HEALTH CARE EXPENDITURE BY GOVERNMENT IN INDIA: TO

HEALTH CARE EXPENDITURE BY GOVERNMENT IN INDIA: 1974-75 TO 1990-91 (GROWTH, STRUCTURE AND PRIORITIES BY PROGRAMME AND BY SECTOR) K. N. REDDY V.SELVARAJU MARCH 199 4 NATIONAL INSTITUTE OF PUBLIC FINANCE & POLICY 18/2, SATSANG V I HAR MARG SPECIAL INSTITUTIONAL AREA NEW DELHI

P r e f a c e T h e N a t i o n a l I n s t i t u t e of P ublic F i n a n c e and Policy is a n a u t o n o m o u s n o n - p r o f i t o r g a n i s a t i o n e s t a b l i s h e d for c a r r y i n g o u t r e s e a r c h, u n d e r t a k i n g c o n s u l t a n c y work, and i m p a r t i n g t r a i n i n g in t h e f i e l d of p u b l i c f inance and p o l i c y. T h e p r e s e n t s t u d y is t h e o u t c o m e of r e s e a r c h c a r r i e d o u t in t h e Health Economics Cell, c r e a t e d at t h e I n s t i t u t e w i t h f i n a n c i a l a s s i s t a n c e f r o m Ford F o u n d a t i o n, in 1990, in o u r I n s t i t u t e. T h e s t u d y w a s s t a r t e d in 1991 and completed in 1993. K. N. R e d d y p l a n n e d t h e s t u d y a n d d r a f t e d the r e p o r t a s s i s t e d by V. Selvaraju, w h o a l s o p r o c e s s e d the data o n t h e c o m p u t e r. K. K. T r i p a t h y, S u j a J a y a r a m a n, H. K. A m a r n a t h a n d D e b j a n i G u p t a a l s o w e r e a s s o c i a t e d with the s t u d y a t d i f f e r e n t stages. T h e s t u d y brings out t h a t the h e a l t h c a r e expenditures by g o v e r n m e n t (Centre, S t a t e s and U n i o n T e r r i t o r y combined) in I n d i a r a n g e d f r o m 1 p e r c e n t to 2. 1 8 p e r cent of GDP d e p e n d i n g on the a m bit of t h e term " h e a l t h c a re" one chooses t o a d o p t. It t r a c e s t h e t r e n d s in g o v e r n m e n t ' s h e a l t h care e x p e n d i t u r e s from 1 9 7 4-7 5 t o 1 9 9 0-9 1 a n d e x a m i n e s their s t r u c t u r e by f u n c t i o n a l a n d e c o n o m i c c a t e g o r i e s. It is h o p e d t h a t t h e findings of t h i s study w i l l be of interest to p o l i c y m a k e r s a n d r e s e a r c h e r s in t h e f i e l d of h e a l t h e c o n o m i c s. T h e G o v e r n i n g B o d y of t h e I n s t i t u t e d o e s not take r e s p o n s i b i l i t y for t h e v i e w s e x p r e s s e d in t h i s report. That r e s p o n s i b i l i t y b e l o n g s to t h e D i r e c t o r a n d staff of the I n s t i t u t e a n d m o r e p a r t i c u l a r l y to t h e a u t h o r s of the r e p o r t. March, 1994 A. Bagchi Director

Acknowledgements We have r e c e i v e d c o o p e r a t i o n and h e l p from v a r i o u s p e r s o n s in g o v e r n m e n t and o t h e r offices. We t a k e t h i s o p p o r t u n i t y to a c k nowledge their help. Mr. K.K. Tripathy, Miss. Suja J a y a r a m a n, Mr. H.K. A m a r n a t h and Mrs. Debjani Gupta were in the p r o j e c t t e a m for v a r y i n g p e r i o d s a n d h a v e c o n t r i b u t e d g r e a t l y t o t h e c o l l e c t i o n, c o l l a t i o n and c o m p u t a t i o n of data. Dr. G.R. R e d d y and Mr. P r i t a m S i n g h of t h e F i n a n c e M i n i s t r y, G o v e r n m e n t of India e x p l a i n e d t h e m e t h o d o l o g y by w h i c h t h e c o m b i n e d e x p e n d i t u r e of t h e c e n t r a l, s t a t e a n d u n i o n t e r r i t o r y g o v e r n m e n t s is e s t i m a t e d w i t h o u t d o u b l e c o u n t i n g. M i s s K. Sujata Rao, and o f f i c i a l s of C e n t r a l B u r e a u of H e a l t h Intelligence, M i n i s t r y of H e a l t h a n d F a m i l y W e l f a r e, G o v e r n m e n t of India p r o v i d e d l atest p u b l i c a t i o n s of t h e M i n i s t r y f r o m time to time. Mr. G. K u m a r s w a m i R e d d y, S e c r e t a r y, Mrs. M. S. Sastry, J o i n t S e c r e t a r y, Dr. T. B a b u Rao, C o m m i s s i o n e r, Andhra P r a d e s h V a i d y a V i d h a n P a r i s h a d, Dr. P a r a v a t h e e s a m, Director of Health, Mr. M. S u r y a n a r a y a n a, D i r e c t o r of Health, Mr. M adhav Rao, Director, D i r e c t o r a t e of I n s u r a n c e, Mr. K o t e s w a r a Rao, E x e c u t i v e D i r e c t o r, N i z a m ' s I n s t i t u t e of M e d i c a l Sciences, G o v e r n m e n t of A n d h r a Pradesh, e x p l a i n e d t h e f u n c t i o n i n g of the h e a l t h c a r e s y s t e m at t h e s t a t e l e vel a n d the linkages b e t w e e n P l a n a n d n o n - P l a n e x p e n d i t u r e s. A p a r t of chapter t w o w a s p r e s e n t e d at a s e m i n a r o r g a n i s e d j o i n t l y by the W o r l d B a n k a n d t h e A l l I n d i a I n s t i t u t e of M e d i c a l Sciences in J a n u a r y, 1992 a n d h e l p f u l c o m m e n t s w e r e r e c e i v e d f r o m t h e p a r t i c i p a n t s, m o r e p a r t i c u l a r l y from Jose-Luis B o b a d i l l a of the W o r l d Bank. Dr. R a j a J. Chelliah, Chairman, N a t i o n a l I n s t i t u t e of P u b l i c

F i n a n c e a n d Policy, New Delhi, Dr. P. R. P a n c h a m u k h i, D i r e c t o r, C entre for M u l t i - D i s c i p linary Research, Dharwad, Mr. P. K. U m a s h a n k a r, former D i r e c t o r, I n d i a n I n s t i t u t e of P u b l i c A d m i n i s t r a t i on, New Delhi, Dr. Y.C.K. Yesudian, Tata I n s t i t u t e of Social Sciences, Bombay, made h e l p f u l comments o n t h e d r a f t s of the first c h a p t e r b r o u g h t o u t as w o r k i n g p a p e r s of t h e I n s t i t u t e u n d e r d i f f e r e n t t i t l e s some time a g o. Dr. A. Bagchi, Director, and Mr. S. K. Sanyal, C o n s u l t a n t of N a t i o n a l I n s t i t u t e of P u b l i c F i n a n c e and Policy, N e w Delhi and Dr. Peter Berman, A s s o c i a t e Professor o f I n t e r n a t i o n a l H e a l t h E c o n o m i c s, H a r v a r d U n i v e r s i t y, U.S.A. h a d g o n e through the d r a f t r eport and o f f e r e d useful c o m m e n t s. T o a l l t h e a b o v e m e n t i o n e d a n d o t h e r s - p a r t i c u l a r l y, Dr. R o b e r t J. B r e n t of F o r d h a m U n i v e r s i t y ( U S A ), V i s i t i n g F e l l o w, Dr. V. B. T u l a s i d h a r a n d Dr. J. V. M. S a r m a of N a t i o n a l I n s t i t u t e of Public F i n a n c e and Policy, N e w Delhi a n d Dr. D. N. Rao of Jawaharlal N e h r u U n i v e r s i t y - with whom w e h a d u s e f u l d i s c u s s i o n s on t h e subject, o u r g r a t e f u l t h a n k s a r e due. Mr. R. S. Tyagi, has d o n e a c o m m e n d a b l e j o b in word p r o c e s s i n g t h e report. We a p p r e c i a t e h i s s i n c e r i t y, skill, a n d p a t i e n c e in w o r d p r o c e s s i n g t h e n u m e r o u s d r a f t s we had p u t up. O u r thanks are due to him. L a s t, b u t by no m e ans least, t h a n k s a r e d u e to all t h o s e w h o o f f e r e d c o n s t r u c t i v e c r i t i c i s m in t h e s e m i n a r we g a v e o n t h e d r aft report in the N I P F P in May, 1993. N e e d l e s s to m e n t i o n t h a t f o r all t h e e r r o r s and o m i s s i o n s t h a t m a y r e m a i n in t h e report, r e s p o n s i b l e. iii w e a l o n e are (K.N. Reddy) (V. Selvaraju)

C o n t e n t s Page Number Preface A c k n o w l e d g e m e n t s i ii CHAPTER 1 INTRODUCTION 1 1. O b j e c t i v e s and Scope 2 2. Plan of the Study 2 CHAPTER 2 HEALTH CARE EXPENDITURE BY GOVERNMENT - 3 AN ESTIMATE 1. I n t r o d u c t i o n 3 2. M e a n i n g and D e f i n i t i o n of Health 3 Care E x p e n d i t u r e 3. R e v i e w of E s t i mates on H e a l t h Care 6 E x p e n d i t u r e 4. H e a l t h Care E x p e n d i t u r e by Government 7 5. H e a l t h Care E x p e n d i t u r e by Government - 14 An E s t i m a t e for 1990-91 CHAPTER 3 TRENDS IN HEALTH CARE EXPENDITURE BY THE 18 CENTRAL/ THE STATE AND THE UNION TERRITORY GOVERNMENTS COMBINED 1. I n t r o d u c t i o n 18 2. Size and T rends 20 3. S t r u c t u r e 2 4 4. H e a l t h Care E x p e n d i t u r e by Economic 25 C a t e g o r i e s 5. H e a l t h Care E x p e n d i t u r e by the Level of 26 G o v e r n m e n t 6. The R e l a t i o n s h i p Between Health Care 28 E x p e n d i t u r e by G o v e r n m e n t and GDP iv

Page Number CHAPTER INTER-STATE VARIATIONS IN HEALTH CARE 31 EXPENDITURE BY GOVERNMENT 1. I n t roduction 31 2. H e a l t h Care Expenditure by t h e S t a t e and 31 the U n ion Territory G o v e r n m e n t s : T r e n d s 3. Inter-State Variations in H e a l t h C a r e 34 Expenditure in Real T e r m s 4. R e l a t i onships Between Per C a p i t a H e a l t h 42 C a r e Expenditure and Per C a p i t a SDP CHAPTER i PLAN AND NON-PLAN EXPENDITURES IN HEALTH 59 CARE AND LINKAGES BETWEEN THEM 1. I n troduction 59 2. M e a n i n g of Plan and N o n - P l a n E x p e n d i t u r e s 59 3. L i n k a g e s Between Plan and N o n - P l a n 61 E x penditures CHAPTER > PRIORITIES IN HEALTH CARE EXPENDITURE 68 1. I n t r o d u c t i o n 68 2. Classification by P r o g r a m m e a n d by S e c t o r 68 3. H e a l t h Care Expenditure by P r o g r a m m e 69 and by Sector 4. H e a l t h Care Expenditure P r i o r i t i e s 76 a n d H e alth Status 5. S u g g e s t i o n s for R e p r i o r i t i z a t i o n 82 CHAPTER 7 MAIN FINDINGS AND ISSUES FOR 83 FURTHER RESEARCH 1. Introduction 83 2. Size and Trends 83 3. T r e n d s 84 4. I n t e r - S t a t e Variations 86

5. Plan and N o n - P l a n E x p e n d i t u r e s and T h e i r Linkages 88 6. A l l o c a t i o n of R e s o u r c e s by P r o g r a m m e 89 7. A l l o c a t i o n of R e s o u r c e s by S e c t o r 90 8. Impact of P r i o r i t i e s on H e a l t h S tatus 91 9. I s sues for F u r t h e r R e s e a r c h 92 R e f e r e n c e s 233 vi

List of Tables in the Text T a b l e 2. T a b l e 2. T a b l e 2. T a b l e 3. T a b l e 3. T a b l e 3. T a b l e 3. T a b l e 3. T a b l e 3. T a b l e 3. H e alth Care E x p e n d i t u r e by Government in N ominal Terms: 1990-91 (Revenue and Capital A c c o u n t s Combined) H e alth Care E x p e n d i t u r e by Government in N o m i n a l T e r m s B a sed on Conventional D e f i n i t i o n 1 9 9 0-9 1 ( R e v e n u e a n d C apital A c c o u n t s Combined) T r e n d s in Life E x p e c t a n c y at Birth and P e r c e n t a g e of P u b l i c E x p e n d i t u r e on H e a l t h C a r e i n G D P in S e l e c t e d D e v e l o p i n g C o u n t r i e s G r o w t h of " Plan I n v e s t m e n t Outlay" on H e a l t h, F a m i l y W e l f a r e a n d W a t e r S u p p l y in D i f f e r e n t P l a n P e r i o d s in P u b l i c S e c t o r i n N o m i n a l T e r m s (Centre, S t a t e s and U n i o n Territories) H e a l t h Care E x p e n d i t u r e by Government in N o m i n a l Terms: 1974-75 to 1990-91 Per C a p i t a H e a l t h C a r e Expenditure by the G o v e r n m e n t in Real Terms: 1974-75 to 1990-91 S t r u c t u r e of H e a l t h C a r e Expenditure b y t h e G o v e r n m e n t b y F u n c t i o n a l C a t e g o r i e s : 1 9 7 4-7 5 to 1990-91 (the C e n t r a l, t h e S t a t e a n d t h e U n i o n T e r r i t o r y G o v e r n m e n t s Combined) S t r u c t u r e of H e a l t h Care Expenditure b y t h e G o v e r n m e n t b y E c o n o m i c C a t e g o r i e s in N o m i n a l Terms: 1974-75 to 1 9 9 0-9 1 (the C e n t r a l, the State & t h e U n i o n T e r r i t o r y G o v e r n m e n t s Combined) H e a l t h Care E x p e n d i t u r e by Economic C a t e g o r i e s a n d by t h e M a j o r and the S p e c i a l C a t e g o r y S t a t e s : 1 974-75 to 1 990-91 H e a l t h Care E x p e n d i t u r e by the Level of G o v e r n m e n t by F u n c t i o n a l Categories 1974-75 to 1990-91 Page Number 14 16 17 19 21 23 24 26 2 7 2 9 vii

T a b l e 3. T a b l e 4. T a b l e 4. T a b l e 4. T a b l e 4. T a b l e 4. T a b l e 4. T a b l e 4. T a b l e 4. T a b l e 4. R e l a t i o n s h i p Between Per C apita H e a l t h Care E x p e n d i t u r e and Per C apita G D P Per C a p i t a Health Care E x p e n d i t u r e by t h e S t a t e and t h e U n i o n T e r r i t o r y G o v e r n m e n t s in Real Terms: 1 9 7 4-7 5 to 1990-91 Per C a p i t a H ealth Care E x p e n d i t u r e () by the the S t a t e and t h e U n i o n T e r r i t o r y G o v e r n m e n t s in R e a l T e r m s and its R e l a t i v e R a n k i n g : 1 9 7 4-7 5 to 1990-91 Per C a p i t a E x p e n d i t u r e on M e d i c a l a n d P u b l i c H e a l t h by t h e S t a t e a n d t h e U n i o n T e r r i t o r y G o v e r n m e n t s in R e a l T erms a n d its R e l a t i v e R a n k i n g : 1 9 7 4-7 5 to 1990-91 Per C a p i t a E x p e n d i t u r e on F a m i l y W e l f a r e by the S t a t e a n d t h e U n i o n T e r r i t o r y G o v e r n m e n t s in R e a l T e r m s and its R e l a t i v e R a n k i n g : 1 9 7 4-7 5 t o 1990-91 Per C a p i t a E x p e n d i t u r e on W a t e r S u p p l y and S a n i t a t i o n by t h e S t a t e a n d t h e U n i o n T e r r i t o r y G o v e r n m e n t s in R e a l Terms a n d its R e l a t i v e R a n k i n g : 1 9 7 4-7 5 to 1990-91 Per C a p i t a E x p e n d i t u r e on N u t r i t i o n by t h e S t a t e and t h e U n i o n T e r r i t o r y G o v e r n m e n t s in R e a l T e r m s a n d its R e l a t i v e Ranking: 1 9 7 4-7 5 t o 1 9 9 0-9 1 Per C a p i t a E x p e n d i t u r e on C h i l d a n d H a n d i c a p p e d W e l f a r e by t h e S t a t e a n d t h e U n i o n T e r r i t o r y G o v e r n m e n t s in Real T e r m s and its R e l a t i v e R a n k i n g : 1974-75 to 1990-91 C o e f f i c i e n t of V a r i a t i o n in H e a l t h C a r e E x p e n d i t u r e A m o n g t h e M a j o r S t a t e s, the S p e c i a l C a t e g o r y S t a t e s a n d A l l the S t a t e s (In Per C a p i t a R e a l Terms) Per C a p i t a Health C a r e E x p e n d i t u r e a n d Per C a p i t a SDP in R e a l T e r m s Page N u mber 30 33 35 36 37 38 39 40 43 45 viii

Page Number Table T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e.10 Income Elasticity of Health Care 46 Expenditure: 1974-75 to 1990-91 (Major States).11 Income E l a s t i c i t y of H e a l t h Care 46 E x p e n d i t u r e : 1 9 7 4-7 5 to 1 9 9 0-9 1 (All States).12 Income E l a s t i c i t y of H e a l t h Care 47 E x p e n d i t u r e in M a j o r States: 1 9 7 4-7 5 to 1990-91.13 Income E l a s t i c i t y of H e a l t h Care 48 E x p e n d i t u r e i n S p e c i a l C a t e g o r y States: 1 9 7 4-7 5 t o 1990-91.14 Income E l a s t i c i t y of M e d i c a l and P ublic 49 H e a l t h E x p e n d i t u r e in M a j o r States: 1974-75 to 1 9 9 0-9 1.15 I ncome E l a s t i c i t y of M e d i c a l and P u b l i c 50 H e a l t h E x p e n d i t u r e in Special C a t e g o r y States: 1 9 7 4-7 5 to 1 990-91.16 I ncome E l a s t i c i t y of Family W e l f a r e 51 E x p e n d i t u r e in M a j o r States: 1 9 7 4-7 5 to 1990-91.17 I ncome E l a s t i c i t y of F amily W e l f a r e 52 E x p e n d i t u r e i n S p e c i a l C a t e g o r y States: 1 9 7 4-7 5 t o 1990-91.18 I ncome E l a s t i c i t y of W a t e r S upply and 53 S a n i t a t i o n E x p e n d i t u r e in M a j o r States: 1 9 7 4-7 5 to 1990-91.19 I n c o m e E l a s t i c i t y of W a t e r S upply and 54 S a n i t a t i o n E x p e n d i t u r e in S p e c i a l C a t e g o r y States: 1974-75 to 1990-91.20 I n c o m e E l a s t i c i t y of N u t r i t i o n 55 E x p e n d i t u r e in M a j o r States: 1 9 7 4-7 5 to 1990-91.21 I n c o m e E l a s t i c i t y of N u t r i t i o n 56 E x p e n d i t u r e i n S p e c i a l C a t e g o r y States: 1 9 7 4-7 5 to 1990-91.22 I n c o m e E l a s t i c i t y of C h i l d and H a n d i c a p p e d 57 W e l f a r e E x p e n d i t u r e in M a j o r States: 1974-75 to 1 9 9 0-9 1 ix

Page Number Table T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e T a b l e.23 I n c o m e E l a s t i c i t y of Child and H a n d i c a p p e d 58 W e l f a r e E x p e n d i t u r e in S p e c i a l C a t e g o r y States: 1974-75 to 1990-91.1 P e r C a p i t a Plan and Non-Plan E x p e n d i t u r e s 62 o n H e a l t h C a r e in R e a l T e r m s by F u n c t i o n a l C a t e g o r i e s : 1 9 7 4-7 5 t o 1990-91.2 E l a s t i c i t y of Non-Plan E x p e n d i t u r e s 64 w i t h r e s p e c t to Plan E x p e n d i t u r e s (All G o v e r n m e n t s Combined) by F u n c t i o n a l C a t e g o r i e s : 1974-75 to 1990-91.3 E l a s t i c i t y of Non-Plan E x p e n d i t u r e w i t h 64 r e s p e c t t o P l a n E x p e n d i t u r e s of A l l S t a t e s b y F u n c t i o n a l C a t e g o r i e s : 1 9 7 4-7 5 to 1990-91.4 E l a s t i c i t y of Non-Plan E x p e n d i t u r e w i t h 65 r e s p e c t t o P l a n E x p e n d i t u r e s of A l l S t a t e s by Economic Categories: 1974-75 t o 1990-91.5 E l a s t i c i t y of Health Care 67 E x p e n d i t u r e of All States w i t h r e s p e c t t o t h e E x p e n d i t u r e o n E c o n o m i c C a t e g o r i e s : 1974-75 to 1990-91.1 E x p e n d i t u r e on Medical, P u b l i c H e a l t h 70 a n d F a m i l y W e l f a r e b y L e v e l o f G o v e r n m e n t.2 S t r u c t u r e of Health Care E x p e n d i t u r e 72 by P u r p o s e and by Level of G o v e r n m e n t : 1 9 7 4-7 5 to 1990-91.3 P e r c e n t a g e Shares of Rural and U r b a n 75 S e c t o r s in H ealth Care E x p e n d i t u r e s by L e v e l of Government: 1990-91.4 D i s t r i b u t i o n of Resources A m o n g 77 C u r a t i v e, P r e v e n t i v e a n d O t h e r S e r v i c e s by S e c t o r s and by L e v e l of G o v e r n m e n t : 1990-91 x

Page Number Table 6. T a b l e 6. T a b l e 6. R e s u l t s of R e l a t i o n s h i p Between Health 78 S t a t u s I n d i c a t o r L E B ( D e p e n d e n t V a r i a b l e ) and H e a l t h C a r e Services, V i z., D i r e c t i o n and A d m i n i s t r a t i o n, Curative, P r e v e n t i v e and M i s c e l l a n e o u s ( I n d e p e n d e n t Variables) R e s u l t s of R e l a t i o n s h i p B e t w e e n Health 80 S t a t u s I n d i c a t o r L E B ( D e p e n d e n t V a r i a b l e ) a n d H e a l t h C a r e Services, V i z., W a t e r S u p p l y and S a n i t a t i o n, N u t r i t i o n a n d C h i l d a n d H a n d i c a p p e d W e l f a r e (Independent Variables) R e s u l t s of R e l a t i o n s h i p B e t w e e n Health 81 S t a t u s I n d i c a t o r L E B ( D e p e n d e n t V a r i a b l e ) a n d H e a l t h C a r e Services, V i z., M e d i c a l, P u b l i c H e a l t h a n d F a m i l y W e l f a r e, W a t e r S u p p l y a n d S a n i t a t i o n, N u t r i t i o n a n d C h i l d and H a n d i c a p p e d W e l f a r e ( I n d e p e n d e n t Variables) xi

List of Appendixes Page Number APPENDIX A Health C o n c e p t s U s e d in the S t u d y 95 APPENDIX B B a ses for A p p o r t i o n m e n t of H e a l t h 96 E x p e n d i t u r e s B e t w e e n Rural and U r ban S e c t o r s APPENDIX C Health S t a t u s a n d Its D e t e r m i n a n t s 101 xii

A P P E N D I X TABLES T r e n d s in D e a t h Rate, Birth Rate, Natural G r o w t h R a t e and Infant M o r t a l i t y Rate by R u r a l a n d Urban: 1971-1989 T r e n d s in L i f e Expectancy at Birth: 1991 to 2001 D e p e n d e n t Population as P e r c e n t a g e of T o t a l Population: 1971 and 1981 H e a l t h S t a t u s Indicators by S t a t e s P r i c e D e f l a t o r s Used for the C o n v e r s i o n o f H e a l t h C a r e E x p e n d i t u r e f r o m N o m i n a l T e r m s (Current Prices) to Real T e r m s ( C o n s t a n t 1 9 8 0-8 1 P r i c e s ) : 1 9 7 4-7 5 to 1990-91 H e a l t h C a r e Expenditure by level of G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in Current Prices: 1974-75 (in Percentage) H e a l t h C a r e Expenditure by level of G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in Current Prices: 1978-79 (in P e r c e n t a g e ) H e a l t h C a r e Expenditure by level of G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in Current Prices: 1982-83 (in P e r c e n t a g e ) H e a l t h C a r e Expenditure by level of G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in Current Prices: 1986-87 (in P e r c e n t a g e ) H e a l t h C a r e Expenditure by level of G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in Current Prices: 1990-91 (in P e r c e n t a g e ) P e r C a p i t a Health Care E x p e n d i t u r e by l e v e l of G o v e rnment and by Functional C a t e g o r i e s in Current Prices: 1974-75 (in Rupees) 109 110 110 111 112 113 115 117 119 121 123

Page umber Per C a pita Health C a r e E x p e n d i t u r e by level of Government a n d by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1978-79 (in Rupees) Per C a p i t a Health C a r e E x p e n d i t u r e by level of G o v e r n m e n t a n d by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1982-83 (in Rupees) Per C a p i t a Health C a r e E x p e n d i t u r e by level of G o v e r n m e n t and by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1986-87 (in Rupees) Per C a p i t a Health C a r e E x p e n d i t u r e by level of G o v e r n m e n t a n d by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1 990-91 (in Rupees) S h a r e of Health C a r e E x p e n d i t u r e in T o t a l G o v e r n m e n t E x p e n d i t u r e by Level o f G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1974-75 (in %) S h a r e of H e a l t h C a r e E x p e n d i t u r e in T o t a l G o v e r n m e n t E x p e n d i t u r e by L e vel o f G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1 978-79 (in %) S h a r e of H ealth C a r e E x p e n d i t u r e in T o t a l G o v e r n m e n t E x p e n d i t u r e by L e vel o f G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1982-83 (in %) S h a r e of H e a l t h C a r e E x p e n d i t u r e in T o t a l G o v e r n m e n t E x p e n d i t u r e by L e v e l o f G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1 9 8 6-8 7 (in %) S h a r e of H e alth Care E x p e n d i t u r e in T o t a l G o v e r n m e n t E x p e n d i t u r e by L e v e l o f G o v e r n m e n t a n d b y F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1 9 9 0-9 1 (in %) 125 127 129 131 133 135 137 139 141 xiv

Page N u m b e r TABLE A.21 Share of H e a l t h Care Expenditure in G D P / N S D P by Level of Government and by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1974-75 (in Percentage) TABLE A. 22 Share of H e a l t h Care E x p enditure in G D P / N S D P by Level of Government and by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1978-79 (in Percentage) TABLE A.23 Share of H e a l t h Care Expenditure in G D P / N S D P by Level of Government and by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1982-83 (in Percentage) TABLE A. 24 Share of H e a l t h Care Expenditure in G D P / N S D P by Level of G o v e rnment and by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1986-87 (in Percentage) TABLE A.25 Share of H e a l t h Care E x p enditure in G D P / N S D P by Level of Government and by F u n c t i o n a l C a t e g o r i e s in C u r r e n t Prices: 1990-91 (in Percentage) 143 145 147 149 151 TABLE A.26 TABLE A.27 TABLE A.28 TABLE A.29 TABLE A. 30 S hare of Functional Categories in H e a l t h C a r e E x p e n d i t u r e by L e v e l of G o v e r n m e n t in Current Prices - 197 4-7 5 (in Percentage) Share of Functional Categories in H e a l t h C a r e E x p e n d i t u r e by L e v e l of G o v e r n m e n t in Current Prices - 1978-79 (in Percentage) Share of Functional Categories in H e a l t h C a r e E x p e n d i t u r e by L e v e l of G o v e r n m e n t in Current Prices - 1982-83 (in Percentage) Share of Functional Categories in T o tal H e a l t h C a r e E x p e n d i t u r e by L e v e l of G o v e r n m e n t in Current Prices - 1982-83 (in Percentage) Share of Functional Categories in T o t a l H e a l t h C a r e E x p e n d i t u r e by L e v e l of G o v e r n m e n t in Current Prices - 1986-87 (in Percentage) 153 155 157 159 161 XV

S h a r e of Functional C a t e gories in H e a l t h C a r e E x p e n d i t u r e by Level of G o v e r n m e n t in Current Prices - 1990-91 (in Percentage) Per C a p i t a Health Care Expenditure by level of Governments and by Functional C a t e g o r i e s in C o n s t a n t ( 1 9 8 0-8 1 ) Prices: 1974-75 (in Rupees) Per C a p i t a Health Care E x p e n d i t u r e by level of Governments, and by Functional C a t e g o r i e s in C o n s t a n t ( 1 9 8 0-8 1 ) Prices: 1978-79 (in Rupees) P e r C a p i t a Health Care E x p e n d i t u r e by level of Governments and by F u n c tional C a t e g o r i e s in C o n s t a n t ( 1 9 8 0-8 1 ) Prices: 1982-83 (in Rupees) Per C a p i t a Health Care E x p e n d i t u r e by level of Governments and by Functional C a t e g o r i e s in C o n s t a n t ( 1 9 8 0-8 1 ) Prices: 1986-87 (in Rupees) P e r C a p i t a Health Care E x p e n d i t u r e by l e vel of Governments and by Functional C a t e g o r i e s in C o n s t a n t ( 1 9 8 0-8 1 ) Prices: 1990-91 (in Rupees) S h a r e of Plan and Non-Plan E x p e n d i t u r e s b y L e v e l of G o v e r n m e n t s a n d b y F u n c t i o n a l C a t e g o r i e s in C o n s t a n t (1980-81) Prices: 1974-75 (in %) S h a r e of Plan and Non-Plan E x p e n d i t u r e s b y L e v e l of G o v e r n m e n t s a n d b y F u n c t i o n a l C a t e g o r i e s in C o n s t a n t (1980-81) Prices: 1978-79 (in %) S h a r e of Plan and Non-Plan E x p e n d i t u r e s b y L e v e l of G o v e r n m e n t s a n d b y F u n c t i o n a l C a t e g o r i e s in C o n s t a n t (1980-81) Prices: 1982-83 (in %) S h a r e of Plan and Non-Plan E x p e n d i t u r e s b y L e v e l of G o v e r n m e n t s a n d b y F u n c t i o n a l C a t e g o r i e s in C o n s t a n t (1980-81) Prices: 1986-87 (in %) 163 165 167 169 171 173 175 177 179 181 xvi

TABLE A.41 TABLE A.42 TABLE A.43 TABLE A.44 TABLE A.45 TABLE A.46 S h a r e of P l a n and Non-Plan E x p e n d i t u r e s b y L e v e l of G o v e r n m e n t s a n d b y F u n c t i o n a l C a t e g o r i e s in C o n s t a n t (1980-81) Prices: 1990-91 (in %) D i s t r i b u t i o n of E x p e n d i t u r e on Medical R e l i e f in H o s p i t a l s a n d D i s p e n s a r i e s by E c o n o m i c C a t e g o r i e s : 1 9 7 4-7 5 (in P e r c e n t a g e ) D i s t r i b u t i o n of E x p e n d i t u r e on Medical R e l i e f in H o s p i t a l s and D i s p e n s a r i e s by E c o n o m i c C a t e g o r i e s : 1 978-79 (in P e r c e n t a g e ) D i s t r i b u t i o n of E x p e n d i t u r e on Medical R e l i e f in H o s p i t a l s a n d D i s p e n s a r i e s by E c o n o m i c C a t e g o r i e s : 1982-83 (in P e r c e n t a g e ) D i s t r i b u t i o n of E x p e n d i t u r e on Medical R e l i e f in H o s p i t a l s a n d D i s p e n s a r i e s by E c o n o m i c C a t e g o r i e s : 1986-87 (in P e r c e n t a g e ) D i s t r i b u t i o n of E x p e n d i t u r e on Medical R e l i e f in H o s p i t a l s a n d D i s p e n s a r i e s by E c o n o m i c C a t e g o r i e s : 1990-91 (in P e r c e n t a g e ) Page N u m b e r 183 184 185 186 187 188 TABLE A. 47 S h a r e of E c o n o m i c C a t e g o r i e s in Plan a n d N o n - P l a n E x p e n d i t u r e on M e d i c a l R e l i e f in H o s p i t a l s and Dispensaries: 1 9 7 4-7 5 (in Percentage) TABLE A. 48 S h a r e of E c o n o m i c C a t e g o r i e s in Plan a n d N o n - P l a n E x p e n d i t u r e on M e d i c a l R e l i e f in H o s p i t a l s and Dispensaries: 1 9 7 8-7 9 (in Percentage) TABLE A. 49 S h a r e of E c o n o m i c C a t e g o r i e s in Plan a n d N o n - P l a n E x p e n d i t u r e on M e d i c a l R e l i e f in H o s p i t a l s and Dispensaries: 1 9 8 2-8 3 (in Percentage) TABLE A. 50 S h a r e of E c o n o m i c C a t e g o r i e s in Plan a n d N o n - P l a n E x p e n d i t u r e on M e d i c a l R e l i e f in H o s p i t a l s and Dispensaries: 1 9 8 6-8 7 (in Percentage) 189 190 191 192 xvii

Page Number T A B L E U51 Share of E x p e n d i t u r e on Medical, Public H e a l t h a n d F a m i l y W e l f a r e b y Programmes and by L e v e l of G o v e r n m e n t s in C u r r e n t P r i c e s - 1 9 7 4-7 5 (in Percentage) 193 TABLE 1.52 Share of E x p e n d i t u r e o n H e a l t h a n d F a m i l y Programmes and by L e v e l in C u r r e n t P r i c e s Percentage) M e d i c a l, Public W e l f a r e b y of G o v e r n m e n t s 1 9 7 8-7 9 (in 197 TABLE V. 53 Share of E x p e n d i t u r e on H e a l t h a n d F a m i l y Programmes and by L e v e l in C u r r e n t P r i c e s Percentage) M e d i c a l, Public W e l f a r e b y of G o v e r n m e n t s 1 9 8 2-8 3 (in 201 TABLE 1.54 Share of E x p e n d i t u r e on H e a l t h a n d F a m i l y P r o g r a m m e s and by L e v e l in C u r r e n t P r i c e s Percentage) Medical, P ublic W e l f a r e b y of G o v e r n m e n t s 1 9 8 6-8 7 (in 205 TABLE Share of E x p e n d i t u r e on M e d i c a l, P u b l i c H e a l t h a n d F a m i l y W e l f a r e b y Programmes and by L e v e l of G o v e r n m e n t s in C u r r e n t P r i c e s - 1 9 9 0-9 1 (in Percentage) 209 TABLE V.56 Per C a p i t a E x p e n d i t u r e on Medical, P u b l i c H e a l t h and F a m i l y W e 1 f a r e by P r o g r a m m e s and by L e v e l of G o v e r n m e n t s in C u r r e n t P r i c e s - 1 9 7 4-7 5 (in Rupees) 213 TABLE i.57 Per C a p i t a E x p e n d i t u r e on Medical, P u b l i c H e a l t h and F a m i l y W e l f a r e by P r o g r a m m e s and by L e v e l of G o v e r n m e n t s in C u r r e n t P r i c e s - 1 9 7 8-7 9 (in Rupees) 217 TABLE 58 Per C a p i t a E x p e n d i t u r e on M e d i c a l, P u b l i c H e a l t h and F a m i l y W e l f a r e by P r o g r a m m e s and by L e v e l of G o v e r n m e n t s in C u r r e n t P r i c e s - 1 9 8 2-8 3 (in Rupees) 221 xviii

T A B L E TABLE.59 Per Capita E x p e n d i t u r e on Medical, P u b l i c H e a l t h and F a m i l y W e l f a r e by P r o g r a m m e s and by Level of Governments in C u r r e n t P r i c e s - 1 9 3 6-3 7 (in Rupees).60 Per C apita E x p e n d i t u r e on Medical, P u b l i c H e a l t h a n d F a m i l y W e l f a r e by P r o g r a m m e s and by L e vel of Governments in C u r r e n t P r i c e s - 1 9 9 0-9 1 (in Rupees) Page N u m b e r 225 229 xix

C H A P T E R 1 INTRODUCTION " H e a l t h is w e a l t h " g o e s the a d a g e in India and it is r e l e v a n t for all c o u n t r i e s in the world. G o o d h e a l t h is an e s s e n t i a l r e q u i r e m e n t f o r t h e e n j o y m e n t of e v e r y a s p e c t of life. A c h r o n i c a l l y sick person, in spite of his high income a n d h i g h e d u c a t i o n, c a n n o t e n j o y h i s life a n d w o u l d c o n t r i b u t e v e r y little g o o d to the society. Perhaps for this r e a s o n, a l m o s t all t h e c o u n t r i e s in t h e w o r l d are s p e n d i n g s i z e a b l e r e s o u r c e s on h e a l t h care. I n t h e U n i t e d S t a t e s o f A m e r i c a h e a l t h c a r e e x p e n d i t u r e s a c c o u n t f o r 12.2 p e r c e n t of G r o s s D o m e s t i c P r o d u c t (GDP)*. In t h e U n i t e d K i n g d o m t h e y a c c o u n t for 6.1 p e r c e n t of GDP. In Canada, Germany, F rance and S w e d e n they a c c o u n t for 9.3 per cent, 8.6 per cent, 8.8 per cent and 8.6 p e r c e n t of G D P r e s p e c t i v e l y *. In China, R e p u b l i c of K o r e a a n d I n d o n e s i a t h e y a c c o u n t for 3.1 p e r cent, 6.4 p e r cent a n d 2. 5 p e r c e n t r e s p e c t i v e l y * *. In India, t h e y a r e e s t i m a t e d t o be in the r a n g e of 0.9 p e r c e n t to 9 p e r cent of G D P d e p e n d i n g on the e s t i m a t e one likes to put on faith. A s a r e s u l t no firm view is p o s s i b l e as to h o w m u c h is spent on h e a l t h care by government or by p r i v a t e sector or by both g o v e r n m e n t and private s e c t o r s t o g e t h e r in India. Similarly, l i t t l e is k n o w n about the p r i o r i t i e s in r e s o u r c e a l l o c a t i o n b y t h e g o v e r n m e n t in India. It is the e n d e a v o u r of this s t u d y t o fill these gaps to the e xtent possible. health expenditure (public and private sectors combined) as percentage of GDP for 1990 (Source: UNDP, Human Developlment Report, 1993, p. 193). Public health expenditure as percentage of GNP for 1989-90 (Source: UNDP, Human Development Report, 1993, pp. 153-159), See also Table 2.3. 1

1. Objectives and Scope the study: B r i e f l y s p e a k i n g, the following are t h e o b j e c t i v e s of i. t o e s t i m a t e the size and c o m p o s i t i o n of h e a l t h c a r e e x p e n d i t u r e by g o v e r n m e n t - n a m e l y, t h e c e n t r a l, t h e s t a t e a n d t h e u n i o n t e r r i t o r y g o v e r n m e n t s ; ii. t o e x a m i n e the trends in h e a l t h c a r e e x p e n d i t u r e f r o m 1974-75 to 1990-91; iii. t o p r e s e n t the i n t er-state v a r i a t i o n s in h e a l t h c a r e expenditure; iv. t o e x a m i n e the linkages between p l a n a n d n o n - p l a n e x p e n d i t u r e ; and v. t o s t u d y the p r i o r i t i e s in t h e a l l o c a t i o n of r e s o u r c e s among d i f f e r e n t h e a l t h c a t e g o r i e s a n d p r o g r a m m e s and by sectors. 2. Plan of the Study T h e s t u d y is divided into seven chapters. In t h e s e c o n d c h a p t e r c o n c e p t u a l a n d s t a t i s t i c a l p r o b l e m s f u n d a m e n t a l to t h e e s t i m a t i o n of t h e size of h e a l t h c a r e e x p e n d i t u r e by g o v e r n m e n t a r e d i s c u s s e d. In t h e third, t r e n d s in h e a l t h c a r e e x p e n d i t u r e in nominal and real terms are e x a m i n e d. In t h e f o u r t h c h a p t e r i n t er-state v a r i a t i o n s in p e r c a p i t a h e a l t h e x p e n d i t u r e s are p r e s e n t e d and a n a l y s e d in r e l a t i o n to t h e r e s p e c t i v e s t a t e domestic products. T h e f i f t h c h a p t e r d i s c u s s e s l i n k a g e s b e t w e e n plan, n o n - p l a n e x p e n d i t u r e s by l e v e l o f g o v e r n m e n t. Priorities for h e a l t h c a r e a r e d e a l t w i t h in t h e s i x t h chapter. A n d in the s e v e n t h a n d f i n a l c h a p t e r t h e m a i n f i n d i n g s are s u m m a r i s e d a n d i s s u e s f o r f u r t h e r r e s e a r c h a r e outlined. 2

C H A P T E R 2 HEALTH CARE EXPENDITURE BY GOVERNMENT - AN ESTIMATE 1. Introduction In t h i s chapter, the size of health care e x p e n d i t u r e by t h e G o v e r n m e n t in India is estimated. In the second section, a s p e c t s r e l a t i n g to t h e m e a n i n g and d e f i n i t i o n of h e a l t h c a r e e x p e n d i t u r e are d e a l t with. T h e t h i r d s e c t i o n r e v i e w s e s t i m a t e s m a d e s o f a r o n t h e s i z e of h e a l t h c a r e e x p e n d i t u r e. N e x t m e t h o d o l o g y a n d c o n c e p t u a l p r o b l e m s a s s o c i a t e d w i t h t h e e s t i m a t e s m a d e in t h i s s t u d y are d e s c r i b e d. Finally, b a s e d on the m e t h o d o l o g y described, the s i z e o f h e a l t h care e x p e n d i t u r e for 1990-91 is e s t i m a t e d and c o m p a r e d w i t h that Of o t her countries. 2. Meaning and Definition of Health Care Expenditure I t m a y be noted at the outset that there is no standard d e f i n i t i o n of h e a l t h c a r e e x p e n d i t u r e. It v a r i e s w i t h the p u r p o s e o n h a n d a n d t h e m e a n i n g of h e a l t h o n e t a k e s into a c c o u n t. T h e W o r l d H e a l t h O r g a n i s a t i o n (WHO) d e f i n e s health as a state of complete physical, mental and social well being and not merely the absence of disease or infirmity. B u t s u c h a d e f i n i t i o n is too wide and expects us to include a l l k i n d s of f i n a n c i n g that help p r o m o t e welfare. V i ctor R. F u c h s (1987) a well k n o w n h ealth economist, o p i n e d that there is no completely objective, invariant ordering across individuals or populations with respect to health. Health can be defined according to criteria such as life expectancy, capacity for work, need for medical care, or ability to perform a variety of personal and social functions. E c o n o m i s t s h a v e d e f i n e d it in t e r m s of life e x p e c t a n c y at b i r t h (LEB) or in terms of infant m o r t a l i t y rate (IMR) or in 3

t e r m s of c r u d e d e a t h rate (CDR). S o m e e c o n o m i s t s even v e n t u r e d t o t a k e into account m o r t a l i t y, m o r b i d i t y and h e a l t h r e l a t e d limitations s i m u l t a n e o u s l y by w e i g h i n g years of life a c c o r d i n g to illness and d i s a b i l i t y, w i t h o u t success h o w e v e r (Victor R. Fuchs, 1987). By a n d large, LEB has been r e c o g n i s e d as the indicator of h e a l t h status, and has been c o n s i d e r e d as the function of m e d i c a l care, income, education, sex, race, m a r i t a l status, e n v i r o n m e n t a l p o l l u t i o n and p e r s o n a l b e h a v i o u r s u c h as c i g a r e t t e s m o k i n g, diet, exercise, a n d so on (Guy Carrin, 1984). G i v e n t h e n u m e r o u s v a r i a b l e s i n f l u e n c i n g health, it b e c o m e s t o o d i f f i c u l t to define w h a t h e a l t h care s p e n d i n g is o r w h a t i t e m s c o n s t i t u t e h e a l t h c a r e e x p e n d i t u r e truly. H o w e v e r, f r o m t h e p o i n t of v i e w of a l l o c a t i n g r e s o u r c e s to h e a l t h c a r e in government, a v i e w h a s b e e n e m e r g i n g s l owly a b o u t w h a t t h o s e e x p e n d i t u r e s are, a l t h o u g h d i f f e r e n c e s s t i l l p e r s i s t a m o n g economists as to w h a t s h o u l d be included u n d e r t h e l a b e l h e a l t h expenditure. A c c o r d i n g to an expert on h e a l t h economics, "all those a c t i v i t i e s w i t h a p r i m a r y a n d s i g n i f i c a n t ( b u t n o t n e c e s s a r i l y sole) purpose, being h e a l t h improvement, should be i n c l u d e d, w h i l e others m u s t be j u d g e d on t h e i r merits. F o r e x a m p l e, s p e n d i n g on rural h e a l t h c e n t r e s, s h o u l d be o b v i o u s l y included, but including p u b l i c h o u s i n g i n v estments p r o b a b l y c a s t s t h e net too wide. G e n e r a l f o o d s u b s i d i e s w o u l d n o t n o r m a l l y be listed e x p l i c i t l y as h e a l t h spending, b u t ' t a r g e t e d r e m e d i a l feeding p r o g r a m m e s ' c o u l d be. T o date, h e a l t h, f i n a n c i n g researchers in I n dia h a v e not dealt s y s t e m a t i c a l l y w i t h this issue" (Berman, Peter, 1988). A s f a r as w e a r e concerned, e x p e n d i t u r e s on m e d i c a l, p u b l i c h e a l t h ; f a m i l y welfare; w a t e r s u p p l y and sanitation; n u t r i t i o n ; a n d c h i l d and h a n d i c a p p e d w e l f a r e are h e a l t h care e x p e n d i t u r e s as t h e y directly i n f l u e n c e h e a l t h s t a t u s (LEB) in India. 4

U n f o r t u n a t e l y, i n f ormation as per the above d e f i n i t i o n is not r e a d i l y a v a i l a b l e from government documents. W h a t e v e r is a v a i l a b l e is s u b j e c t to a n u m b e r of l i m i t a t i o n s. For e x a m p l e (a) t h e C e n t r a l S t a t i s t i c a l O r g a n i s a t i o n (CSO), G o v e r n m e n t of India has been publishing figures in National A c c o u n t s S t a t i s t i c s, u n d e r the headings of " e c o nomic p urpose c l a s s i f i c a t i o n of p u b l i c expenditure" and "private consumer e x p e n d i t u r e o n h e a l t h care". It excludes e x p e n d i t u r e on m e d i c a l e d u c a t i o n, w e l f a r e services, c o m m u n i t y s e r v ices, w a t e r supply, a n d so forth, w h i c h are mostly h e a l t h related, b u t a d d s t h e s a m e t o s o m e o t h e r f u n c t i o n a l h e a d s. C o n s e q u e n t l y, t h e f i g u r e s a r e a g r oss u n d e r s t a t e m e n t of h e a l t h c a r e e x p e n d i t u r e. S i m i l a r l y, t h e O f f i c e of t h e C o m p t r o l l e r a n d A u d i t o r G e n e r a l of I n d i a (CAGO) h a s b e e n p u b l i s h i n g f i g u r e s in its p u b l i c a t i o n C o m b i n e d F i n a n c e and Revenue A ccount of Central a n d S t a t e G o v e r n m e n t s a n n u a l l y, by d i v i d i n g t h e h e a l t h s e c t o r i n t o (1) M e d i c a l ( m e d i c a l relief, m e d i c a l e d u c a t i o n a n d r e s e a r c h, h o s p i t a l s a n d d i s p e n s a r i e s, Employees' State I n s u r a n c e S c h e m e ( E S I S ), Central Government H o s p i t a l s Scheme (C G H S ), e t c. ) ; (2) P u b l i c H e a l t h ( c o m m u nicable d i s e a s e c o n t r o l, p r i m a r y h e a l t h care, w a t e r supply and s a n i t a t i o n, etc.), a n d (3) F a m i l y W e l f a r e (family planning, m a t e r n a l and c h i l d h e a l t h i m m u n i z a t i o n, e t c. ). But e x p e n d i t u r e on n u t r i t i o n, c o n t r o l of p o l l u t i o n, child and h a n d i c a p p e d w e l f a r e w h i c h a r e h e a l t h r e l a t e d are excluded a l t h o u g h they h e l p i m p r o v e h e a l t h s t a t u s c o n s i d e r a b l y. More i m p o r t a n t l y t h e s e f i g u r e s h a v e a lag of six or seven years and h e nce are n ot of m u c h h e l p f o r p o l i c y purposes. In t h e s a m e way, t h e D e p a r t m e n t of E c o n o m i c Affairs, M i n i s t r y o f F i n a n c e ( D E A M F ), G o v e r n m e n t of I n d i a has been p u b l i s h i n g d a t a o n (i) M e d i c a l, public health, s a n i t a t i o n a n d w a t e r s u p p l y ; (i i ) F a m i l y welfare, and (iii) S ocial s e c u r i t y a n d w e l f a r e in its I n d i a n Economic S t a t i s t i c s 5

b r o u g h t o u t a n n u a l l y, for the c e n t r a l, s t a t e and union t e r r i t o r y g o v e r n m e n t s combined. T h e d a t a a r e e x t r emely u s e f u l in a r r i v i n g at the size of h e a l t h c a r e expenditure. B u t n o d e t a i l s a b o u t the c o m p o s i t i o n of e a c h of the items a r e a v a i l a b l e, nor are the b r e a k u p s a b o u t h e a l t h care e x p e n d i t u r e by i n d i v i d u a l s t a t e a n d u n i o n t e r r i t o r y g o v e r n m e n t s a v a i l a b l e separately. T h e r e is no comparability of t h e f i g u r e s among the three s o u r c e s ; t h e d i f f e r e n c e s are o b s e r v e d t o be very wide. 3. Review of Estimates on Health Care Expenditure S o m e s t u d i e s h o w e v e r are a v a i l a b l e o n t h e estimates of h e a l t h c a r e e x p e n d i t u r e by p u b l i c a n d p r i v a t e s e c t o r s put t o g e t h e r. T h e studies made by D u g g a l (1986), Foundation for R e s e a r c h in C o m m u n i t y H e a l t h (F R C H, 1987), I n d i a n Institute of M a n a g e m e n t (IIM, 1987), O p e r a t i o n s R e s e a r c h G r o u p (ORG, 1 9 8 7 ), S u b b a R a o a n d R a v i s h a n k a r (1989) a n d W o r l d Bank (1993) a r e w o r t h m e n t i o n i n g. H e r e a g a i n, t h e r e is no c o m m o n a l i t y in t h e i r e s t i m a t e s a n d e a c h o n e of t h e m excludes o r i n c l u d e s o n e i t e m o r t h e o t h e r a n d t e n d s t o u n d e r s t a t e / o v e r s t a t e t h e size of h e a l t h c a r e expenditure. F o r example, D u g g a l (1986) h a s e x c l u d e d e x p e n d i t u r e on n u t r i t i o n a n d f a m i l y w e l f a r e a n d w a s v a g u e a b o u t t h e i n c l u s i o n of n o n - H e a l t h M i n i s t r y g o v e r n m e n t e x p e n d i t u r e s. F R C H e x c l u d e d e x p e n d i t u r e on n u t r i t i o n, w a t e r s u p p l y and s a n i t a t i o n a n d o t h e r n o n - H e a l t h M i n i s t r y p r o g r a m m e s. IIM e x c l u d e d n u t r i t i o n, w a t e r s u p p l y a n d s a n i t a t i o n, o t her n o n - H e a l t h M i n i s t r y p r o g r a m m e s a n d l o c a l g o v e r n m e n t s p e n d i n g. R a v i s h a n k a r excluded s p e n d i n g b y l o c a l g o v ernment a n d t h e o r g a n i s e d s e c t o r, but c o m b i n e d n u t r i t i o n, medical, p u b l i c h e a l t h, f a m i l y welfare, w a t e r s u p p l y a n d sanitation. O R G (1987) e x c l u d e d e x p e n d i t u r e on h e a l t h a n d h e a l t h related s c h e m e s s u c h as w a t e r supply, n u t r i t i o n, c h i l d welfare, p o l l u t i o n c o n t r o l a n d h o s p i t a l s r u n b y t h e M i n i s t r y of D e f e n c e a n d R a i l w a y s at t h e c e n t r a l l e v e l a n d s o m e 6

e x p e n d i t u r e s r e l a t i n g to Employees' State Insurance Scheme at t h e state level. W o r l d Bank (1993) excluded water supply a n d s a n i t a t i o n and o t h e r n o n - health Ministry programmes and i n c l u d e d o u t l a y s for p r e v e n t i o n, p r o m o t i o n r e h a b i l i t a t i o n and c a r e p o p u l a t i o n a c t i v i t i e s nutrition activities program f o o d a i d a n d e m e r g e n c y a i d s p e c i f i c a l l y for health in g o v e r n m e n t. T h e a v a i l a b l e e s t i m a t e s on health care spending are not d e p e n d a b l e b e c a u s e s o m e m a j o r e x p e n d i t u r e s i n c u r r e d on h e a l t h by t h e M i n i s t r i e s / D e p a r t m e n t s, such as Railways, D e f e n c e, C o m m u n i c a t i o n s, Energy, and Labour, and so on, have b e e n excluded. A m o r e r e a l i s t i c estimate has to be made (a) by d e f i n i n g h e a l t h c a r e e x p e n d i t u r e in the m o s t a c c e p t a b l e f o r m, a n d (b) by i n c l u d i n g all t h o s e i t e m s that a r e g e n u i n e l y h e a l t h i m p r o v i n g. T h i s m u s t be d o n e at least for g o v e r n m e n t e x p e n d i t u r e, so that appropriate policies can be t h o u g h t of for g o v e r n m e n t a l intervention in providing health care. In w h a t f o l l o w s an a t t e m p t is made towards that. 4. Health Care Expenditure by Government H e a l t h c a r e e x p e n d i t u r e here r e f e r s to the a mounts d e f r a y e d t o w a r d s h e a l t h care by the central, state and union t e r r i t o r y g o v e r n m e n t s a n d e x c l u d e s e x p e n d i t u r e by local b o d i e s, p u b l i c s e c t o r e n t e r p r i s e s a n d a u t o n o m o u s a n d s e m i - a u t o n o m o u s i n s t i t u t i o n s. The spending by the latter are e x c l u d e d for w a n t of r e l i a b l e data. T o be s p e c i f i c, h e a l t h c a r e e x p e n d i t u r e by g o v e r n m e n t ( c e n t r a l, s t a t e a n d u n i o n t e r r i t o r y g o v e r n m e n t s ) includes e x p e n d i t u r e s on (a) M e d i c a l a n d P u b l i c health, (b) F a m i l y w e l f a r e, (c) N u t r i t i o n, (d) W a t e r supply and Sanitation, and (e) S o c i a l s e c u r i t y a n d W e l f a r e in r e s p e c t of child and h a n d i c a p p e d care. 7

A t t h e c e n t r a l level these e x p e n d i t u r e s are spread over t w e l v e M i n i s t r i e s - (i) D e p a r t m e n t of H e a l t h & Family W elfare; (ii) M i n i s t r y of Human R e s o u r c e D e v e l o p m e n t ; (iii) D e p a r t m e n t o f W o m e n & Child D e v e l o p m e n t ; (iv) M i n i s t r y of Welfare; (v) M i n i s t r y of Food and Civil S u p p l i e s / D e p a r t m e n t of F o o d, M i n i s t r y of A g r i c u l t u r e / D e p a r t m e n t of R u r a l D e v e l o p m e n t ; (vi) M i n i s t r y of U r b a n D e v e l o p m e n t / D e p a r t m e n t of U r b a n D e v e l o p m e n t a n d H o u s i n g ; (vii) M i n i s t r y of E n v i r o n m e n t a n d Forests; (viii) M i n i s t r y of R a i l w a y s ; (ix) M i n i s t r y o f C o m m u n i c a t i o n s ; (x) M i n i s t r y of E n e r g y / D e p a r t m e n t of Coal; (xi) M i n i s t r y of L a b o u r ; and (xii) M i n i s t r y o f D e f e n c e. A n d at t h e s t a t e s ' a n d u n i o n t e r r i t o r i e s ' l e v e l they are s p r e a d o v e r t h r e e or four d e p a r t m e n t s - w i t h v a r i a t i o n s a c r o s s t h e s t a t e s and union t e r r i t o r i e s. A l l t h o s e e x p e n d i t u r e s, namely, education, e n v i r o n m e n t, p o v e r t y a l l e v i a t i o n, a n d so forth, w h i c h help i m p r o v e h e a l t h s t a t u s i n d i r e c t l y are e x c l u d e d, for the s i m p l e r e a s o n t h a t it is d i f f i c u l t to s a y w h i c h type of g o v e r n m e n t a l i n t e r v e n t i o n does not have a b e a r i n g on health s t a t u s i n d i r e c t l y. T h e m e t h o d o l o g y a d o p t e d w i t h r e g a r d to t h e e x p e n d i t u r e s u n d e r central, s t a t e a n d u n i o n t e r r i t o r y g o v e r n m e n t s is d e s c r i b e d below. Central Government a. M e d i c a l and P ublic H e a l t h. At the c e n t r a l g o v e rnment l e v e l, e x p e n d i t u r e s on m e d i c a l a n d p u b l i c h e a l t h are i n c u r r e d n o t o n l y by the M i n i s t r y of H e a l t h a n d F a m i l y W e l f a r e, b u t a l s o by o t h e r M i n i s t r i e s - R a i l w a y s, Defence, C o m m u n i c a t i o n s, E n e r g y and L a b o u r - a n d u n i o n t e r r i t o r y g o v e r n m e n t s w i t h o u t legislatures - namely, A n d a m a n & N icobar I s l a n d s, C h a n d i g a r h, Dadra & N a g a r H a v e l i, D a m a n & Diu, D e l h i a n d L a k s h a d w e e p - w h o s e d e m a n d s f o r g r a n t s are p r e s e n t e d u n d e r the M i n i s t r y of H o m e A f f a i r s. 1 T h e Ministry 1. I t may be noted th a t the number o f union t e r r i t o r i e s w ithout l e g i s l a t u r e s were not the same for a l l the fiv e y e ars as some of them were converted into union t e r r i t o r i e s with l e g i s l a t u r e s and were roughly on par with s t a t e governments. A ty p ic a l example is th a t o f Pondicherry. 8