22), up from 29% (FY 2014-15) |
| Total health expenditure (FY 2021-22) | Rs 9,04,461 crore (3.8% of GDP) |
| Per capita health spending | Rs 6,602 (~$80) |
| Union Budget 2026-27 — Health Ministry | Rs 1,06,530 crore (~10% increase) |
| NHM allocation (2026-27) | Rs 39,390 crore (6.17% increase) |
| PMJAY allocation (2026-27) | Rs 9,500 crore |
The NHP 2017 target of 2.5% of GDP by 2025 has been decisively missed. Total health expenditure rose from Rs 3.2 lakh crore (FY 2020-21) to Rs 6.1 lakh crore (FY 2024-25) at 18% CAGR — but public spending as a share of GDP has barely moved.
Staff Shortages — A National Crisis
The human resource crisis extends far beyond Delhi.
- PHCs: 30% shortage against Indian Public Health Standards (IPHS) norms
- CHC specialists: 57% shortfall at Community Health Centres (Rural Health Statistics 2021)
- Doctor-population ratio: 1.34 per 1,000 (WHO benchmark: 1.5 per 1,000). But 80% of doctors practise in urban areas serving only 35% of the population
- Hospital beds: Only 0.79 government beds per 1,000 (NHP target: 2; WHO benchmark: 3.5)
- PHC compliance: Only 13% of PHCs (3,278 of 24,918) meet basic IPHS standards
- Rural PHC vacancies: ~24% for medical officers
The Governance Gap — States That Need Most, Spend Least
The NITI Aayog State Health Index (5th edition, 2020-21) reveals stark disparities:
| Category | States |
|---|---|
| Top performers (larger states) | Kerala, Tamil Nadu, Telangana |
| Bottom performers | Uttar Pradesh, Bihar, Madhya Pradesh |
Governance quality determines health outcomes more than per-capita spending. Poorer states with the worst health indicators often have the lowest fund utilization rates — creating a vicious cycle where the most need meets the least execution.
The Fund Utilization Paradox
Money is allocated but not spent. This is an administrative failure, not a resource problem.
- NHM funds: Several states consistently fail to utilize allocations. Delhi utilized only 46.46% by December 2025
- PM-ABHIM: Allocated Rs 4,770 crore (2026-27), but earlier phases saw significant delays in operationalizing District Public Health Laboratories
- Primary care neglect: NHP 2017 recommended two-thirds of public health resources for primary care. In practice, tertiary hospitals absorb a disproportionate share while PHCs remain understaffed
Ayushman Bharat — Progress
AB PM-JAY, launched September 2018, is the world’s largest publicly funded health assurance scheme — Rs 5 lakh per family per year for 55 crore beneficiaries across 12.34 crore families.
- ~17 crore families (68%) now covered under PMJAY and other government schemes
- Senior citizen expansion (2024): All citizens aged 70+ covered irrespective of income — ~6 crore seniors, ~4.5 crore families
- 1,81,873 Ayushman Arogya Mandirs (AAMs) operational (November 2025) with 12 expanded services
- Screenings: 39.50 crore (hypertension), 36.70 crore (diabetes), 32.40 crore (oral cancer)
Ayushman Bharat — Persistent Gaps
The “Missing Middle”: PMJAY covers the poorest 40%. The non-poor non-rich segment (~30% of population) lacks adequate financial protection.
OPD exclusion: PMJAY covers only hospitalisation — not outpatient consultations, which account for the bulk of household health spending.
Out-of-pocket spending: Declined from 64.2% (FY 2013-14) to 39.4% (FY 2021-22) — but still among the highest globally. About 49% of hospitalised households face catastrophic health expenditure. 3-7% of households fall below the poverty line annually due to medical costs.
India vs the World
| Country | Public Health Spending (% GDP) | Per Capita ($, 2022) | Hospital Beds per 1,000 | Doctors per 1,000 |
|---|---|---|---|---|
| India | ~1.8-1.9% | ~$80 | 0.79 (govt) | 1.34 |
| China | ~3.0% | ~$500 | 4.3 | 2.4 |
| Brazil | ~4.0% | ~$850 | 2.1 | 2.3 |
| Thailand | ~4.5% | ~$370 | 2.1 | 0.9 |
| Sri Lanka | ~1.6% | ~$157 | 3.6 | 1.2 |
| UK | ~10.4% | ~$5,100 | 2.4 | 3.2 |
| Global Average | ~6.5% | ~$1,325 | 2.7 | 1.7 |
India spends less per capita than Sri Lanka despite a much larger GDP. Thailand, with similar per capita income, achieved near-universal coverage by spending 4.5% of GDP publicly — more than double India’s level.
Way Forward
- Revise the GDP target — NHP 2017 deadline of 2025 is missed. Set a new target of 3% of GDP by 2030 with annual state-level milestones
- Fix utilization before increasing allocations — States with low absorption need dedicated health administration cadres, simplified procurement, and outcome-linked releases
- Prioritize primary healthcare — At least two-thirds of health spending should flow to PHCs, sub-centres, and AAMs — not tertiary hospitals
- Fill the specialist gap — Fast-track CHC specialist recruitment (57% shortfall), mandate rural service bonds for medical graduates, create a public health cadre
- Close the Missing Middle — Extend publicly funded coverage to the ~30% neither poor enough for PMJAY nor rich enough for private insurance
- Governance reforms — Independent state-level health regulators, mandatory district-level health audits, real-time public dashboards for fund utilization and vacancy tracking
UPSC Relevance
Prelims: NHP 2017 targets, PMJAY coverage and eligibility, Ayushman Arogya Mandirs, NITI Aayog Health Index, WHO doctor-patient ratio benchmark, IPHS norms. Mains GS-2: Government health policy and governance failures; federal health architecture; NHM fund utilization; role of CAG in social sector accountability; Ayushman Bharat — design vs implementation gaps.
📌 Facts Corner — Knowledgepedia
National Health Policy 2017 — Key Targets:
- Public health expenditure target: 2.5% of GDP by 2025 (missed — actual ~1.8-1.9%)
- Two-thirds of health resources to primary care (not achieved)
- Reduce IMR to 28 per 1,000 live births, MMR to 100 per 1 lakh live births
- Adopted by Cabinet: March 15, 2017
- Replaced: NHP 2002
Union Budget 2026-27 — Health Allocations:
- Ministry of Health and Family Welfare: Rs 1,06,530.42 crore (~10% increase over FY 2025-26 RE)
- National Health Mission: Rs 39,390 crore
- PM-JAY (Ayushman Bharat insurance): Rs 9,500 crore
- PM Ayushman Bharat Health Infrastructure Mission: Rs 4,770 crore
- Department of Health Research: Rs 4,821.21 crore
- First time health budget crossed Rs 1 lakh crore
CAG Audit of Delhi Health (2016-17 to 2021-22):
- Overall staff shortage: 21%
- Teaching specialists: 30% vacant; Non-teaching specialists: 28% vacant
- Paramedical staff: 38% vacant
- Drugs Control Department: 52% staff shortage
- NHM fund utilization (by Dec 2025): only 46.46%
- Unspent NHM funds: over Rs 510 crore
- PAC review deadline: June 30, 2026
Ayushman Bharat PM-JAY:
- Launched: September 23, 2018 (Ranchi, Jharkhand)
- Coverage: Rs 5 lakh per family per year for hospitalization
- Beneficiaries: 55 crore individuals across 12.34 crore families
- Senior citizen expansion (2024): All citizens aged 70+ covered irrespective of income (~6 crore seniors, ~4.5 crore families)
- Does NOT cover: OPD, cosmetic surgery, fertility treatment, organ transplants, drug rehabilitation
Ayushman Arogya Mandirs (AAMs):
- Operational (as of November 2025): 1,81,873
- Services: 12 expanded packages including teleconsultation
- Screenings: 39.50 crore (hypertension), 36.70 crore (diabetes), 32.40 crore (oral cancer)
- Wellness sessions conducted: 5.73 crore (as of June 2025)
India Health Infrastructure — National Data:
- Government hospital beds: 0.79 per 1,000 population (NHP target: 2; WHO benchmark: 3.5)
- India short of ~2.4 million hospital beds
- PHC compliance with IPHS: only 13% (3,278 of 24,918)
- CHC specialist shortfall: 57%
- Rural PHC medical officer vacancies: ~24%
- Doctor-population ratio: 1.34 per 1,000 (WHO benchmark: 1.5 per 1,000)
Out-of-Pocket Health Expenditure:
- OOP as share of total health expenditure: declined from 64.2% (FY 2013-14) to 39.4% (FY 2021-22)
- Government share of total health expenditure: rose from 29% (FY 2014-15) to 48% (FY 2021-22)
- Households experiencing catastrophic health expenditure: ~49%
- Households pushed below poverty line by health costs: 3-7% annually
NITI Aayog State Health Index (5th Edition, 2020-21):
- Top performers (larger states): Kerala, Tamil Nadu, Telangana
- Bottom performers: Uttar Pradesh, Bihar, Madhya Pradesh
- Based on 24 weighted indicators across health outcomes, governance, and inputs
Other Relevant Facts:
- India’s total health expenditure (FY 2024-25): Rs 6.1 lakh crore (18% CAGR from FY 2020-21)
- Per capita health spending: ~$80 (2022) vs global average of ~$1,325
- Thailand spends ~4.5% of GDP publicly on health and achieved near-universal coverage
- Sri Lanka spends ~$157 per capita on health — nearly double India’s level
- National Health Accounts (latest): 2021-22 edition released by Union Health Ministry
- Health budget increase since 2014-15: cumulative 194%
- “Missing Middle” — ~30% of population neither covered by PMJAY nor able to afford private insurance
Sources: Business Standard, PIB, PRS India, CAG India, Down to Earth, NITI Aayog