OVER VIEW OF HEALTH FINANCING IN INDIA – NEED OF AN ALTERNATIVE FINANCING MECHANISM: REVIEW OF HEALTH FINANCING IN INDIA

India is the world’s largest parliamentary democracy and has a federal system of government with 28 States, 7 Union Territories, 640 Districts, almost 6,000 Sub districts, more than 5,000 Towns and 600,000 Villages. India is also one among the fastest growing economies of the world. The gross domestic product of the country grew by an average of 7.5 percent per year during the first eleven years of the second millennium, from the start of 2000 to the end of 2010. This gave India the world’s second fastest growing economy, after China’s (IMF, 2011). Over the past 50 years since independence India made significant achievement in terms of improvement in health. India could make progress in mortality rates, nutrition and maternal and child care. However India is still way behind many fast developing countries such as China, Vietnam and Sri Lanka in terms of many of the health indicators (Satia et al 1999). It is also important to note the vast variation in health indicators across the country from the worst cases to the best cases. States like Kerala with the best health indicators to the states like Bihar with not so good indicators in health. India is a country with one of the oldest and decentralized health care systems of the world. In case of government funded health care system, the quality and access of various health care services including primary and secondary has been an important concern. The various factors that influence the quality and access are yet to be addressed effectively in the India health care. India also piloted a number of health development schemes including many popular flagship health care programs. Health and health care need to be distinguished from each other for no better reason than that the former is often incorrectly seen as a direct function of the latter. Heath is clearly not the mere absence of disease. Good Health confers on a person or group freedom from illness - and the ability to realize one's potential. Health is therefore best understood as the indispensable basis for defining a person's sense of wellbeing. The health of populations is a distinct key issue in public policy discourse in every mature society often determining the deployment of huge society. They include its cultural understanding of ill health and well-being, extent of socio-economic disparities, reach of health services and quality and costs of care and current bio-medical understanding about health and illness. Health care covers not merely medical care but also all aspects pro preventive care too. Nor can it be limited to care rendered by or financed out of public expenditure- within the government sector alone but must include incentives and disincentives for self-care and care paid for by private citizens to get over ill health. Where, as in India, private out-of-pocket expenditure dominates the cost financing health care, the effects are bound t be regressive. Heath care at its essential core is widely recognized to be a public good. Its demand and supply cannot therefore, be left to be regulated solely by the invisible had of the market. Nor can it be established on considerations of utility maximizing conduct alone