We need to prioritise public health allocations and reduce budgetary inefficiencies
Health systems in India have been perennially suffering from challenges related to insufficient public health spending. However, the recently released budgetary estimates of the Department of Health and Family Welfare (DOHFW)—under the ministry of health and family welfare—exhibit a significant leap in government allocations earmarked for this sector. In fact, the aggregate DOHFW budget allocation for the current financial year stands at Rs 37,061.55 crore.
Given that DOHFW allocations underwent a serious cutback—from Rs 35,163 crore in 2014-15 to Rs 29,653 crore in 2015-16—the 25% hike is indeed laudable and calls for a more in-depth analysis of the DOHFW budget. The analysis is also well-timed as the 12th Five-Year Plan (2012-17) is only a few months away from culmination.
Financial estimates of DOHFW do bring to the fore some intriguing yet consistent characteristics. To begin with, let us consider some of the most promising centrally-sponsored schemes under the National Health Mission (NHM) and the National Rural Health Mission (NRHM).
While the approved outlay (budgeted estimate—BE) for ‘NRHM-RCH Flexible Pool’ in 2014-15 was Rs 13,010.21 crore, the revised estimate (RE) stood at Rs 10,001.28 crore—marking a sharp decline of 23% from originally sanctioned outlays. Likewise, the BE under ‘Flexible Pool for Non-Communicable Diseases, Injury and Trauma’ in 2014-15 was Rs 650 crore. The RE, on the other hand, was cut down by 20% to Rs 514.5 crore and the resultant annual expenditure eventually stood at Rs 476.85 crore—7% short of the RE! In 2015-16 as well, while the approved outlay for the non-communicable disease pool was Rs 554.5 crore, the approved finances got reduced by 22% at the RE stage and the expenditure until December 2015 stood at Rs 277.11 crore—only 64% of the RE.
A similar phenomenon can be observed for almost all centrally-sponsored programmes under the NHM and non-NHM heads of the DOHFW budget. The NHM approved outlay under the National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) in 2014-15, for instance, was Rs 292.55 crore. However, while the RE for NPCDCS got slashed to Rs 235 crore, only Rs 217.27 crore could actually be spent.
Under the non-NHM head, too, the approved finances for NPCDCS got reduced from Rs 680 crore to Rs 360 crore (RE) and Rs 7.9 crore was ultimately left unutilised. Interestingly, on April 24, 2015, the Department-Related Parliamentary Standing Committee on Health and Family Welfare, in its ‘demand for grants’ report to the Rajya Sabha, expressed serious concern with the ‘utilisation figures’ and reiterated that they ‘do not do justice’ to the objective of NPCDCS.
While low public allocation to health and inefficient/unutilised expenditures are major problems, another crucial issue is that of inappropriate prioritisation. In the light of impending epidemiological transition that India is experiencing, reorientation in existing health budgets is urgently required. Over the decades, the burden of premature mortality in India has shifted from child (0-5 years) to adult (30-69 years) level, so much so that 65% of premature deaths happened at the adult level and 22% at the child level during 2010-15. Health budgets, however, have continued to focus on reduction in premature mortality at the child level.
In the current DOHFW budget, for instance, while the ‘NRHM-RCH Flexible Pool’ has been allocated 58.6% of total NHM outlays, the approved outlay for the non-communicable disease flexible pool is only 3%. Given that 58% or 3.4 million non-communicable disease-related deaths were premature in our country in 2012—the highest worldwide—it’s time for health budgets to realign allocations by taking into account respective disease burdens.
This is critical from the perspective of not only preventing premature mortality due to non-communicable diseases, but also to avert significant potential loss of human capital, productivity and economic growth.
Implications for households are, of course, overwhelming as most non-communicable disease-related expenses are financed through either incomes or savings, thereby inhibiting the ability of households to save for or invest in productive capital accumulation.
Needless to emphasise, if inadequate prioritisation and budgetary inefficiencies continue to afflict our health systems, even larger public health allocations would not be quite favourable from the perspective of tackling non-communicable diseases. In fact, prioritisation of public health allocations and reduction in budgetary inefficiencies are issues that merit utmost attention from policy-makers.
Institutional capacity-building in terms of governance norms, technical capacity, manpower/skill development, public health infrastructure, etc, should be undertaken from this perspective to ensure that epidemiological transition and associated economic burden are adequately addressed. The need of the hour is to curb the crisis from escalating, before it knocks us down.
Divya Chaudhry is research assistant and Ali Mehdi is fellow with the Health Policy Initiative at ICRIER, New Delhi