Public health expenditure in India has declined from 1.3% of GDP in 1990 to 0.9% of GDP in 1999. The Union Budgetary allocation for health is 1.3% while the State’s Budgetary allocation is 5.5%.

Union Government contribution to public health expenditure is 15% while States contribution about 85%

Vertical Health and Family Welfare Programmes have limited synergisation at operational levels.

Lack of community ownership of public health programmes impacts levels of efficiency, accountability and effectiveness.

Lack of integration of sanitation, hygiene, nutrition and drinking water issues.

There are striking regional inequalities.

Population Stabilization is still a challenge, especially in States with weak demographic indicators.

Curative services favour the non-poor: for every Re.1 spent on the poorest 20% population, Rs.3 is spent on the richest quintile.

Only 10% Indians have some form of health insurance, mostly inadequate

Hospitalized Indians spend on an average 58% of their total annual expenditure

Over 40% of hospitalized Indians borrow heavily or sell assets to cover expenses

Over 25% of hospitalized Indians fall below poverty line because of hospital expenses

The National Rural Health Mission (2005-12) seeks to provide effective healthcare to rural population throughout the country with special focus on 18 states, which have weak public health indicators and/or weak infrastructure.

These 18 States are Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu & Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttaranchal and Uttar Pradesh.

The Mission is an articulation of the commitment of the Government to raise public spending on Health from 0.9% of GDP to 2-3% of GDP.

It aims to undertake architectural correction of the health system to enable it to effectively handle increased allocations as promised under the National Common Minimum Programme and promote policies that strengthen public health management and service delivery in the country.

It has as its key components provision of a female health activist in each village; a village health plan prepared through a local team headed by the Health & Sanitation Committee of the Panchayat; strengthening of the rural hospital for effective curative care and made measurable and accountable to the community through Indian Public Health Standards (IPHS); and integration of vertical Health & Family Welfare Programmes and Funds for optimal utilization of funds and infrastructure and
strengthening delivery of primary healthcare.

It seeks to revitalize local health traditions and mainstream AYUSH into the public health system.

It aims at effective integration of health concerns with determinants of health like sanitation & hygiene, nutrition, and safe drinking water through a District Plan for Health.

It seeks decentralization of programmes for district management of health.

It seeks to address the inter-State and inter-district disparities, especially among the 18 high focus States, including unmet needs for public health infrastructure.

It shall define time-bound goals and report publicly on their progress.

It seeks to improve access of rural people, especially poor women and children, to equitable, affordable, accountable and effective primary healthcare.