The Indian government has sent a clear message with its latest budget: it is now up to the states to take leadership on health and invest more from their own coffers.
CGD Policy Blogs
Every year, hundreds of thousands of volunteers in South Asia and East Africa walk many miles crossing rivers, mountains, deserts and farmlands to do something amazing: reach remote rural communities to assess whether children can read or do simple maths. Collectively known as Citizen-led Assessments (CLA), every year they show that most children are going to school but less than half of them can read or write at grade level. However, in spite of these universally damning reports, policy change to improve children’s learning has been painfully slow. So the NGO Pratham that started this movement is turning its army of volunteer data collectors into change agents to mobilize entire communities and raise awareness about the learning crisis across India.
India matters for global health. It accounts not only for about one-fifth of the global population, but also one-fifth of the global disease burden. Yet the Indian government spends only 1 percent of its GDP on public health—a paltry amount compared to what other large, federal countries like Brazil and China allocate (4.7 percent and 3.1 percent, respectively). This has a direct impact on Indian citizens who pay more out-of-pocket for health care than citizens in any other G20 country.
2015 has been the year we have been reminded that there have been major gains in development in many parts of the world, but that hundreds of millions of people still suffer the dangerous consequences of poverty, including high levels of maternal and infant mortality, hunger, illness caused by lack of basic sanitation, and death from easily treatable diseases. How can we improve health systems to make them more effective, as well as less wasteful and more accountable?
Health is a state rather than national subject in many countries (as we’ve discussed here and here), and in India this tendency has just become more pronounced. Based on the 14th Finance Commission’s recommendations (more here), money coming from the Central government to states will be less tied up and states more free to spend that money in whatever way they want.
India has embarked on a program using biometric identification to enable a shift from blanket price-based energy subsidies to targeted compensation payments based on actual, individual energy purchases.
India has fallen behind in both health expenditure and health outcomes compared to other lower-middle-income countries. Its burdens of tuberculosis and malaria, and increasingly noncommunicable diseases like diabetes, are one of the largest. Infant mortality and child malnutrition rates rival those in sub-Saharan Africa.
India just did something big for the climate: it announced that it will allocate $6 billion a year in tax revenue in a way that will encourage forest conservation. That’s more results-based finance for forest conservation than any other country in the world, including the current biggest spender Norway.
The fiscal relationship between the Central and State governments in India has just been radically transformed. As far as intergovernmental transfers are concerned, the 14th Finance Commission report will have wide-ranging implications for India and lessons for other large federal countries around the world. Here’s why: