Financial Outlay for Health in India’s Five-Year Plans

India’s journey toward building a robust healthcare system has been closely tied to its national development planning since independence. The Five-Year Plans, implemented from 1951 to 2017, served as the foundation for allocating public resources to various sectors, including health. Understanding how financial outlays for health evolved across these plans reveals both the achievements and persistent challenges in India’s public health landscape.

The beginning: health in early Five-Year Plans 🔗

When India launched its First Five-Year Plan (1951-56), health was recognized as essential to nation-building. The first plan focused on water supply, sanitation, malaria control, and rural healthcare, with Rs. 140 crore allocated for health. This represented approximately 2.7% of the total plan outlay. Primary Health Centers (PHCs) were established during this period, laying the groundwork for India’s public health infrastructure.

The Second Five-Year Plan continued building on this foundation, though health infrastructure remained concentrated in urban areas. By the end of the second plan, there was only one Primary Health Unit per 140,000 rural population-far below the recommendations of the Bhore Committee. In contrast, urban areas enjoyed significantly better hospital-to-population ratios.

Third and Fourth Plans: expanding medical education 🔗

The Third Five-Year Plan (1961-66) aimed at controlling communicable diseases and expanding healthcare training. Nation-wide control campaigns were initiated against smallpox and tuberculosis, and the expenditure toward the health sector was Rs. 251 crore, representing 2.9% of the total budget. The Fourth Plan (1969-74) continued these approaches while giving separate allocations to water supply and sanitation under housing and regional development.

The Fifth Plan: recognizing rural-urban disparities 🔗

The Fifth Five-Year Plan was a landmark as it acknowledged the widening gap between rural and urban areas regarding health indicators. It focused on making health services accessible in rural areas through the Minimum Needs Programme. However, safe drinking water and sanitation remained inadequate in most areas, leading to continued prevalence of water-borne diseases like diarrhoea, cholera, and typhoid.

Sixth Plan: influence of global declarations 🔗

The Sixth Five-Year Plan (1980-85) was shaped by the international declaration “Health for All by 2000 AD” from the Alma Ata Declaration of 1978. The total investment in the health sector during this plan was Rs. 3,412.2 crore. In 1983, India adopted its first National Health Policy, which aimed to achieve universal healthcare that was affordable and responsive to people’s needs. By this time, health allocation had risen to approximately 3.9% of the plan outlay.

Seventh Plan: a detailed breakdown 🔗

The Seventh Five-Year Plan (1985-90) provided a more detailed breakdown of health-related expenditure. According to plan documents, out of the total health outlay, approximately 22.8% went to total health services, 21.8% to family planning programmes, 11.7% to nutrition initiatives, and 43.7% to water supply and sanitation. The core objective of health policy in the seventh plan was laid on preventive and promotive aspects and organizing effective, comprehensive health services that were widely accessible and affordable.

The persistent problem: urban bias in health spending 🔗

Despite increasing allocations, a significant urban bias continued to characterize India’s health expenditure. A greater proportion of resources were directed towards urban-based services and higher-level care, with 29.2% of public expenditure allocated to urban allopathic services compared to only 11.8% for rural allopathic services. This imbalance was further compounded by the private sector’s preference for curative services in wealthier urban areas.

Approximately 75% of health infrastructure and resources are concentrated in urban areas, where only 27% of the population resides. This disparity has meant that rural populations, who make up the majority of India’s citizens, have historically had limited access to quality healthcare services.

Impact on rural communities 🔗

The consequences of this urban bias have been significant. Rural areas experience higher rates of infant mortality and malnutrition, lower immunization rates, and reduced access to healthcare services. In rural Madhya Pradesh, there was one physician per 7,870 people, while urban areas had one physician per 834 people. Women in rural areas particularly suffer from limited access to maternal and reproductive care.

Eighth to Twelfth Plans: course correction efforts 🔗

The Eighth Five-Year Plan (1992-97) listed health and population control as priority objectives, emphasizing safe drinking water and primary healthcare facilities. The total outlay for the health sector during this period was Rs. 14,082.2 crore.

The Ninth Plan (1997-2002) attempted to address rural-urban disparities by evolving state-specific strategies and integrating medical education with health services. It also emphasized provision of PHCs in urban slums and improvement of disease surveillance. A sum of Rs. 20,402 crore was allotted for the health sector, representing 3.72% of the total ninth plan budget.

National Rural Health Mission 🔗

A major turning point came with the launch of the National Rural Health Mission (NRHM) in 2005 during the Eleventh Plan period. Funding for rural healthcare services tripled from 100 billion rupees in 2005-06 to 304 billion rupees in 2011-12, with the goal of strengthening and improving healthcare delivery in underserved areas.

The Twelfth Five-Year Plan (2012-17) set ambitious targets including reducing maternal mortality, infant mortality, and underweight children. Health sector expenditure increased from 0.94% of GDP in the tenth plan to 1.04% in the eleventh plan, with goals to reach 2.5% of GDP by the end of the twelfth plan period.

Current status: progress and persistent challenges 🔗

India has made notable progress in recent years. The share of primary healthcare in current government health expenditure increased from 51.3% in 2014-15 to 55.9% in 2019-20, aligning with the National Health Policy 2017’s emphasis on strengthening primary healthcare.

The Ayushman Bharat programme, launched in 2018, represents a significant expansion of health coverage. This government-funded health insurance scheme provides coverage of up to Rs. 5 lakh per family per year for secondary and tertiary care hospitalization to vulnerable populations.

The gap between targets and reality 🔗

Despite these initiatives, challenges remain. Public health expenditure increased from 0.9% to 1.6% of GDP between 2017 and 2022, which remains below the National Health Policy 2017 target of 2.5%. High out-of-pocket expenditure continues to be a barrier to universal health coverage, and there is a marked disparity in the quality and accessibility of healthcare services between urban and rural areas.

In 2018-19, only 4.8% of general government expenditure was allocated towards healthcare, which was significantly lower than countries like Malaysia (8.5%), Brazil (10.5%), and developed economies like the UK (19.7%) and Germany (20.1%).

Looking ahead: the path forward 🔗

The transition from Five-Year Plans to NITI Aayog’s more flexible framework in 2017 marks a new chapter in India’s health planning. Addressing the historical urban bias requires continued investment in primary healthcare infrastructure, training of healthcare workers for rural areas, and innovative delivery models that can reach underserved populations.

The lessons from India’s planning experience are clear: while absolute allocations have increased substantially over the decades, the proportion of resources dedicated to health relative to overall development spending and GDP remains a critical challenge. Achieving truly universal health coverage will require not just increased funding, but strategic reallocation toward preventive care, primary healthcare, and rural health services.

What do you think? How can India balance the need for advanced tertiary care in urban centers with the urgent requirement for basic healthcare in rural areas? What role should state governments play in addressing regional health disparities?

References

1. https://www.slideshare.net/RAJNISHkumar588/health-in-five-year-plan-in-india
2. https://pmc.ncbi.nlm.nih.gov/articles/PMC7122919/
3. https://pmc.ncbi.nlm.nih.gov/articles/PMC3093249/
4. https://ballardbrief.byu.edu/issue-briefs/healthcare-access-in-rural-communities-in-india
5. https://en.wikipedia.org/wiki/Healthcare_in_India
6. https://www.researchgate.net/publication/327238255_The_five_year_plans_in_India_Overview_of_Public_Health_Policies
7. https://pmc.ncbi.nlm.nih.gov/articles/PMC3730274/
8. https://en.wikipedia.org/wiki/Twelfth_Five_Year_Plan_(India)
9. https://pmc.ncbi.nlm.nih.gov/articles/PMC11142006/
10. https://pmc.ncbi.nlm.nih.gov/articles/PMC10292032/
11. https://pmc.ncbi.nlm.nih.gov/articles/PMC11633271/
12. https://prsindia.org/budgets/parliament/demand-for-grants-2023-24-analysis-health-and-family-welfare