Government to increase health expenditure to 2.5 per cent of GDP

The central government is planning to increase the total expenditure on health to the level of 2.5 per cent of GDP by the end of the 12th five-year Plan, which is from 2012 to 2017.
The total expenditure on health is at 1.4 per cent of the national GDP at present. Prime Minister Manmohan Singh headed a high level meeting in which it was decided that the Planning Commission of India will be asked to make available adequate resources for the health sector in order to achieve the new target.
The Planning Commission can also ask for assistance from the states for providing required resources to the sector to improve the quality of the services and enahce the overall well being of the population.
It was also recommended in meeting held at the PMO that the Planning Commission can prepare an appropriate mechanism in consultation with the Health Ministry to encourage states to allocate more resources to the health sector.
The Prime Minister said, that "though funds for the Health sector will not be a constraint, there is a need to create adequate capacity at the Centre and the states to meaningfully absorb the increased outlay."
It was also decided in the meeting that the Health Ministry can establish a Central Procurement Agency for providing 'free medicine for all through public health facilities' under the National Rural Health Mission (NRHM). The Health Ministry, which is also working on its goal of Universal Health Care, has been asked to set up Standard Treatment Protocols earlier to improve the quality of health services in the country.
The implementation of recommendations of the National Commission for Macroeconomics & Health (NCMH) and the High Level Expert Group (HLEG) on Health set up by Planning Commission was also discussed in the meeting.