The Government of India recently published its Union Budget for the 2016-2017 financial year, in which health allocations show a modest increase following a period of stagnation since 2010. 

However, detailed analysis of the budget suggests that the public health sector, which is responsible for providing essential services and reaching the poorest populations, has little to benefit from this rise in central-level spending. In fact, public services are likely to face more constraints and additional demands on their limited resources.  

This is because the government has not prioritised initiatives that stimulate public health sector growth. Further, it hasn't always matched new initiatives with additional funding, but rather has re-routed funding and resources from the public sector.

For example, one new announcement in the Budget is that existing funds for the National Dialysis Services Programme are to be spent through private partnerships. As a result, there will be less money for other nephrology (kidney-related) services that are essential for the effective management of kidney-related conditions. This is likely to compromise the availability and quality of such services. 

It is imperative that alongside new initiatives, additional funding is allocated towards ensuring an adequate, skilled workforce, including mid-level managers, so that they can implement changes effectively. 

The government’s rationale for routing public investments through the private sector is based on an assumption that the private sector uses resources more efficiently. However, there is little evidence to support this, and the private sector cannot substitute for the vital roles carried out by the public sector, such as disease surveillance.

One of the lessons that nations should learn from the Ebola crisis is that when nations do not invest in public health systems, they lay themselves open to epidemics that could threaten the health security and economy of a nation.

Chronic and sustained under-financing of the public health system in India has how reached critical levels, and there is a serious, immediate, threat to health and economic security – not only for the poor, but also for the whole population. 

This blog is based on an article written by T Sundararaman, I Mukhopadhyay, and V Muraleedharan, that was originally published in Economic and Political Weekly. The full article can be read here.

V Muraleedharan, is a member of RESYST Consortium. His team at IITM are conducting research on healthcare purchasing, and on nurses’ career choices in Tamil Nadu, India.