| Introduction: Contextual Introduction Body: Highlight the factors that contribute to the gap and how fiscal space and operational frameworks impact the efficacy of health schemes. Conclusion: Way forward |
The realization of the full potential of budgetary allocations in the health sector depends significantly on State-level factors, especially as many health initiatives are implemented through Centrally Sponsored Schemes (CSS), where States share the cost and responsibility for execution.
Factors
- Low fund utilization: For instance, under the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), the actual expenditure has consistently been much lower than the budgeted allocation. This is due to delays in execution, complex structures in grant disbursement, and challenges in integrating health initiatives with existing programs at the State level.
- Financial Management: Similarly, in the Human Resources for Health and Medical Education (HRHME) initiative, the funds utilized have been significantly lower than allocated, indicating inefficiencies in deploying capital expenditure. These challenges highlight the need for improved public financial management at the State level, better planning, and coordination to ensure timely disbursement and execution of funds.
- Shortage of Human Resources: A significant shortage of health professionals, especially in newly established medical colleges and rural healthcare centers, undermines the full potential of health sector investments. For example, there are substantial vacancies in teaching faculty positions in medical colleges and specialist doctors in healthcare institutions, particularly in States with weaker health systems like Uttar Pradesh and Empowered Action Group States.
Impact
- Fiscal Space in States: States are constrained by limited fiscal space to maintain the physical infrastructure created under central schemes. While central funding supports initial capital investments, States are required to bear recurring costs, such as salaries, maintenance, and supplies, after the project duration (e.g., after 2025-26 for PM-ABHIM). Moreover, State governments have competing demands on their budgets, with health often receiving a lower priority compared to sectors like infrastructure or education.
- Operational Complexities: The execution of health schemes is complicated by overlapping funding sources, bureaucratic procedures, and the need for extensive reorganization of public health institutions. For example, in the case of Integrated District Public Health Laboratories (IDPHLs), States need to integrate various vertical health programs, which involve complex planning and restructuring. Delays in such restructuring often lead to underperformance in health outcomes.
Conclusion
The gap between budgetary allocations and health outcomes in India is a complex issue influenced by a range of factors. To address this gap, it is essential to strengthen fiscal space, improve operational frameworks, and address underlying social, economic, and demographic challenges.
