Funds no constraint, some states lack spending capacity, says JP Nadda

Union Health and Family Welfare Minister JP Nadda has identified the limited spending capacity of state governments as the biggest constraint before the Centre in providing extra funds towards public expenditure in healthcare. Stating that the Central government is keen to increase the overall public healthcare spend to 2.5% of India’s GDP from the current 1.8%, Nadda wanted the states to come up with quality public health projects that can be supported by the Centre.

“The 2017 National Health Policy talks about spending 2.5% of GDP for the health sector. We are now spending 1.8% of GDP on health. Fund is not a problem. Problem is the expenditure. The states should have the capacity to spend,” he said, while addressing the 19th edition of FICCI HEAL 2025 conference in New Delhi today.

According to Nadda, the government has given ₹86,000 crores to the States under the PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), but not all States have spend the entire money to build quality infrastructure as envisaged under the programme. "I had to talk to three states that you are not spending the money, utilisation certificates are not ready and next year your programme implementation plan is going to suffer,” Nadda said.

The minister said the Centre’s flagship health assurance programme Ayushman Bharat Health Assurance Programme or Pradhan Mantri Jan Arogya Yojana (PMJAY) has helped India reduce the out of pocket health expenditure of the citizens in a big way. “If I talk about the decline in out-of-pocket expenditure, in the past 10 years, from 62.6 %, it has come down to 39.4%. Ayushman Bharat has played a very important role in this,” he said.

Over 62 crore people, almost 40% percent of the Indian population gets ₹5 lakh health insurance coverage. Every person above the age of 70 is entitled for Ayushman coverage till death. Approximately 32, 930 empanelled hospitals are there, the minister added.

“For ensuring accessible and comprehensive healthcare, the government has established 1.7 lakh Ayushman Arogya Mandirs (AAMs) across the country, which serve as the first point of contact for citizens, thereby expanding the base of healthcare delivery,” he said. Referring to the National Family Health Survey (NFHS) data, the minister highlighted that institutional deliveries in India have risen to 89%, up from 79%, owing to the dedicated efforts of ASHA workers and frontline health personnel.

Highlighting India’s progress across key health indicators, he stated that, as per the Sample Registration System (SRS), the Maternal Mortality Ratio (MMR) has declined from 130 to 88 per lakh live births, while the Infant Mortality Rate (IMR) has reduced from 39 to 27 per thousand live births, reflecting steady progress in maternal and child health. The Under-Five Mortality Rate (U5MR) has shown a 42% decline, outpacing the global average decline of 14%, and the Neonatal Mortality Rate (NMR) has decreased by 39%, compared to a global reduction of 11%, underscoring India’s rapid gains in newborn survival, he said.