India’s healthcare sector remains underfunded, with current expenditure levels falling below 2% of the nation’s Gross Domestic Product (GDP), as highlighted by former Reserve Bank of India Governor C Rangarajan. Speaking at the ICFAI Foundation for Higher Education (IFHE) event in Hyderabad, Rangarajan emphasized the urgent need for increased healthcare funding, suggesting that governments should consider raising their healthcare budgets to at least 2.8% of GDP. His remarks shed light on the critical issue of inadequate healthcare financing, which has been a topic of ongoing debate in India.
During the event, Rangarajan pointed out that while there is frequent discussion about enhancing healthcare spending, current allocations stand at approximately 1.8% to 1.9% of GDP. He stressed that any increase in budgetary allocations should be accompanied by measures to ensure the efficient utilization of these funds. According to Rangarajan, a significant emphasis should be placed on establishing hospitals capable of delivering free medical services to the public, particularly in underserved areas.
Rangarajan, who also served as the former Chairman of the Prime Minister’s Economic Advisory Council, highlighted the vital role of both health and education in driving national progress. He underscored the imbalance in India’s social expenditure system, where education receives a larger share of resources compared to healthcare. This allocation disparity, according to him, may not align with the nation’s developmental priorities.
The former RBI Governor also touched upon global healthcare practices, particularly those in developed countries, where insurance-linked medical services play a crucial role in providing healthcare access. However, he noted that such models have limited applicability in the Indian context due to differences in socio-economic conditions. Instead, Rangarajan advocated for adopting cross-subsidization principles, which could pave the way for establishing more healthcare institutions catering to diverse socio-economic groups. This approach, he suggested, would allow hospitals to serve both affluent patients and the economically disadvantaged, thereby improving overall healthcare access.
Rangarajan further praised the quality of medical services offered by several Indian hospitals, stating that they are on par with those available in developed nations. He expressed confidence that with the right funding strategies and efficient resource utilization, India’s healthcare system could achieve substantial improvements.
The event also featured the 13th N. Yasaswy Memorial Lecture, delivered by Dr. Gullapalli N. Rao, Founder and Chairman of the LV Prasad Eye Institute, Hyderabad. Dr. Rao’s insights complemented Rangarajan’s remarks by emphasizing the need for innovation and investment in healthcare infrastructure.
As discussions about healthcare spending continue, Rangarajan’s call for increased budgetary allocation and efficient use of resources resonates with ongoing efforts to improve public health outcomes in India. The emphasis on creating hospitals offering free services aligns with the broader goal of achieving universal healthcare coverage, a vision that remains critical for India’s sustainable development.
(Input from various sources)
(Rehash/Ankur Deka/MSM)
