Unutilized Funding: A Growing Concern
The Union Health Ministry’s inability to utilize Rs 8550.21 crore from the allocated budget in the financial year 2023-24 has raised significant concerns. This figure surpasses the Rs 6800 crore set aside for the establishment of new AIIMS institutions for the fiscal year 2024-25. This is the highest proportion of unutilized funds since the second term of the Modi government began in 2019-20, reflecting a troubling trend in health expenditure.
Budget Cuts and Allocation Discrepancies
The health budget for the current fiscal year has been reduced by 3%, continuing a pattern of consistent cuts despite the promises made post-COVID-19. This reduction stands in stark contrast to the claims of increased health priorities made during the pandemic. The Economic Survey of 2023-24 emphasized the importance of mental health, but the actual budgetary allocation for national tele-mental healthcare services has decreased significantly.
Comparison with Previous Allocations
Historically, the Union Health Ministry’s budget allocations have seen increases beyond initial estimates from 2019-20 to 2022-23. However, this trend reversed in 2022-23 and 2023-24, leading to a scenario where unutilized funds have become a major issue. The current allocation for the Department of Health and Family Welfare stands at Rs 87,656 crore, reflecting a 13% increase from the previous year’s budget estimates. Yet, adjusted for inflation, this represents a decline of just over 3%.
India’s Global Standing on Health Expenditure
India’s health expenditure remains among the lowest globally, even as out-of-pocket health costs push thousands into poverty annually. Despite the reduction in these costs, health spending continues to be insufficient. Indranil Mukopadhyay, a health economist at OP Jindal University, highlights the serious implications of not fully utilizing allocated funds, emphasizing that this mismanagement exacerbates existing health disparities.
health economist at OP Jindal University
Role of State Governments and Utilization Issues
While some of the budget includes centrally sponsored schemes, the responsibility for fund utilization also falls on state governments. The rising share of health expenditure borne by states underscores their need for adequate funding. Mukopadhyay points out that delays in state demands and fund disbursal from the Union government contribute to underutilization, but this should not justify leaving funds unused.
Decline in Health Education and Research Funding
The budget for ‘Human Resources for Health and Medical Education’ has seen a significant reduction, with only Rs 1274.8 crore allocated this year. Last year’s underutilization of the scheme’s budget adds to the concern. Additionally, the Biotechnology Research and Development department, part of the Ministry of Science, experienced a Rs 500 crore budget cut due to similar underperformance issues. Conversely, the Indian Council of Medical Research received a Rs 300 crore increase in its allocation.
AIIMS and Health Infrastructure Schemes
The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), which includes setting up new AIIMS institutions, has seen a budget decline. The budget document mentions that of the 16 new AIIMS sanctioned, only 11 are functional. The remaining institutions, including those in Vijaypur, Madurai, Darbhanga, Awantipura, and Manethi, are still pending operational status.
The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM), aimed at enhancing health infrastructure to better handle future pandemics, has also faced challenges. Launched with an ambitious outlay of Rs 64,000 crore, the scheme has received only Rs 14,138.98 crore until the end of 2024, with Rs 3,756 crore allocated this year. The remaining funds must be utilized within the next two years, highlighting the scheme’s slow progress.
Aligning Actions with Promises
The current state of health budget utilization reflects a significant disconnect between policy promises and actual financial management. With the ongoing issues of unutilized funds and budget cuts, it is essential for the Union Health Ministry to address these discrepancies and ensure that allocated funds are effectively used to improve India’s health infrastructure and services. The need for increased and efficient spending is crucial in addressing the country’s health challenges and meeting its health policy goals.
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