Discuss the disparities in health spending between the Union and state governments in India. How did the COVID-19 pandemic influence health spending patterns across India?

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Introduction Health financing in India is characterised by a federal distribution of responsibilities, where states shoulder primary service delivery. This structure generates significant disparities in health spending patterns across different governments.

Disparities in Health Spending Between Union and States

1. Skewed Expenditure Share States contribute nearly two-thirds of total public health expenditure, while the Union accounts for roughly one-third. This reflects constitutional allocation but creates uneven outcomes due to varied state capacities.

2. Inter-State Variations Per capita health spending differs sharply: states like Kerala and Himachal Pradesh spend over ₹2,000 per capita, whereas some low-income states spend less than ₹1,000. This disparity translates into uneven access to human resources, primary care and infrastructure.

3. Fiscal Capacity Constraints Low tax bases and competing welfare priorities limit poorer states’ ability to scale health investment, leading to dependence on centrally sponsored schemes such as NHM and Ayushman Bharat.

4. Limited Union Flexibility Union spending remains program-driven, with a focus on vertical schemes, reducing the ability to address state-specific needs.

Impact of COVID-19 on Health Spending Patterns

1. Sharp Increase in Public Health Expenditure Both Union and states expanded spending on testing, vaccination, oxygen capacity and emergency facilities. Public health expenditure temporarily rose to around 1.8% of GDP.

2. Shift Towards Infrastructure and Preparedness Emergency allocations under PM-ABHIM, oxygen plants and digital surveillance systems strengthened long-term capacity.

3. Rise in State-Level Burden States faced higher recurrent costs—quarantine management, district-level surveillance and frontline workforce payments—widening fiscal stress.

4. Greater Central Role in Procurement Centralised vaccine procurement and emergency funding altered the usual expenditure balance, making Union spending more prominent during the crisis.

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