Strong health systems for all with better public spending

The article highlights a critical governance challenge: budget execution in the health sector. While funds are allocated, a significant portion remains unspent. The author notes that health budgets in LMICs often have execution rates of 85-90%, lower than general budgets. In India, the article cites a parliamentary panel finding that only two-thirds of the allocation for the PM Ayushman Bharat Health Infrastructure Mission was spent in 2024-25, and a mere 26% of funds earmarked for disease programs under the National Health Mission were utilized. This persistent underspending indicates a deprioritization of health during implementation and points to inefficiencies in Public Financial Management (PFM). From a UPSC perspective, this underscores that merely increasing budgetary allocations (Out-of-Pocket Expenditure reduction is a key goal) is insufficient; structural bottlenecks in fund disbursement, procurement delays, and a lack of capacity at the local level (especially given the decentralization of health services to Panchayati Raj Institutions) must be addressed to ensure funds translate into actual healthcare delivery.

The piece raises crucial points regarding the strategic allocation of public funds, an important concept in public finance. A significant economic principle is that public money is best spent on 'public goods' where there is a market failure—situations where the private sector will not provide sufficient services because they cannot capture the full economic benefit. The article argues that public health spending should prioritize preventive care, sanitation, and infectious disease control (classic public goods) rather than expanding basic curative services that the private sector already provides. The author notes India spends less than a quarter of its public health budget on preventive care. Furthermore, the global economic context is worsening health financing; rising public debt in developing countries (leading to massive interest payments) and significant cuts to Development Assistance for Health (DAH) by major economies like the US and UK are shrinking the fiscal space available for health. This necessitates a shift from seeking 'more money for health' to ensuring 'more health for the money' through improved allocative efficiency.

The overarching social concern is achieving Universal Health Coverage (UHC), a key target under Sustainable Development Goal 3. The article emphasizes that purely increasing spending without addressing underlying governance issues, such as corruption and bureaucratic inefficiency, will not lead to improved health outcomes like reduced child mortality. The social impact of misaligned spending is significant; prioritizing tertiary curative care often benefits urban, wealthier populations, while underfunding primary and preventive care disproportionately affects the rural poor. The demographic shift towards an aging population also requires a proactive approach to managing Non-Communicable Diseases (NCDs) through early detection and risk factor management, rather than relying solely on expensive late-stage treatments. For UPSC aspirants, understanding the link between efficient public spending, strong governance, and equitable health outcomes is vital for addressing the structural inequalities in India's healthcare system.