National Health Accounts 2004-05

The healthcare system in India was dominated by the private sector, whose expenses amounted to 78.05 per cent of the total health expenditure in 2004-05. The public sector contributed 19.67 per cent while 2.28 per cent was spent on health programmes and schemes. The total health expenditure of Rs. 1,337,763 formed 4.25 per cent of GDP.

The provisional estimates for health expenditure from 2005-06 to 2008-09 showed that it increased in 2008-09, but its share of GDP fell to 4.13 per cent. Public health expenditure, which was 0.96 per cent of GDP in 2005-06, increased to 1.10 per cent in 2008-09.

Public health expenditure (by the Centre, states and local bodies) covered medical and public health, family welfare, secretariat social service and other expenditure, including medical reimbursement of employees of the central and state government. Private health expenses included out-of-pocket expenditure, health insurance and expenditure towards health by firms and non-governmental organisation.

While health expenditure as a percentage of GDP and public spending as a percentage of total health expenditure was low in India, the former was higher in India than in South Asian and South-East Asian countries like China, Malaysia, Sri Lanka, Thailand, Pakistan and Bangladesh.

The total public health expenditure by the central and state governments was Rs. 284,540 million in 2004-05, of which the states’ share was Rs. 209,230 million or 73.53 per cent.

Households contributed 71.13 per cent (Rs. 951,538 million) to the total health expenditure, state governments put in 12 per cent (Rs. 160,171 million), the central government gave 6.78 per cent (Rs. 90,667 million), and firms contributed 5.73 per cent (Rs. 76,643 million).

The per capita health expenditure in 2004–05 was Rs. 1,201, of which the share of public health service providers was Rs. 242 (20.18 per cent) and that of private health service providers was Rs. 959 (79.82 per cent).

Public health expenditure was less than 1 per cent of the Gross State Domestic Product (GSDP) in all major states except Bihar (where it was 1.12 per cent). It was 3-4 per cent of the total state expenditure in all major states except Maharashtra (where it was 2.88 per cent).

77.96 per cent of the country’s total health expenditure was incurred on curative care, 8.07 per cent on family welfare and reproductive and child health, and 1.8 per cent on medical education and research.

Out-of-pocket expenditure by households constituted more than two-thirds of the total health expenditure. Of this, 62 per cent (Rs. 578,998 million) was spent by rural households and 38 per cent by urban households. In both rural and urban areas, households spent the most on  outpatient care, especially medicines and doctors’ fees.

Factoids and Focus by Keiu Kikas.

PARI Library's health archive project is part of an initiative supported by the Azim Premji University to develop a free-access repository of health-related reports relevant to rural India.