Government needs to increase healthcare expenditure in India: Former RBI governor
Former Reserve Bank of India (RBI) governor C Rangarajan has said that India's healthcare expenditure is currently less than 2 per cent of its Gross Domestic Product (GDP) and the governments must urgently increase it. He stressed on the importance of ensuring efficient fund utilisation before increasing healthcare spending.
Rangarajan said ‘in India, there is a consistent discussion on raising healthcare expenditure to at least 2.8 per cent of the GDP. However, current data indicates that we are spending only about 1.8 or 1.9 per cent of the GDP’. He said the governments should increase healthcare spending, focus on establishing hospitals that offer free services, and ensure these funds are utilised efficiently. He also stated that education and health are crucial for accelerating the country's progress. However, in India's social expenditure system, more resources are allocated to education than to health, which may not be the ideal approach.
Talking on international practices, he noted that insurance-linked medical services, common in developed nations, have limited relevance in India. Instead, he advocated for cross-subsidisation principles to establish more institutions that can serve both the poor and the affluent. He added that medical services in many Indian hospitals are comparable to those in developed countries.
