Kerala's development experience has been distinguished by the primacy of th
e social sectors. Traditionally, education and health accounted for the gre
atest shares of the state government's expenditure. Health sector spending
continued to grow even after 1980 when generally the fiscal deficit in the
state budget was growing and government was looking for ways to control exp
enditure. But growth in the number of beds and institutions in the public s
ector had slowed down by the mid-1980s. From 1986-1996, growth in the priva
te sector surpassed that in the public sector by a wide margin.
Public sector spending reveals that in recent years, expansion has been lim
ited to revenue expenditure rather than capital, and salaries at the cost o
f supplies, Many developments outside health, such as growing literacy, inc
reasing household incomes and population ageing (leading to increased numbe
rs of people with chronic afflictions), probably fuelled the demand for hea
lth care already created by the increased access to health facilities. Sinc
e the government institutions could not grow in number and quality at a rat
e that would have satisfied this demand, health sector development in Keral
a after the mid-1980s has been dominated by the private sector.
Expansion in private facilities in health has been closely linked to develo
pments in the government health sector. Public institutions play by far the
dominant role in training personnel. They have also sensitized people to t
he need for timely health interventions and thus helped to create demand. A
t this point in time, the government must take the lead in quality maintena
nce and setting of standards. Current legislation, which has brought govern
ment health institutions under local govern ment control, can perhaps facil
itate this change by helping to improve standards in public institutions.