Financing National Health Programs in India: MSH Helps Uncover the Gaps and Chart a Way Forward 

Over the last 20 years, India has achieved major health gains: life expectancy has increased, infant and maternal mortality has declined, and fertility rates have dropped. This progress has been facilitated by targeted national and state policies, including India’s National Health Policy 2017, which laid out a bold agenda to accelerate progress toward universal health coverage (UHC). Despite this progress, many of India’s health indicators still lag behind peer countries. As underscored by the 15th Finance Commission, meeting national and global health targets, including the Sustainable Development Goals, will require significant, sustained investment and stronger alignment between financing and program goals.   

To support evidence-based decision-making in this critical journey, Management Sciences for Health (MSH) partnered with India’s National Health Systems Resource Centre (NHSRC) to identify and quantify the financing gaps in five of India’s priority national health programs. 

The findings, published in the report “Financial Gap Analysis of 5 National Health Programmes,” reveal differences between current funding allocations and the normative—or “ideal”—costs needed to reach target coverage levels in five key program areas: Non-Communicable Diseases (NCDs), Tuberculosis (TB), Vector-Borne Diseases (VBDs), Mental Health, and Trauma and Burns. 

MSH’s Design and Approach: Turning Data into Action 

At the core of this analysis is MSH’s Program Costing, Analysis, and Planning (Pro-CAP) tool—an adaptation of the Primary Health Care Costing, Analysis, and Planning (PHC-CAP) tool. These tools allow countries to systematically assess the gap between current public health expenditures and the resources truly required to meet health coverage goals. 

Here’s how MSH helped shape the study and drive its success: 

1. Pioneering a Hybrid Costing Methodology 

MSH introduced a hybrid costing approach, combining top-down (budgetary) and bottom-up (facility-level) costing.  The top-down component assessed current budget allocations from both the Union and State governments for the five programs. Using data on program effectiveness and service coverage, the team established current coverage levels and defined target coverage levels aligned with national health goals and timelines. This comparison allowed the identification of financial gaps—between the current funding allocations and what would be needed to meet the short-term programmatic targets and India’s longer-term vision for UHC. 

2. Anchoring Analysis in Standard Treatment Protocols 

The costing model relied on Global Standard Treatment Protocols (STPs), adopted by NHSRC and MSH in line with national clinical guidelines. These protocols provided realistic estimates for the cost of delivering effective care for conditions such as diabetes, hypertension, TB, and mental health disorders. 

3. Harnessing National Data Sources 

The team synthesized data from Union and State health budgets, the National Sample Survey Office (NSSO), and Pradhan Mantri Jan Arogya Yojana (PMJAY) package rates. By harmonizing these data sources, the study produced evidence-based, credible estimates to inform budgeting and resource mobilization. 

4. Promoting Equity and Efficiency 

Beyond quantifying funding shortfalls, the findings emphasized the importance of allocating resources equitably and investing efficiently. The model supports smarter spending by prioritizing high-burden diseases and underserved populations—ensuring each rupee delivers maximum health impact. 

5. Providing a Roadmap for Policymakers on National Health Budgets 

The analysis provides a practical tool for health planning. It allows policymakers at national and state levels to visualize investment needs over time and adjust health financing strategies to meet coverage targets, all within an adaptable, evidence-based framework. 

What the Numbers Reveal 

The financial gap analysis uncovered the following shortfalls across the five national health programs: 

Cost estimates for five priority programs (INR Crores)
Priority areas	Additional resources required
Non-Communicable Diseases	₹69,768 Cr
Tuberculosis	₹10,686 Cr
Vector-Borne Diseases	₹8,294 Cr
Mental Health	₹6,683 Cr
Trauma & Burns	₹8,665 Cr
Total	₹104,097 Cr

These numbers reflect the additional public resources required to deliver care at scale and quality—based on national coverage targets and service delivery norms.  

Charting a Path Toward a Healthier India 

This analysis represents more than a technical exercise. It provides Indian health authorities with an actionable framework for strategic investment, equity-focused planning, and adaptive budgeting—all essential to achieving UHC. With decades of experience in health financing and systems strengthening, MSH is proud to support Indian health authorities in making informed, strategic decisions which will allow policymakers to adjust and achieve targets as needed for each program. 

Learn about MSH’s work in health financing here.