ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Blended Finance in the Health Sector of India

The blended-financing vehicle created in India during the COVID-19 pandemic provided support to social initiatives in healthcare training and service delivery. The organisation and functioning of blended fi nance is complex. Thus we put forth some concerns related to its role in the Indian healthcare system.

The 2030 agenda to achieve Sustainable Development Goals (SDGs) and the impact of the COVID-19 pandemic have evoked, globally, a sharp increase in interest in the issue of how the health sector should be financed. The financing gap for the implementation of SDGs in developing economies grew to $3.9 trillion in 2021 (OECD 2022) from the pre-COVID-19 level of $2.5 trillion in 2018 (OECD 2018). The latest avatar is “blended finance” that is being looked at by several governments, including India, to scale up funds to promote sustainable health goals in a reasonable time frame. The healthcare sector comprises 30% of the blended finance portfolio, globally, in 2020 (Dembele et al 2022). It is likely to play a significant role in the evolving healthcare ecosystem of India.

Essentially, blended finance is a “structuring approach” that facilitates different public/private, national/international agencies to pool their resources in the form of loans, donor funds, equity for social enterprises and enables the ­social impact while generating returns. It aims to develop and reinforce the “emerging and frontier markets” to adv­ance progress on the SDGs. Blended fin­ance is meant for enabling scale-up of high-impact innovative solutions and can take two forms, first, as “concessionary finance” to invest in below-market return or overlooked businesses, and second, as a “grant” to support investment design as per the local context and project management with high standards of governance and transparency.

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Updated On : 6th Jul, 2023
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