India is poised to raise its public health spending by 11 percent in the annual budget next month, after rejecting the health minister’s demand for a much bigger increase to ramp up disease control.

The health budget is expected to rise by 11 percent to $8.2 billion. Prime Minister Narendra Modi’s government last year set a target of raising annual health spending to 2.5 per cent of India’s GDP by 2025, from 1.15 per cent now – one of the lowest proportions in the world. The budget for the financial year ending March 2019 will be presented on Feb. 1.

Last year, the government intensified efforts to restructure the public healthcare system. It capped prices of several medical devices to help the poor, ramped up screening of non-communicable diseases and, on top of that, also raised the federal health budget by more than a quarter.

But the health budget increase for 2018-19 is expected to be lower as the government’s finances are stretched by slowing economic growth and tax collections that have lagged under a new sales tax regime. Collections under the new national goods and services tax system stood at $12.6 billion in November, the lowest since its launch in July

India’s overburdened health system remains plagued with an acute shortage of government hospitals in rural areas. In 2016, more than 1 million children died before turning five, the highest number for any nation in the world, a United Nations report said last year.


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