Despite convergence in health spending as a share of GDP, the gap between LMICs and high-income countries has widened in absolute terms. Discuss with reference to global aid trends.

Q. Despite convergence in health spending as a share of GDP, the gap between LMICs and high-income countries has widened in absolute terms. Discuss with reference to global aid trends. (15 marks, 250-350 words)

Health spending ratios are converging: the LMIC–high-income gap in health expenditure as a share of GDP narrowed over 2000–2023. But because GDP bases differ vastly, a similar percentage buys radically unequal care — the per-capita gap has widened more than three-fold, leaving many LMICs at roughly half the minimum per-capita benchmark for universal health coverage [1].

Why ratios converge but rupees do not - A percentage point of GDP in a low-income economy translates into a fraction of the dollars it yields in a rich one; convergence in ratios masks divergence in absolute resources. - WHO data show low-income populations spending under US$50 per person annually against roughly US$4,000 in high-income countries [1]. - India illustrates the effort: Government Health Expenditure rose from 1.13% of GDP (2014-15) to 1.84% (2021-22) [2], yet remains below the NHP 2017 target of 2.5–3%.

Global aid trends deepening the divergence - Development Assistance for Health peaked during COVID-19 and has since reversed; the US, historically over one-third of DAH, announced deep foreign-aid cuts in 2025, with the UK, France and Germany following [3]. - OECD projects net ODA falling 9–17% in 2025 after a 9% fall in 2024, with health funding possibly down up to 60% from its 2022 peak [3]. - Poorest regions absorb the sharpest cuts — bilateral ODA to LDCs may fall 13–25%, to Sub-Saharan Africa 16–28% [3]. - Concentrated donor dependence (a handful of donors fund most of WHO's budget) adds institutional fragility [3].

Way forward - Spend more: domestic resource mobilisation through tax-financed health budgets, as India's rising government share of total health expenditure (29% to 48%, FY15–FY22) shows [4]. - Spend better: allocative efficiency, primary-care-first investment, plugging leakages.

Convergence in ratios is progress, not parity. Sustainable financing must therefore rest on predictable domestic revenues supplemented — not substituted — by aid, with efficiency reforms stretching every rupee. This dual track of spending more and spending better is the surest route to SDG-3's universal health coverage promise.

(~330 words)

Sources: 1. New WHO report reveals governments deprioritizing health spending (WHO, Dec 2024) — LMIC–HIC per-capita spending disparity and under-funding of UHC 2. National Health Accounts Estimates for India 2020-21 and 2021-22, MoHFW/PIB — GHE rising from 1.13% to 1.84% of GDP 3. Cuts in Official Development Assistance, OECD Policy Brief, June 2025 — 9–17% ODA fall, up to 60% drop in health funding, LDC and Sub-Saharan impact, donor concentration 4. Economic Survey 2024-25, PIB release on health expenditure — government share in total health expenditure rising to 48% by FY22