India's health system was designed in a different era, when expectations of the public and private sectors were quite different. India's population is also undergoing transitions in the demographic, epidemiologic and social aspects of health. Disparities in life expectancy, disease, access to health care and protection from financial risks have increased. These factors are challenging the health system to respond in new ways. The old approach to national health policies and programmes is increasingly inappropriate. By analyzing inter- and intra-state differences in contexts and processes, we argue that the content of national health policy needs to be more diverse and accommodating to specific states and districts. More 'splitting' of India's health policy at the state level would better address their health problems, and would open the way to innovation and local accountability. States further along the health transition would be able to develop policies to deal with the emerging epidemic of non-communicable diseases and more appropriate health financing systems. States early in the transition would need to focus on improving the quality and access of essential public health services, and empowering communities to take more ownership. Better 'lumping' of policy issues at the central level is also needed, but not in ways that have been done in the past. The central government needs to focus on overcoming the large inequalities in health outcomes across India, tackle growing challenges to health such as the HIV epidemic, and provide the much needed leadership on systemic issues such as the development of systems for quality assurance and regulation of the private sector. It also needs to support and facilitate states and districts to develop critical capacities rather than directly manage programmes. As India develops a more diverse set of state health policies, there will be more opportunities to learn what works in different policy environments.
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