India spends only 1.5% of GDP on health as against the recommended 5% by W.H.O. for equity and universal coverage. States have a high share (89%) of funding their health care activities as against 9% by centre and 2.8% by U. T.'s. Increasing proportion of health expenditure on salaries (60-90%) and a markedly reduced (29%-5%) proportion on non-salary components is reflected in low-level of utilization of health services. Committed involvement by others in selected crucial areas is lacking. Health financing seems to be directed towards the urban sector with maximum outlays to curative care. There are high inter-state variations in health expenditure and health status. Higher share of SDF on public health does not guarantee a better health status. Health services sector urgently & legitimately needs additional resources. There is need to set up technical committee and research cells to sensitise policy makers, academicians and others and to steer and guide research. Health Financing and Management must be considered together to address issues of equity, efficiency and effectiveness in health care services.