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Public Health Expenditure and the Growing Burden of NCDs in India

The allocation to healthcare in the 2023-2024 Budget was estimated to be Rs 89,155 crore or 1.98% of the country’s GDP. The expenditure has seen a 13% increase from the previous fiscal year. In 2019, the average health spending for lower and middle-income countries was 4.9% of their GDP, while high-income countries spent an average of 8.2% on public health. India’s public health expenditure fares poorly compared to other countries, with one of the lowest public health spending. Moreover, considering the rate of inflation (recorded at 5.5% in December 2022), there has been a decline in the actual terms of public health spending. This contrasts with the National Health Policy of 2017, which envisaged raising overall government expenditure on public health to 2.5% of the GDP by 2025.
Further, the Tertiary Care Programme of the Centre saw a massive budget cut from Rs 500 crore to 289 crore under the 2023-24 Union Budget. The Programme covers all major non-communicable diseases (NCDs), such as cancer, diabetes, and cardiovascular diseases. Currently, the government spends less than 0.5% of the GDP on NCDs. This inadequate budget outlay is alarming since the burden of NCDs on India continues to rise and has increasingly become a public health concern.
Growing Epidemic of Non-Communicable Diseases in India
In the last two decades, India has witnessed significant shifts in the disease pattern with the rising burden of NCDs. NCDs are chronic diseases which are not transmitted from person to person, such as diabetes, hypertension, etc. As per WHO data, more than 36 million people die globally due to NCDs. In India, the estimated proportion of deaths due to NCDs has increased from 37.9% in 1990 to 61.8% in 2016. Apart from mortality rates, NCDs are measured in terms of DALYs (Disability-adjusted life years) which capture the years of productive life lost due to premature mortality and years with a disability. As per a study by the Indian Council of Medical Research(ICMR), the proportion of total DALY attributable to NCDs has increased from 30.5% to 55.4% between 1990 to 2016 in India.
The four major NCDs include cardiovascular diseases (CVDs), cancers, chronic respiratory diseases (CRDs), and diabetes. These diseases share behavioural and biological risk factors such as unhealthy diet, lack of physical activity, and use of tobacco and alcohol. The increase in NCDs can also be attributed to demographic changes, rapid urbanisation, and poor public health infrastructure. Cardiovascular diseases (CVDs) are the leading cause of death in India, accounting for more than a quarter of all deaths. India is also known as the ‘Diabetes Capital of the World’. Currently, 80 million people in India have diabetes, which is projected to increase to 135 million by 2045. The prevalence of cancer is also on the rise in India, with lung, breast, and oral cancers being the most common.
Economic Impact of NCDs on Development and Household Income
NCDs, which could lead to long-standing disabilities and premature death, are a major threat to economic and human development. They have chronic effects that reduce labour productivity and economic output due to increased rates of absenteeism, decreased energy and focus of workers, and depletion of critical workplace skills. At the macro level, it is estimated that India could potentially lose $4.58 trillion before 2030 or 5-10% of GDP due to NCDs, significantly slowing down the economy and overall development. At the micro level, households with ailing members with NCDs face high financial burdens and instability.
In India, the low health insurance coverage and a dearth of public health expenditure translate into heavy reliance of households on out-of-pocket expenditure (OPE) for medical treatment. Several studies have shown that households where at least one member has one or more NCDs face greater healthcare expenditure than those diagnosed with any other disease. The National Health Accounts (NHA) estimated that the Government Health Expenditure (GHE) in 2018-19 was only Rs. 1,815 per person per year or Rs 5 per day. This contrasts with the OPE, which was Rs. 2,155 per capita in 2018- 19 and represented 48.21% of the overall health expenditure.
Moreover, caring for NCDs makes households susceptible to catastrophic health expenditure (CHE), which occurs when healthcare costs amount to or exceed 40% of a household’s non-subsistence income. NCDs drastically limit a household’s income and ability to spend on necessities like food, clothing, and education. This degree of health spending forces households to go through various financial shocks, such as borrowing money or selling valuable assets, ultimately leading to impoverishment and an intergenerational cycle of poverty. A study in India revealed that about 25 % of families with a member with CVD and 50% of families with cancer patients experience catastrophic spending. Of that number, 10 % and 25% respectively are driven to poverty. The odds of incurring CHE were nearly 160% higher with hospitalisation due to cancer and 30% higher for CVD than any other communicable disease.
The hospitalisation rate due to NCDs has risen from 29% in 2004 to 38% in 2014 and is mostly covered by OPE.  The high burden of OPE on NCDs-affected households is also due to heavy dependence on private healthcare providers to treat NCDs. A 2021 study indicated that OPE was 3 to 5 times higher among patients who sought treatment for NCDs in private hospitals than in public hospitals. Lengthy hospital stays, longer specialised and intensive care, and lack of health infrastructure exponentially increase expenditure on NCDs. For instance, the Standing Committee on Health (2022-23) noted that patients resort to cancer treatment in private hospitals despite their high cost since only 50 public tertiary hospitals offer cancer treatment, compared to 200 private ones. This places a heavy financial burden on poor and vulnerable groups. Data from the 75th National Sample Survey (NSS) showed a sizable difference in out-of-pocket treatment costs between the private and public sectors. In 2017-18, the average medical cost of hospitalisation was Rs 4,452 in government hospitals and Rs 31,845 in private hospitals.
​​The growing epidemic of NCDs has severely impacted national health systems and socio-economic developments, increasing country-level disparities and inequities. As emphasised in WHO’s Global Action Plan for Prevention and Control of NCDs 2013-2022, there is an urgent need to increase public health expenditure and direct it towards the prevention and control of NCDs to address the rising burden of NCDs and lessen their devastating impact on households. The growing threat of NCD against the backdrop of existing health challenges, such as old (such as TB, dengue) and new infectious diseases (such as COVID-19), malnutrition, and injuries, means that a multi-sectoral plan is needed. This involves strengthening primary health systems and health infrastructure, better health coverage and digital health innovations.


Arushi Raj is a researcher who currently works as Associate Research, Outreach, and Photo Archive at SPRF India. She holds a Masters in Sociology from Delhi School of Economics. Previously, she has worked at the Centre for Social Research and the National Human Rights Commission, India. Her areas of interests are gender and technology, digital governance, and education.

Disclaimer: Views expressed in this column are of the author.

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