Will India see a much-needed increase in health funding in 2017?

Abysmal spending on health had “impinged” upon the effective delivery of health care services to the people, a Rajya Sabha Standing Committee has said in a recent report. The committee has called for the health department to make a strong case for more health funding to the Finance Ministry before it finalises the union budget for the coming year.

Th standing committee’s action taken report on health budget allocations recommendations made in April was released on December 14, in which it has asked for the health department to provide a roadmap to reverse the trend of low budgetary allocations to the health sector. The new recommendations were made a little more than a month before the Finance Minister Arun Jaitley presents the Union budget on February 1.

In the April report, the committee led by Samajwadi Party MP Ramgopal Yadav had called noted that the total budget allocation for health stands to just 1.2% of total GDP. India has one of the sparsest health budgets in the world, lower than Nepal, Sri Lanka, and many other developing countries.

As per the 12th Five-Year Plan for the years between 2012 and 2017, the Planning Commission had approved raising government expenditure to 2.5% of the GDP, which entails a massive 147% rise in public health expenditure. Currently the total budget allocation in five years works out to what the committee calls a “measly 46.5%”.

“The committee has taken the view that the financial allocation for the health department were grossly underfinanced,” said Ravi Duggal, country coordinator for the International Budget Partnership that networks with organisations working on public budgeting.

Government’s response

In reply to the committee, the government has stated that public health expenditure is based on “availability of financial resources” and it has to keep in mind the competing demands on the resources of the government and the “absorptive capacity” of the health sector – that is the capacity to effectively and efficiently spend the funds.

Health department officials said that the observations of the Parliamentary Standing Committee has been communicated to the finance department that makes budgetary allocations.

The committee also took note of the 2,423 pending utilisation certificates, which are essentially expenditure statements, for various grants given by the health department to the states. The utilisation certificates amount to Rs 3,186.88 crores and have been pending since 2005. Non-submission of the utilisation reports indicates lack of monitoring of corresponding projects and could also hamper the further release of funds to these projects. The government has stated that it has, from time to time, requested states to submit their utilisation reports and a team has visited some of the states to ensure effective implementation.

State spending on health

In 2015-’16, the share of the tax pool from the states had increased from 32% to 42%, as per the 14th Finance Commission’s recommendation. The Centre had cited the rise in the state tax pool for cutting Union health expenditure. The states, however, had not increased their health budgets correspondingly , the committee said in April.

The government had tried to address reduction in allocation of funds to the National Health Mission by imposing a condition requiring the states to raise their own share in healthcare spending by 15%.

“This is where the centre has passed on the buck to the states,” said Duggal. “There is something more that the governments should do in terms of pushing the state.”

The information provided by the government showed that, out of 36 states and union territories, 22 had increased their health budgets by 10% or more in comparison to the financial year 2015-’16. However, states such as Chandigarh, Daman and Diu, Karnataka, Maharashtra, Manipur and Sikkim had not shown any increase in their health budgets but have, in fact, shown a “negative trend” or a reduced increase in the budget.

The committee has recommended the union health department to keep a close watch on the states and also ensure the allocated funds get spent.

Laboratory capacity

The committee asked the government to increase laboratory capacity at district level to improve the quality of laboratory-based data for disease surveillance and disease outbreak investigations. Currently only 111 out of the envisaged 300 laboratories are functional.

The committee has also cautioned the government about its national polio programme. In April 2016, the government introduced the Inactivated Polio Vaccine programme and also planned to phase out the Oral Polio Vaccine. The department pointed to a global shortage of the new vaccine and how domestic manufacturers had not been able to fulfill the government’s requirement. The committee cautioned the department to “maintain strict surveillance” with respect to domestic production of the new vaccine as its shortage would jeopardise the hard earned success in elimination of polio in the country.

The committee has accepted some of the actions taken by the government. Addressing the steady increase of shortfall of doctors in the rural sector, the government has decided to reserve 50% of sears in post-graduate diploma courses for people who have served for more than three years in remote areas. Each year of service in a remote area will also account as 10% marks in entrance tests of post-graduate courses.

It also accepted the government’s efforts to boost immunisation rates and family planning, among other programmes. “Most of the work the centre has done were anyway under process, and not very radical,” said Duggal.