Strong Health Systems for All with Better Public Spending

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03 Aug Strong Health Systems for All with Better Public Spending

Posted at 03 Aug 2026 in Current Affairs, Daily Current Affairs for UPSC by
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Why in the News?

An editorial has highlighted that many low- and middle-income countries (LMICs), including India, face stagnant health financing due to declining foreign aid and fiscal constraints. It argues that better utilization of existing public health expenditure, rather than only increasing spending, is essential for achieving stronger health systems and Universal Health Coverage (UHC).

Key Highlights

Global Health Financing Scenario

  • Public spending on Universal Health Coverage (UHC) in LMICs remains about half of the minimum required benchmark.
  • Although the health expenditure gap (as a share of GDP) between LMICs and high-income countries has narrowed, the per capita spending gap has widened significantly.
  • This indicates that health systems in developing countries remain underfunded.

Major Challenges

1. Declining International Health Aid

  • Development Assistance for Health (DAH) increased during the COVID-19 pandemic but has declined sharply afterward.
  • Major donor countries have reduced foreign aid:
    • United States: 67% cut
    • United Kingdom: 39% cut
    • France: 35% cut
    • Germany: 12% cut
  • OECD estimates global health aid may decline by up to 60% from its 2022 peak.

Impact

  • Greater pressure on domestic health budgets.
  • Slower progress toward Universal Health Coverage.
  • Increased burden on developing countries.

2. Fiscal Constraints

  • Rising public debt has reduced governments’ fiscal space.
  • Developing countries face increasing debt servicing costs.
  • Limited resources are available for expanding healthcare spending.

Three Ways to Improve Public Health Spending

1. Improve Budget Utilisation

Merely allocating funds is insufficient; effective utilization is equally important.

Issues

  • Health budgets are often underutilized.
  • Implementation delays reduce actual expenditure.
  • In India:
    • Around two-thirds of the allocation under the flagship health infrastructure mission was spent in 2024–25.
    • Only 26% of earmarked funds for communicable and non-communicable disease programmes under the National Health Mission (NHM) were utilized.

Way Forward

  • Ensure timely release and utilization of allocated funds.
  • Strengthen monitoring of expenditure.

2. Invest in the Right Priorities

Current Issues

  • Salaries are generally paid fully, but spending on medicines, equipment, and services remains inadequate.
  • Public spending is concentrated on secondary and tertiary healthcare, while primary healthcare and preventive care receive less attention.

Why Prevention Matters

Investment in:

  • Disease surveillance
  • Vaccination
  • Sanitation
  • Health promotion
  • Early diagnosis
  • Risk-factor reduction

can significantly reduce long-term healthcare costs.

Evidence

  • Public health spending has improved infectious disease outcomes.
  • Greater focus is now needed on:
    • Maternal and child health
    • Non-communicable diseases (NCDs)
    • Ageing population
    • Chronic disease management

3. Strengthen Governance and Efficiency

Good governance determines whether public spending translates into better health outcomes.

Key Measures

  • Reduce corruption.
  • Improve bureaucratic efficiency.
  • Strengthen decentralised governance.
  • Improve public financial management.
  • Ensure timely budget disbursement.
  • Increase accountability.
  • Make procurement systems transparent and efficient.
  • Build flexible budgeting mechanisms to respond to emergencies.

Importance for India

  • Helps achieve Universal Health Coverage (UHC).
  • Improves health outcomes without necessarily increasing expenditure.
  • Reduces out-of-pocket healthcare expenses.
  • Strengthens primary healthcare.
  • Enhances preparedness for future pandemics.
  • Supports achievement of Sustainable Development Goal (SDG) 3 – Good Health and Well-being.

Challenges in India’s Public Health Spending

  • Low public expenditure on health compared to global standards.
  • Underutilisation of allocated funds.
  • Weak primary healthcare infrastructure.
  • Shortage of healthcare workers in rural areas.
  • Inefficient procurement and financial management.
  • Wide interstate disparities in health outcomes.

Way Forward

  • Increase efficiency before increasing expenditure.
  • Ensure complete utilisation of health budgets.
  • Prioritise preventive and primary healthcare.
  • Strengthen governance and financial accountability.
  • Improve procurement systems and digital monitoring.
  • Enhance state and district-level implementation capacity.
  • Focus on value-for-money spending rather than only higher allocations.

UPSC Prelims Practice Question

Q. Which of the following measures would most effectively improve health outcomes without substantially increasing public health expenditure?

  1. Improving utilisation of allocated health budgets.
  2. Increasing investment in preventive and primary healthcare.
  3. Strengthening governance and public financial management.

Select the correct answer using the code below:

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (d)

Explanation

Better utilisation of existing funds, greater investment in preventive and primary healthcare, and improved governance collectively enhance the efficiency and effectiveness of public health spending, leading to better health outcomes even without significant increases in overall expenditure.

Ayush Ranjan
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