Patterns of public health expenditure in India: Analysis of state and central health budgets in pre and post National Rural Health Mission period - Gautam Chakraborty

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  • 1. Patterns of Public Health Expenditures in India : Analysis of State and Central Health Budgets in pre and post-NRHM period Gautam Chakraborty (Advisor – Healthcare Financing) Arun B Nair (Consultant – Health Economist) National Health Systems Resource Centre (NHSRC) National Rural Health Mission (NRHM) Ministry of Health & Family Welfare Government of India
  • 2. Public Financing of Health: Goals…
    • National Health Policy (2002)
      • Increase Health Expenditure by Govt. as % of GDP from the existing 0.9% to 2.0% by 2010.
      • Increase share of Central grants to constitute at least 25% of total health spending by 2010.
      • Increase State Sector Health spending from 5.5% to 7% of the budget by 2005 (and further increase to 8% by 2010).
    • National Rural Health Mission (2005)
      • “… Government to raise public spending on Health from 0.9% of GDP to 2-3% of GDP.”
      • “ The States are expected to raise their contribution to Public Health Budget by minimum 10% p.a. …”
  • 3. Structure of Health Budget PLAN NON PLAN CENTRALLY SPONSORED SCHEMES State Funds EXTERNALLY AIDED PROJECTS REVENUE EXPENDITURE CAPITAL EXPENDITURE LOAN ACCOUNT EXPENDITURE “ SOCIETY” ROUTE (NRHM & RCH-II Flexi-pools; NACP-III) 2210 2211 4210 4211 6210 6211 “ TREASURY” ROUTE
  • 4.
    • Line-item budget (lack of flexibility)
    • “ Doctrine of Lapse”
    • DDO (limits of financial powers)
    • Separation of Expenditure with Authorization & Payment
    Treasury Route: Challenges 11/30/2010 NHSRC (Gautam Chakraborty)
  • 5.
    • Off-budget transactions (issue of accountability and transparency)
    • Merger of Expenditure with Authorization & Payment
    • This needs:
    • Accountability – more active participation of non-government members in the “Society”
    • Transparency – Concurrent Audits, FMRs in public domain (along with HMIS)
    Society Route 11/30/2010 NHSRC (Gautam Chakraborty)
  • 6. Inter-State Analysis of Health Budget
  • 7. Central Health Budget
  • 8. State Health Budget
  • 9. Growth Rates of State Health Expenditure
  • 10. Growth Rate of State Budget Expenditure YEAR 2000-01 TO 2007-08 2000-01 TO 2004-05 2005-06 TO 2007-08 Andhra Pradesh 7.8 2.4 14.2 Assam 15.2 3.4 35.6 Bihar 3.6 -9.2 9.1 Chhattisgarh 26.3 27.7 22.3 Gujarat 4.5 1.1 7.1 Haryana 8.5 5.5 7.8 Jharkhand 12.5 3.1 -0.3 Karnataka 8.0 0.8 16.9 Kerala 9.3 5.8 12.5 Madhya Pradesh 5.3 0.8 9.6 Maharashtra 7.6 3.9 10.1 Orissa 8.1 6.4 20.9 Punjab 3.7 -1.0 6.8 Rajasthan 7.1 3.6 9.3 Tamil Nadu 7.1 2.6 8.3 Uttar Pradesh 14.5 8.7 13.8 West Bengal 4.2 -1.2 9.5 All States 8.4 3.9 12.0
  • 11. Growth Rate of Capital Expenditure YEAR 2000-01 TO 2007-08 2000-01 TO 2004-05 2005-06 TO 2007-08 Andhra Pradesh 2.4 -23.0 76.8 Assam -15.1 5.7 -48.1 Bihar 3.2 12.0 -1.2 Chhattisgarh 53.1 58.7 43.9 Goa 19.6 11.5 7.7 Gujarat 14.9 1.0 38.1 Haryana 23.8 8.8 33.8 Jharkhand 35.1 23.9 42.6 Karnataka 10.7 11.8 -12.9 Kerala 20.6 7.3 29.0 Madhya Pradesh 20.6 7.3 29.0 Maharashtra 11.3 17.5 2.0 Orissa -0.3 -40.3 14.3 Punjab 34.8 15.8 87.8 Rajasthan 17.2 3.1 14.1 Tamil Nadu 24.2 11.5 -9.2 Uttar Pradesh 39.8 29.9 30.6 West Bengal 2.5 -14.2 22.7 All States 20.6 9.2 26.4
  • 12. Utilization of State Health Budgets - Revenue Budget for All States   Budgetary Allocation Expenditure Expenditure against BE Year Plan Non-Plan Total Plan Non-Plan Total Plan Non-Plan Total 2001-02 580734 1158995 1739729 569354 1021032 1590386 98.0 88.1 91.4 2002-03 574250 1229544 1803794 445706 1188433 1634138 77.6 96.7 90.6 2003-04 612482 1277234 1889716 476471 1240646 1717116 77.8 97.1 90.9 2004-05 615964 1352247 1968210 520495 1325118 1845613 84.5 98.0 93.8 2005-06 711486 1544442 2256076 531541 1499013 2030554 74.7 97.1 90.0 2006-07 748863 1828648 2577512 574739 1645766 2220505 76.7 90.0 86.1 2007-08 752725 2012141 2764866 758091 2017951 2776043 100.7 100.3 100.4                     Utilization of State Health Budgets - Capital Budget for All States Year Budgetary Allocation Expenditure Expenditure against BE Plan Non-Plan Total Plan Non-Plan Total Plan Non-Plan Total 2001-02 176974 522 177496 70318 1976 72294 39.7 378.5 40.7 2002-03 98994 465 99459 74822 399 75221 75.6 85.8 75.6 2003-04 123594 205 123799 106125 291 106416 85.9 142.0 86.0 2004-05 127745 828 128573 113309 2763 116072 88.7 333.7 90.3 2005-06 209499 1386 210884 172169 398 172567 82.2 28.7 81.8 2006-07 316819 2675 319494 314906 2061 316967 99.4 77.0 99.2 2007-08 360648 2785 363433 377910 2738 380648 104.8 98.3 104.7
  • 13. Fund Flow under NRHM
  • 14. Expenditure Under NRHM
  • 15. Fund Flow under RCH Flexi Pool
  • 16. Fund Flow under Mission Flexi-pool
  • 17. Peculiar problem under Mission Flexi-pool
    • Complete grant under Mission Flexible Pool is treated as Recurring Grant (for which UC is due immediately after close of FY). This does not take into cognizance:
      • 7 tier structure of fund flow: Centre  State  District  Block (CHC)  PHC  Sub-Centre  VHSC.
      • Annual committed grants ( Untied Grants, AMG & Corpus Grants to RKS) to VHSC, SC, PHC, CHC & Distt. Hospitals which are to be used over the whole year.
      • Civil work component under which funds are advanced to PWD, etc..
      • Procurement component under which funds are advanced to procurement agencies.
  • 18. Bottle-necks in absorbing funds
    • High expenditure cycle (civil works, procurement)
    • Lack of preparation for expenditure (trainings, social protection schemes)
    • Average advances outstanding
    • Average cash reserves
    • Limits in financial decentralization
    • Skills of book keeping and accounting
    • Penetration of banking and e-commerce
  • 19. Public Health Financing: the way forward
    • Shift from line-item budgeting to block budgeting/grants, especially at facility level
    • Creating 2 channels of funding – (i) for items with expenditure cycle below 1-month, (ii) for items with expenditure cycle 3-months and above
    • “ Purchasing” of care even within public health system
    • Differential Financing (by levels, facilities, patients / beneficiaries)
    • Creation of “District Health Funds” for innovations and other needs
    • Shifting focus of audits from “compliance to guidelines” to transparency and accountability
  • 20. THANK YOU