DAW 30th January 2026, Mains Answer Writting 2027

DAW 30th January 2026, Mains Answer Writting 2027

Question

To what extent does India’s health expenditure trajectory undermine the goals of Universal Health Coverage? Suggest fiscally sound reforms to strengthen public health financing. (250 Words, 15 Marks).

Model Answer

Approach: Introduction:

  • Briefly define UHC (SDG-3.8) and link it to NHP-2017 targets and the constitutional mandate (Article 47).

Body:

  • First state whether Central health spending has increased, then assess how the present spending pattern undermines UHC using data on Centre–State imbalance, weakening of primary health systems, high OOPE and missed policy targets, and finally suggest fiscally prudent reforms.

Conclusion:

  • Reiterate that restoring Central leadership and primary healthcare financing is essential to realise UHC and SDG-3.8.

Introduction:

  • Universal Health Coverage (UHC) under SDG-3.8 seeks to ensure that everyone can access quality health services without financial hardship. Reflecting this commitment, India’s National Health Policy (NHP), 2017 set an ambitious target of raising public health expenditure to 2.5% of GDP by 2025, with the Union government contributing nearly 40%. Yet, recent fiscal trends reveal a clear gap between policy intent and budgetary action, weakening the constitutional responsibility of the State to improve public health under Article 47.

Body: Has health spending by the Centre increased?

  • After a brief COVID-related rise, Union health expenditure declined from 0.37% of GDP in 2020-21 to 0.29% in 2025-26 (BE).

  • In real terms, the 2025-26 allocation is 4.7% lower than actual spending in 2020-21.

  • The share of health in the Union Budget also fell from 2.26% to 2.05%, pointing to a clear post-pandemic de-prioritisation.

  • At the same time, States raised health spending from 0.67% of GDP (2017-18) to 1.1% (2025-26 BE), creating a serious vertical fiscal imbalance, as service delivery rests largely with States while revenue powers remain concentrated with the Union.

To what extent does the present trajectory undermine UHC?:

  • Retreat of the Centre and rising burden on States:

  • The shrinking Central role violates the NHP expectation that the Union would fund about 40% of public health spending.

  • Fiscally weaker States are compelled to stretch limited resources, widening inter-State disparities in health outcomes.

  • Erosion of frontline public health systems:

  • The share of Union health spending routed through Centrally Sponsored Schemes (CSS) declined sharply from 75.9% (2014-15) to about 43% (2024-25 BE).

  • Funding for the National Health Mission (NHM)- the backbone of primary healthcare- fell by 5.5% annually in real terms during the second NDA tenure.

  • This weakens maternal and child health services, immunisation, and community outreach.

  • Persistent infrastructure and workforce deficits:

  • Rural Health Statistics (2023) show 23% shortfall in Sub-centres, 28% in PHCs and 37% in CHCs.

  • The doctor–population ratio remains at 1:1500, well below the WHO norm of 1:1000.

  • These gaps directly restrict access and undermine quality of care.

  • Failure to ensure financial protection:

  • Public health expenditure remains only about 2.1% of GDP.

  • Over 40% of health spending is out-of-pocket.

  • Around 60 million people fall into poverty each year due to medical expenses, and nearly 23% of hospital bills are financed through borrowing.

  • This strikes at the very heart of UHC.

  • Weak leverage of the Health and Education Cess:

  • In FY 2023-24, cess collections were ₹71,180 crore, but only about ₹17,795 crore (25%) was used for health.

  • Excluding cess, Union health spending declined by 22.5% in real terms between 2020-21 and 2023-24, reducing its credibility as a dedicated health financing tool.

  • Insurance expansion without public system strengthening:

  • UHC efforts are increasingly centred on Ayushman Bharat–PM-JAY, while public provisioning remains fragile.

  • The pandemic exposed exclusion of migrants and informal workers, and the vulnerability of hospital-centric approaches—departing from the Bhore Committee and Alma-Ata vision of strong primary healthcare.

  • Missed national targets:

  • Against the NHP goal of 2.5% of GDP, public health spending is still around 2.1%.

  • The Union’s contribution stands at only 0.29% of GDP.

  • To meet its intended 40% share, Central spending would need to rise to nearly 1% of GDP.

Taken together, the current trajectory weakens access, compromises quality and leaves households exposed to medical costs- thereby significantly undermining UHC. Fiscally sound reforms to strengthen public health financing:

  • Ring-fence the Health and Education Cess:

  • Create a non-lapsable health fund and mandate minimum health utilisation.

  • Channel funds primarily to NHM, Health and Wellness Centres and health workforce expansion.

  • Rebalance Union–State transfers:

  • Restore the CSS share to around 60–70% of Union health spending.

  • Prioritise NHM, urban primary care and disease surveillance—especially for fiscally weaker States such as Bihar and Uttar Pradesh.

  • Reorient spending towards primary and preventive care:

  • Expand allocations for Health and Wellness Centres, nutrition, adolescent health and disease prevention.

  • Such investments yield higher long-term fiscal and health returns than hospital-centric expansion.

  • Introduce outcome-linked health grants:

  • Finance Commission transfers linked to PHC functionality, workforce vacancies and maternal-child health indicators to improve efficiency.

  • Align PM-JAY with public system strengthening:

  • Preferential reimbursement for public hospitals and capital grants for district hospitals linked to caseloads, preventing crowding-out of public services.

  • Adopt a medium-term health financing framework:

  • A rolling 3–5 year expenditure plan aligned with SDG-3.8 and NHP-2017 to ensure stability and predictability.

  • Expand fiscal space through health-positive taxation:

  • Calibrated taxes on tobacco, alcohol and ultra-processed foods, earmarked for prevention and non-communicable disease control.

Conclusion:

  • India’s post-pandemic health financing reflects a clear withdrawal of the Union government and growing dependence on fiscally constrained States. This weakens public health systems, raises household vulnerability to medical shocks and dilutes the promise of Universal Health Coverage (UHC). Restoring credible Central leadership- through predictable financing for primary care, revitalisation of the National Health Mission (NHM), genuine ring-fencing of cess resources and a fair rebalancing of Union–State transfers- is essential if India is to realistically meet SDG-3.8 and honour the intent of the National Health Policy, 2017.