Indian Economics

1. Group members Roll no.
1.Shruti Omar 1020095
2. Lakshay Goyal 1020067
3.Aditya Yadav 1020008
4. Anjali Diwakar 1020023
5.Gauri Gupta 1020084
6.Beauty 1020021
7.Diya Gaba 1020035
8.Nevin Joseph 1020010

2. APPENDIX -1
NATIONAL HEALTH MISSION
Aditya Yadav
Nevin Joseph
Lakshay Goyal

3. The National Health Mission (NHM) is a specific purpose grants given to the
State and Union Territories to augment their healthcare system to provide
affordable and accessible healthcare facilities to public.
It was initially started as the National Rural Health Mission (NRHM) by
consolidating various programmes on health in 2006, the programme was
expanded to address health concerns of the urban poor living in listed and
unlisted slums in 2013.
The government planned to achieve these objectives by developing primary,
secondary and tertiary health care facilities and by addressing various
issues such as food security, nutrition, safe drinking water and sanitation ,
education of children especially female children , women's rights and
empowerment, etc.
Objectives

4. The programme proposes to incentivise the States and Union territories
to undertake health sector reforms to achieve greater efficiency and
equity. It also proposes to prioritise services to address the health of
women and children, and the prevention and control of communicable
and non-communicable diseases.

5. Safeguard the health of poor , vulnerable and disadvantaged
person.
Strengthen the public healthcare system
Empowering the communities to become active participants
in achieving highest possible levels of health.
Build an environment of trust between people and service
providers
Usage of resources efficiently
The government aims to develop some core values through this
scheme which are as follows:

6. The National Rural Health Mission – Reproductive and Child Health (NRHM-RCH)
Flexible Pool which extends to further two component:
National Urban Health Mission (NUHM) provides financial assistance to effectively
address the health concerns of the urban poor living in listed and unlisted slums.
Control of Communicable Diseases
Control of non-communicable diseases and to provide financial assistance to States
to meet the challenges of controlling non-communicable diseases
Assistance for maintenance of infrastructural facilities
The scheme proposed by the govt has 5 major components:
a) Reproductive, Maternal, New-born, Child and Adolescent Services (RMNCH+A)
which is an approach to cover all the stages of the life
b) Developing heath care facilities under NRHM through development of
infrastructure, human resources, patient transport facilities, etc
Design

7. Initially, when NRHM was started it was completely funded by the Central
government.
However, during the 11th plan period (2007-08 to 2011-12) contribution of the
Central government was reduced to 85% and states were required to contribute
15%.
This ratio was again revised during the 12th plan period (2012-13 to 2014-15) and the
new ratio came out to be 75% for the center and 25% for states.
However, after the 14th Finance Commission increased the tax devolution to 42
percent (as against 32 percent by the previous Commission) of the divisible pool, the
funding pattern was changed based on the recommendation of the NITI Aayog’s
Committee of Chief Ministers convened by the Chief Minister of Madhya Pradesh to
60:40 in the case of general category States and 90:10 in the case of Special
Category States.
Finance Structure

8. For the purpose of allocation of funds to individual States, the Union Ministry of
Health and Family Welfare works out the resource envelops for the year and conveys
it. These envelopes are based on area and population weighted by the socio-economic
backwardness and health lag in the States.
Ten percent of the funds are given to the state which demonstrates that it is able to
efficiently absorb the funds provided as seen from the progress in key areas of
institutional reform identified in the MOU.
For the NRHM –RCH Flexible pool, population weights for States are predetermined
which are as follows:
The large Empowered Action Group (EAG) States (Madhya Pradesh, Bihar,
Rajasthan and Odisha) are assigned the weight of 1.3.
The two EAG States of Jharkhand and Chhattisgarh are assigned the weight of 1.5.
The eight north-eastern states including Sikkim are assigned the weight of 3.2 and
the small Union Territories (excluding Delhi and Pondicherry) are assigned the
weight of 3
the remaining states are given the weight of 1.

9. The allocation for NUHM is done on the basis of urban population and slum
population by giving 50 percent weightage to each of the two factors
Based on the resource envelop communicated to them the states are required to
prepare their annual Programme Implementation Plans (PIPs) based on the State’s
context and felt needs. These are appraised and approved by the National
programme Coordination Committee (NPCC) chaired by the Secretary, Ministry of
Health and Family Welfare and the States are required to implement the plan as
approved plan.

10. Analysis of Transfers under
NHM
The basic purpose of NHM is to ensure minimum standards of healthcare throughout
the country.
This requires the government to define the minimum standard, work out the cost of
providing this and to ensure that every State spends the prescribed expenditures to
achieve the minimum standard.
Equalizing health expenditures is only a necessary condition to ensuring minimum
standards of healthcare as there are a number of social determinants of health.
The analysis of implementation of the scheme brings out a number of policy issues
which are as follows:

11. Designing the transfer system to achieve the objective of equalising expenditures is
extremely important. It is important to define the standards and cost them.
There should be clarity in objectives. It is impossible to judge the effectiveness of the
programme when multiple objectives are specified. This leads to a thin spread of the
resources across many activities and increasing difficulty in monitoring.
It is important that the implementing level of Govt. should be allowed to plan and
implement the programme and allocate resources.
Such micromanagement betrays lack of trust with the states.
1.
1.
1.

12. At present, the resources envelope is for each state is determined for 5 different components
and this is determined on the basis of population weighted according to Health Lags and
Area.
The weights assigned to Empowered Action Group (EAG) states at 1.3/1.5 and 3.2 for
Himalayan and North Eastern states as compared to 1 of other states indicate that these are
based on broad judgments rather than actual position on Health lags.
IT IS HARD TO FIND A SIGNIFICANT AND POSITIVE CORRELATION BETWEEN THE GRANTS
GIVEN AND HEALTH STATUS IN THE STATES.
Kerala, the state with best IMR gets the 3rd highest grant allocation whereas grants allocated
to Uttar Pradesh, the state with the highest IMR is much lower than many states with much
lower IMR.
2.
2.
2.

13. The analysis of transfers shows that the actual release of funds was lower than the
original allocation in all the states.
The largest shortfall was in Jharkhand followed by Andhra Pradesh and Telangana.
3.
3.
3.
4.
4.
4.
The fact that there was a shortfall in the actual release from the original allocation
implies that this was substantially due to the budget cut.
This is revealed by the fact that actual expenditure on NHM in 2014-15 was lower than
the budget estimate by 20 percent.

14. One of the reasons for the shortfall in actual release of expenditures from the original
allocation is the inability to provide the utilisation certificates and fulfill other
compliances in time.
This issue must be addressed by building capacity in non-complying states and
introducing multi-year budgeting so that states use the funds.
5.
5.
5.
6.
6.
6.
An important objective is to ensure that funds given by Central Govt. for augmenting
health services add to overall expenditure and that states do not substitute these funds to
their own spending.
Some states do substitute some portion of transfers by cutting down
health expenditure.

17. REFORM ISSUES
The foregoing analysis shows that the scheme has been less than
optimal in achieving the objectives it has set forth.
The basic objective of ensuring a prescribed minimum standard of
health services cannot be achieved with the present design and
implementation mechanism.
Therefore, the scheme needs to be revisited to make it more effective.
Different reform issues for making the scheme more effective are
discussed in the next slides:

18. 1.
1.
1.
It is necessary to define the objective of the scheme clearly. This implies that it is necessary
to avoid multiple objectives and focus on a single objective. The objective of the scheme
should be to ensure a prescribed minimum health infrastructure for primary and secondary
healthcare including physical infrastructure, health professionals, and drugs.
2.
2.
2.
It is not necessary to have multiple interventions and give grants under a large number of
budget heads. Micromanagement and minute division of transfers hugely enhances the
transaction cost and spreads the resources thinly across several interventions which will
prevent making an appreciable impact on the health infrastructure. When the nature of the
intervention is decided by the States themselves, it is important to trust them and provide
them the flexibility to ensure the type of infrastructure and strengthening of services they
intend to provide.

19. 3.
3.
3.
The resource envelops allocation to the states should be made purely on the basis of
shortfalls in infrastructure as per the specified norms.
As the objective of any specific purpose transfer is to ensure minimum standards of
services, it is necessary to define what is the minimum standard sought to be equalized
and make allocations accordingly.
4.
4.
4.
Simplification of the transfers in the lines indicated in (ii) above should considerably
reduce the compliance requirements by the States. In addition, as some infrastructure
facilities in the health sector may require a longer time period to complete, multi-year
budgeting may be thought of as a solution.

20. 5.
5.
5.
It is important to institute a system of incentives and accountability. This does not fall in
the realm of design of the transfer system but implementation. To a considerable extent,
this has to do with the system of governance in the State.
6.
6.
6.
Significant inter-state variations in the health infrastructure including human resources
between the States and the need to bring up the states lagging in the services to the
minimum level, it may be appropriate to design the scheme requiring varying matching
requirements. The GCS may be grouped into three categories depending on their taxable
capacity as high, moderate, and low capacity states and the matching ratio for the states
may be fixed at 50%, 40% and 30%. This way, low-capacity states will find it easier to
contribute to their matching requirements and avail themselves the Central transfers.

21. 7.
7.
7.
Ensure that the grants given to the States add to the expenditure on healthcare and the
States are not allowed to substitute their own spending by transfers.
This would require adding a condition to availing the grants. This could be done by
stipulating that the share of health expenditure in total budgetary expenditure increases
by the volume of grants received.

22. Beauty
Diya Gaba
Gauri Gupta

23. SARVA SHIKSHA
ABHIYAN

24. The 86th amendment to the
constitution of India making free
and compulsory educationto
children between the ages of 6 to 14
a fundamental right.
The programme was pioneered by
former Indian prime minister Atal
Bihari Vajpayee.
The national mission for SSA was
initiated in January 2001.
SARVA SHIKSHA ABHIYAN(SSA)
is an Indian government programme
aimed at the universalization of
elementary education.
s

25. FEATURES OF SSA
The share of states and union
territories in total grants are
determined on the basis of
approved work plan and
budget(AWP&B).
The motto for SSA was
"education for all".
Aimed to provide all community
children quality education in a
mission mode.
This was a shared cost
programme between the central
and state government.
01
03
02
04
The central share is released in
three installments-ad-hoc,first
and second.Then the central share
is released to states and the latter
release the funds to SISs.
05
05

26. OBJECTIVES
1.The objective of the programme were to ensure universal
access,retention,inclusiveness by bridging gender and social category gaps in
education,enhancement in the learning levels of children.
2.Improving the quality of education.
3.Helping the weaker sections of the society so that their children can also be
educated;etc.

27. The frame work for implementation of SSA has accordingly been
amended in september 2010 to align with the provision of Right of
children for free and compulsory education (RTE Act), which was
enacted in 2009.
An important provision of the act is the requirement of admitting
25 percent of the seats in private schools for the children belonging to
the weaker sections of the society in pre-primary and class 1.

28. Provision for a non-admitted child to be admitted to an age in
appropriate class.
Specifies the duties of different levels of government in
implementation.
Lays down the norms and standards relating to pupil-teacher
ratio,building,infrastructure,school-working days etc.
Provides for reimbursement of fees to states towards expenditure
incurred by them for admission of EWS.
prescribes screening procedure for admission of children and
prohibits capitation fees.
Provisions of RTE Act:

29. ANALYSIS OF
SARVA SHIKSHA
ABHIYAN

30. 4
The expenditure per child in the school going age positively
related to per capita GSDP with correlation coefficient of 0.688

31. Per Capita Expenditures in states - Per Capita Incomes (Positive
Relationship)

32. No virtual relationship between the two variables.

33. Grant/ per child according to Ratio of children out of school shows hardly any
relationship between two variables with correlation coefficient of 0.112.

34. Grant/ per child according to Dropout Ratio shows no relationship
between two variables with correlation coefficient of (-)0.0698.

35. There is a positive realtionship between grant release and Grant
allocation in States According to Per Capita GSDP.

36. After the enactment of RTE, It's provision of 25% seats in private schools for
disadvantaged children created some social problems :
Only miniscule minority of the students can be admitted in private schools.
Disadvantaged students feel segregated and discriminated .
RTE students find it onerous to compete with regular students as those
students have either their parents guidance or tuition facility.
This provision clearly states,not improving the quality of government schools
.So,States should better improve the standards of government schools .

37. The main focus of SSA should be to reduce educational inequalities so that
children are provided with access to education irrespective of place ,economic
and social background.
This needs improvements in design and implementation of the scheme and to
build the capacity of the lagging states.
Multiple interventions only create problems ,so it is necessary to trust the
states ,handhold them where necessary and provide flexibility in the use of
funds rather distribute them through several interventions .

38. Shruti Omar
Anjali Diwakar

39. National Rural Employment Guarantee Act 2005 later renamed as the "Mahatma Gandhi National Rural
Employment Guarantee Act" or MGNREGA is an Indian labour law and social security measure that aims
to guarantee the 'right to work'.
It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment
in a financial year to at least one member of every household whose adult members volunteer to do
unskilled manual work.
The act was first proposed in 1991 by P.V. Narasimha Rao. It was finally accepted in the parliament and
commenced implementation in 625 districts of India.
This act was passed in 23 August 2005 under the UPA government of Prime Minister Dr. Manmohan
Singh with Dr. Raghuvansh Prasad Singh as Minister, Rural development who presented the bill in the
parliament.
The programme was introduced by merging and expanding the erstwhile Sampoorna Grameena Rozgar
Yojana (SGRY). It was started in 200 districts of the country in 2006 and the coverage was expanded to
additional 130 districts in 2007 and the entire country in 2008.
ABOUT

40. The job seekers are required to obtain the job cards by applying for registration.
The job card holders have to be provided with employment within 15 days from the date of application for
the job failing which they are entitled to receive unemployment allowance.
Contractors are not supposed to execute the works and unskilled wage should constitute 60 per cent of
the work plan and the remaining 40 per cent should be incurred for material cost and skilled wages.
The entire scheme has to be implemented by the Panchayats and the share of village panchayats should
be at least 50 per cent.
Priority in the works should be assigned to those involving natural resource regeneration and improving
agricultural productivity, drought proofing and flood protection.
Payment to the workers have to be made directly to their bank or post office accounts.
FRAMEWORK

41. (i) This is a rights based scheme for adult members willing to do manual labour;
(ii) The employment must be provided to the job card holders within 15 days of their
application failing which they are entitled to receive unemployment allowance;
(iii) Job card holders can receive employment entitlement is up to 100 days in a
financial year depending upon their demand;
(iv) The works chosen must be labour intensive with unskilled wages constituting 60%
of the cost;
(v) The facilities such as crèche, drinking water, first aid and shade should be provided
at the work sites;
FEATURES

42. (vi) Implementation of the scheme is done at decentralized levels with village panchayats
required to implement 50%. The entire work plan is supposed to be identified and
recommended by the Gram Sabha. The Panchayat Raj Institutions have been given the
primacy in planning, implementing and monitoring the scheme;
(vii) women beneficiaries must constitute one-third of the employment provided;
(viii) There must be proactive disclosures through social audit, 45 grievance redressal
mechanisms to ensure transparency and accountability and
(ix) the States are responsible for implementation and ensure that work as demanded for
up to 100 days is ensured.

43. Analysis of the Scheme
Governmental intervention in redistribution is necessary because markets do not bring about the desired
state distribution of income and wealth.
It is also important that while funding for such redistribution has to come predominantly from the Central
government, implementation of anti-poverty intervention has to be at local levels for reasons of
comparative advantage.
The focus of this study is design and implementation of the specific purpose transfer for generating wage
employment in rural areas to minimise the hardship arising from rural poverty.
Although there are multiple objectives in the scheme, the principal focus is to mitigate the distress caused
by rural poverty.
This would mean that the spending on MGNREGA should spread across the States such that the State with
higher concentration of poverty should receive larger amounts.
The analysis of per poor spending on MGNREGA across different States shows that in 2014-15, per rural
poor expenditure was negatively correlated (-0.572) with the rural poverty ratio according to the Tendulkar
measure. This shows shortcomings in the targeting of MGNREGA.

44. Graph 8 which presents the analysis shows no particular pattern. It is seen that Tamil Nadu had
the highest number of person days employed even though the rural poverty ratio in the state
was just 15.8 per cent. In contrast, Bihar, Chhattisgarh and Jharkhand and Madhya Pradesh
which had the highest rural poverty ratios had much lower person days of employment.
In contrast, Bihar, Chhattisgarh and Jharkhand and Madhya Pradesh which had the highest rural
poverty ratios had much lower person days of employment.

45. The ratio of grant releases by the Centre to the States with very low per capita GSDP are the lowest.
The ratio increases as per capita GSDP increases and then declines at very high per capita GSDP levels.
The States with low per capita GSDP have the concentration of rural poverty and the programme is
much more important to them than more affluent States.
At very high income levels where the rural poverty ratio is low, the States themselves may not attach
much importance to the programme and utilise the funds.
The graph plotting the difference between the original cost estimate and final release of
expenditures arranged according to per capita GSDP in the States brings out an interesting
pattern:-

46. The important point is that as MGNAREGA is a programme of giving wage
employment to the poor, it is desirable to design the grant system based on
single factor of rural poverty rather than bring in other considerations
One of the reasons for the low ratio of actual release of grants to the original
expenditure estimate in the States with low per capita GSDP may be due to
their inability to provide matching contributions.
As suggested in the case of NHM and SSA, it may be desirable to devise a
varying system of matching ratios depending on the revenue raising capacities
of the States. This would help the States with low per capita GSDP which also
are those with high concentration of rural poverty to utilise the grants better.