Planned Health, Education Expenditure Falls Short of Union Govt's Own Stated Objectives

New Delhi: While Union government ministers have said in the past that their aim is to achieve health spending equivalent to 2.5% of the gross domestic product (GDP), the Budget presented by Union finance minister Nirmala Sitharaman on Sunday (February 1) does not show any movement in that direction.

In it's 'Key Features of the Budget' document, the government has said it plans to spend Rs 1,04,599 crore on health in the coming year. Taking the first advance estimates on GDP for FY 2025-26, Rs 201.90 lakh crore, that would mean the Union government has only set aside about 0.5% of GDP for health expenditure.

The 2017 National Health Policy also said that ideal health spending would be 2.5% of GDP, of which 40% should come from the Centre. That would mean that the Union government spends about 1% of GDP on health. However, as economist Indranil pointed out in The Hindu recently, that goal is nowhere near achieved because "the Union government has not upscaled its health budget as required over the last decade".

Even relative to its neighbours, India's health spend as percentage of GDP is remarkably low. This despite the fact that the COVID years revealed the dismal state of India's health infrastructure and the urgent need for increased investment.

Similarly, for education, the Union Budget sets aside Rs 1,39,289. That comes to about 0.6% of GDP.

The National Education Policy 2020 had recommended spending 6% of GDP on education, which includes the money spent by states. It appears that the Union government expects the states to pay for almost all of this expense, because it's budgeted expenditure on education since the NEP was released has been stagnant at about 0.4% of GDP. However, when taken alongside state spending, India spends about 4.12% of GDP on education.

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