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India's Public Health: A Financial Aetiology

A close look at the utilisation of funds earmarked for the implementation of three public health programmes of the Government of India shows that more than the paucity of resources what bedevils the system is its inability to translate the funds into public health facilities and services. If we fail to take meaningful action to tackle the systemic deficiencies, we would be frittering away the demographic dividend we are endowed with.


India’s Public Health: A Financial Aetiology

Benny George

A close look at the utilisation of funds earmarked for the implementation of three public health programmes of the Government of India shows that more than the paucity of resources what bedevils the system is its inability to translate the funds into public health facilities and services. If we fail to take meaningful action to tackle the systemic deficiencies, we would be frittering away the demographic dividend we are endowed with.

The views expressed are strictly personal and they do not reflect that of the author’s past, present and future employers in any fashion.

Benny George ( is with Oxfam India, Thane, Maharashtra.

lobal geopolitical ambitions notwithstanding, it is a well acknowledged fact that the public health services in India are appallingly poor. The World Health Statistics 2010, released recently by the World Health Organisation (WHO), bears testimony to that. According to this report, India is home to 23% of the tuberculosis patients, 86% of diphtheria patients, 54% of leprosy patients, 29% of pertussis patients, 42% of polio victims and 55% of malaria patients in the world. India also has the highest percentage of underweight children below the age of five years (43.5%) (WHO 2010). This is far in excess of the percentage of the world population (17%) that India supports. Let us take a look at the water supply and sanitation facilities in India. Virmani contends that historically the greatest advances in longevity and mortality reduction have come not from treatment of individual disease but from having wellmaintained public health facilities such as modern drainage and sewerage systems, drinking water systems that produce and deliver disease-free water and sanitation facilities (Virmani 2007). Yet the state of affairs is not very encouraging, going by the data made available jointly by the WHO and the UNICEF through the Joint Monitoring Programme (JMP) Report for Water Supply and Sanitation. As per the report, only 21% of the rural population had access to “improved” sanitation facilities, while 69% resorted to open defecation, in 2008. However, it painted a much better picture so far as water supply was concerned. Access to an improved source of drinking water was enjoyed by 88% of the population in that year. In rural areas, their proportion stood at 84% (WHO and UNICEF 2010). However, anybody who has travelled in India’s rural areas would have serious doubts about 84% of the people having access to safe drinking water throughout the year.

A huge volume of literature has dissected various issues to identify what actually ails the public health system in India. Comparatively small budgetary allocations made by the Government of India and state governments, over the years, is one of the oft cited reasons by the bureaucracy for the sorry state of affairs that we find ourselves in. In fact, the Government of India and the Planning Commission have both pledged time and again that the public health spending would be raised to 3% of the gross domestic product (GDP). However, it still stands below 1% of the GDP (Duggal 2009). It is difficult to comprehend why the Government of India has not made good on its pledge, when there is absolutely no opposition to it.

Even as the salience of earmarking sufficient funds for providing better services and facilities is acknowledged, it would be pertinent to ask as to what extent the departments concerned are able to spend the funds made available to them. This article explores that aspect, with respect to the National Rural Health Mission (NRHM), the Rural Water Supply (RWS) Programmes and the Total Sanitation Campaign (TSC), the flagship public health programmes of the Government of India, seeking to serve around two-thirds of the total population residing in rural areas.

Though the article seeks to ascertain the extent of fund utilisation under these three flagship programmes, it does not imply in any fashion whatsoever, that exhausting the funds alone would have made a huge difference to public health in India. It is a well-accepted fact that the manner in which the programmes are implemented is as important, if not more, as the quantum of funds spent for the purpose.

1 Fund Utilisation

The NRHM was launched on 12 April 2005 throughout the country with special focus on 18 states (viz, eight the action group states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and Uttarakhand), eight north-eastern states and the hill states of Jammu and Kashmir and Himachal Pradesh which had poor health indices). The aim of the mission is to provide accessible, affordable, accountable, effective and reliable healthcare facilities in the rural areas of the entire country, especially to the poor and vulnerable sections

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Economic & Political Weekly

Chhattisgarh Orissa BiharJharkhand India MP

of the population. As per the framework which is a big giveaway. Figure 1: Percentage Utilisation of NRHM Funds

S N Year Opening Balance Allocation Release Release (as % Total Funds Expenditure Expenditure %

Kumar regime is never tired of flaunting.

(Rs in Crore) (Rs in Crore) (Rs in Crore) of Allocation) Available (Rs in Crore) (Rs in Crore) During 2008-09, the state spent as little as

1 2005-06 0.00 4,633.37 4,433.85 95.69 4,433.85 3,204.15 72.27

28% of the funds. Jharkhand is not far be

2 2006-07 1,229.60 6,997.06 5,774.30 82.52 7,003.87 4,518.02 64.51

hind Bihar in its inertia. During 2008-09, it

3 2007-08 2,485.19 8,928.81 8,508.87 95.30 10,994.03 7,010.07 63.76

spent only 23% of the funds. However, as in

4 2008-09 3,984.02 10,192.23 9,628.44 94.47 13,612.43 10,565.10 77.61

the case of the NRHM, Madhya Pradesh has

5 2009-10 3,047.36 11,581.30 11,224.61 96.92 14,271.94 12,424.19 87.05 Source: Department of Health and Family Welfare, Government of India. been doing reasonably well in utilising the

Even as I refrain from taking a call on programme in rural drinking water supply funds earmarked for the RWS programmes. whether this level of fund utilisation is started in 1999-2000 when sector reform acceptable or not, I would like to look into projects evolved to involve community in 3 Sanitation Facilities the fund utilisation by five states (Orissa, planning, implementation and manage-The TSC is a comprehensive programme to Bihar, Chhattisgarh, Madhya Pradesh and ment of drinking water-related schemes, ensure adequate sanitation facilities in rural Jharkahnd), where the incidence of rural later scaled up as Swajaldhara in 2002 areas with the broader goal to eradicate the poverty was the highest in the country dur-(Government of India 2010a). The RWS Table 4: Percentage Utilisation of RWS Programme

Funds by Select States

ing 2004-05, as estimated by the expert programmes were further refined to incor-

State 2005-06 2006-07 2007-08 2008-09 2009-10

group constituted by the Planning Com-porate the evolving needs of the communi-

Orissa 58 62 100 91 79 mission and chaired by Suresh Tendul kar. ties and the Government of India launched Bihar 35 53 57 28 47

Table 2 presents the relevant figures. the National Rural Drinking Water Pro-Chhattisgarh 48 76 88 80 67 On the face of it, Chhattisgarh appears to gramme during the Eleventh Five-Year Plan. MP 95 82 93 92 99 Jharkhand 53 55 100 23 50

have done well. However, there is a secular Table 3 presents the financial performance

India 72 83 90 81 73

decline in the expenditure, over the years, of the Government of India-funded RWS

Source: Department of Drinking Water and Sanitation, Table 2: Percentage Utilisation of NRHM Funds by programmes. During 2005-06, the states Government of India. Select States

Table 3: RWS Programmes – Financial Performance

State 2005-06 2006-07 2007-08 2008-09 2009-10

S N Year Opening Balance Allocation Release Release (as % Total Funds Expenditure Expenditure Orissa 66 68 62 58 83 (Rs Crore) (Rs Crore) (Rs Crore) of Allocation) Available Reported (%) (Rs Crore) (Rs Crore)

Bihar 73 55 78 83 101 1 2005-06 355.73 3,449.56 3,521.71 102.09 3,877.44 2,789.07 71.93

Chhattisgarh 114 138 142 85 75 2 2006-07 1,088.37 3,539.00 3,532.43 99.81 4,620.79 3,816.56 82.60

MP 71 73 86 85 100 3 2007-08 804.24 4,757.01 4,699.67 98.79 5,503.90 4,928.77 89.55

Jharkhand 105 60 57 88 75 4 2008-09 575.14 6,896.72 7,056.02 102.31 7,631.16 6,160.41 80.73

India 72 65 64 78 87 Source: Department of Health and Family Welfare,

5 2009-10 1,470.75 7,986.43 7,989.72 100.04 9,460.47 6,950.08 73.46

for implementation, the goals would be achieved by 2012 (Government of India 2005). The mission is under the administrative control of the department of health and family welfare, Government of India.

Table 1 features the financial allocation and release made by the Government of India under the NRHM for the last five years and the actual expenditure made by the states. Above 90% of the allocated funds were released during the reference period, except in 2006-07, which could be regarded as a sort of an achievement, given the way the bureaucracy functions in our country. However, the cumulative expenditure by the states was not so encouraging. They managed to spend only 72.27% of the funds made available to them in the first year. The two subsequent years witnessed a decline in utilisation, wherein as much as a third of the funds remained unutilised. However, since 2008-09, the states managed to spend more. Last year the reported expenditure was 87.05%. Table 1: NRHM – Financial Performance


Orissa, the state which has the highest incidence of rural


poverty, has been consistently sitting on fairly huge amounts 80 of NRHM funds, even as the rural healthcare facilities 40 are in a state of paraplegia.


Jharkhand also has nothing much to crow about. However, it is gratifying to note that Madhya Pradesh has been doing well in terms of utilising the NRHM funds.

2 RWS Programmes

Historically, drinking water supply in the rural areas in India had been outside the government’s sphere of influence. Community-managed open wells, private wells, ponds and small-scale irrigation reservoirs have often been the main traditional sources of rural drinking water. The Government of India’s effective role in the rural drinking water supply sector started in 1972-73 with the launch of the Accelerated Rural Water Supply Programme. The third generation

2005-06 2006-07 2007-08 2008-09 2009-10

could spend only 71.93% of the funds available, which went up to 89.55% in 2007-08. Thereafter, the fund utilisation declined and the level of expenditure was only 73.46% during 2009-10. This is not a very encouraging scenario, as we are fighting a formidable battle against climate change and its fallout, not to mention the intractable water quality issues plaguing the system.

Let us take a look at the performance of the group of five states (Table 4). If the utilisation figures are anything to go by, it might not be very uncharitable to observe that rural water supply does not figure prominently in the list of priorities of the government of Bihar, which is out of sync with the halo of development that the Nitish

Government of India. Source: Department of Drinking Water and Sanitation, Government of India.

Economic & Political Weekly

february 26, 2011 vol xlvi no 9


Figure 2: Percentage Utilisation of RWS Programme Fundsover the years, though it is 120 MP still way below the accept-

Orissa 100

able levels. An interesting inference could be made from Table 5 that the ex



penditure incurred was


less than the opening bal


ance during 2005-06,

2006-07, 2007-08 and

0 2005-06 2006-07 2007-08 2008-09 2009-10

2008-09! However, during

Figure 3: Percentage Utilisation of TSC Funds

2009-10, the states man

90 80

aged to spend more than what they had as opening


balance, making the fund


release meaningful for the first time since 2005-06. It is not very encouraging to



2005-06 2006-07 2007-08 2008-09 2009-10 note that this is the state practice of open defecation by 2012. The TSC affairs even after instituting the much as a part of reform principles was initiated vaunted Nirmal Gram Puraskar in 2003 to in 1999 when the Central Rural Sanitation incentivise the long march to an open def-Programme was restructured making it ecation free India. demand-driven and people-centred. The Table 6 shows the fund utilisation by the TSC emphasises information, education and five poorest states. Going by the figures, communication, capacity building and hy-one can infer that though a late starter, giene education for effective behaviour Chhattisgarh has come a long way. It change with the involvement of panchayati could spend just 4% of the funds during raj institutions (PRIs), community based or-2005-06. However, it pulled up its socks ganisations (CBOs), and nongovernmental thereafter and started implementing the organisations (NGOs), etc. The key interven-programme seriously. Orissa appears to tion areas are individual household latrines, be the worst in the pack having spent as

school sanitation and hygiene education, little as 33% of the funds last year. community sanitary complexes, and anganwadi toilets, supported by the rural sanitary Conclusions

marts and production centres (Government The facts and figures presented in the of India 2010b). The financial performance foregoing sections clearly indicate that the of the programme is presented in Table 5. state governments are largely not very Let me start on a positive note by observ-successful in translating funds into better ing that the fund utilisation has improved public health in our country. This stark reality reaffirms an interesting

Table 5: TSC – Financial Performance

observation made in the

S N Year Opening Release Total Funds Expenditure Expenditure

Balance (Rs Crore) Available Reported (%)

20th anniversary edition of

(Rs Crore) (Rs Crore) (Rs Crore)

the Human Development

1 2005-06 436.55 595.32 1,031.88 283.52 27.48 2 2006-07 748.36 720.97 1,469.33 617.04 41.99 Report, “One of the most

Chhattisgarh Jharkhand BiharIndia
Chhattisgarh MP India Jharkhand Bihar Orissa

2007-08 852.29 909.13 1,761.42 790.55 44.88 surprising results of human

4 2008-09 970.88 978.70 1,949.57 834.85 42.82 development research in 5 2009-10 1,114.73 1,038.10 2,152.83 1,335.93 62.05

recent years, confirmed in

Source: Department of Drinking Water and Sanitation, Government of India.

this Report, is the lack of a

Table 6: Percentage Utilisation of TSC Funds by Select States

significant correlation between economic

State 2005-06 2006-07 2007-08 2008-09 2009-10

growth and improvements in health and

Orissa 25 32 41 26 33

education. Our research shows that this Chhattisgarh 4 38 57 54 85 relationship is particularly weak at low MP 27 36 50 46 68 and medium levels of the HDI” (UNDP

Jharkhand 11 45 45 47 53 Bihar 14 38 39 44 49

2010). Let us hope that this observation is

India 27 42 45 43 62

the last word on the merits of the “trickle-

Source: Department of Drinking Water and Sanitation, Government of India. down” theory.

It appears that the hurdles on the road to ensuring a decent standard of living for everybody are endless. For the last 60 years or so, we thought that the major roadblock was the paucity of funds. From the days of a “ship to mouth existence” and pawning gold in London, we have come a long way. The contrast could not get any starker as we sit on rotting mountains of grains and the heads of states from the “first world countries” fall over themselves to woo India for land defence deals to stop the un employment rate in their own countries from going through the roof. It appears that the victory that we have notched up is pyrrhic – it does not benefit the vast majority of the people. The legions of farmers who were forced to commit suicide in Andhra Pradesh and Maharashtra since 1991, in our long march to prosperity, might be turning in their graves!

Given the development crossroads we find ourselves at, it is time we focused more on addressing systemic deficiencies. Though no concrete action has been taken so far, it is an accepted fact in the corridors of bureaucracy that the fund absorption capacity of the government departments is limited. The lack of capacity of the poorer states to utilise funds as compared to the national average itself is a matter of grave concern. It is time to acknowledge the reality that market forces come with their share of handicaps and there is no substitute for a vibrant and responsive state. In the absence of such a state, even the forward-looking policies and programmes are doomed to flounder.


Duggal, Ravi (2009): “Sinking Flagships and Health Budgets in India”, Economic & Political Weekly, Vol XLIV, No 33.

Government of India (2005): National Rural Health Mission – Framework for Implementation (20052012), Ministry of Health and Family Welfare, New Delhi.

  • (2010a): National Rural Drinking Water Programme – Framework for Implementation, Department of Drinking Water Supply, Ministry of Rural Development, New Delhi.
  • (2010b): Guidelines, Central Rural Sanitation Programme – Total Sanitation Campaign, June 2010, Department of Drinking Water Supply, Ministry of Rural Development, New Delhi.
  • UNDP (2010): The Real Wealth of Nations: Pathways to Human Development, Human Development Report 2010, New York.

    Virmani, Arvind (2007): The Sudoku of Growth, Poverty and Malnutrition: Policy Implications for Lagging States, Planning Commission, Working Paper No 2/2007-PC, New Delhi.

    WHO (2010): World Health Statistics 2010, Geneva. WHO and UNICEF (2010): Progress on Sanitation and Drinking Water – 2010 Update, Geneva.

    february 26, 2011 vol xlvi no 9

    Economic & Political Weekly

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