New Delhi: The Centre has ordered a cut of nearly 20 per cent in its healthcare budget due to fiscal strains, putting at risk key disease control initiatives in a country whose public spending on health is already among the lowest in the world. Two health ministry officials said on Tuesday that more than Rs 6,000, or $948 million, had been slashed from their budget allocation of around Rs 31,756 crore, or $5 billion, for the financial year ending on March 31.

Despite rapid economic growth over the past two decades, successive governments have kept a tight rein on healthcare expenditure. India spends about 1 per cent of its gross domestic product on public health, compared to 3 percent in China and 8.3 per cent in the US.

“We were not expecting (budget cuts) this time because of the commitments they made in the manifesto,” one of the health ministry officials said, referring to the BJP. “No reason was given ... but there is shortage of funds. It is not rocket science.” The officials requested anonymity because of the sensitivity of the matter. The finance ministry, which ordered the spending reduction and overruled objections from the health ministry at a recent meeting, did not respond immediately to requests for comment.The move reflects the government's struggle to achieve its 2014/15 fiscal deficit target of 4.1 percent of GDP.

Dominated by private players, India’s healthcare industry is growing at about 15 per cent, but public spending has remained low and resulted in a dilapidated network of government hospitals and clinics, especially in rural areas.

One of the health ministry officials said the cut could crimp efforts to control the spread of diseases. More newborns die in India than in poorer neighbours such as Bangladesh, and preventable illnesses such as diarrhoea kill more than a million children every year. The retrenchment could also derail an ambitious universal healthcare programme that Prime Minister Narendra Modi wants to launch in April. The plan aims to provide all citizens with free drugs and diagnostic treatments, as well as insurance benefits.

The cost of that programme over the next four years had been estimated at $25 billion. The health ministry officials had been expecting a jump in their budget for the coming year, in part to pay for this extra cost.