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Utilisation, Fund Flows and Public Financial Management under the National Health Mission
Since April 2014, funds for various centrally sponsored schemes, including the National Health Mission, are being transferred to implementing agencies through state treasuries. This has added an additional layer in the institutional structure for nhm fund flows. We analyse the utilisation of nhm funds in 29 states in two recent years, and the time taken for release of these funds from state treasuries to implementing agencies in three selected states: Bihar, Maharashtra, and Odisha. On average, only about 55% of funds allocated for nhm were utilised in 2015–16 and 2016–17. In Bihar and Maharashtra, this was partly due to significant delays in release of funds from state treasuries to implementing agencies. The delays were a result of complex administrative procedures associated with the release of nhm funds from state treasuries.
The authors would like to thank the World Health Organization for supporting the study. The authors are thankful to Anil Garg, former consultant, Ministry of Health and Family Welfare for extending support to the study. They are also thankful to Jay Dev Dubey for insights on various parts of the study.
In 2010, the Government of India (GoI) constituted a high-level expert group to recommend reforms for efficient management of public expenditure. One of the recommendations of the committee was on the mode of transfer of funds from union to state governments for various central schemes, including the National Health Mission (NHM). Till then, NHM funds from the central government were directly transferred to implementing agencies in states bypassing the treasuries of the state governments. The committee raised concerns about accountability of fund transfers outside the state treasuries, and suggested that all central scheme funds should be released to implementing agencies through state treasuries.
Since April 2014, funds for various centrally-sponsored schemes (CSSs), including NHM, are being released to implementing agencies through state treasuries. This has added an additional layer in the architecture of fund flows for various CSS, including NHM. The change in the mode of flow of CSS funds can potentially have a bearing on the effective use of budgeted resources for these schemes. A report of the Comptroller and Auditor General (CAG) of India recently showed that there were high unspent balances with state-level implementation agencies of NHM reflecting low utilisation of NHM funds (CAG 2017).1
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