NIPFP Policy Brief: Public Spending on Health in Low Income States and Central Transfers

There are two factors that make additional central transfers for reinforcing health services essential: (a) while the prescription of spending 3 percent of GDP on health may be an appropriate objective for the nation as a whole, in some of the states, the requirement is substantially higher and (b) it is specifically these states where the likelihood of additional expenditure on health from their own resources is small. Ergo, if India has to make substantive progress towards meeting the MDGs in the area of health, additional central transfers targeted towards these states is a policy imperative. [NIPFP Financing Human Development Policy Brief]