Content

1. New demands were placed on 15th Finance Commission. In difficult times, it rose to the challenge
2. In telehealth, scaling up the Indian advantage

Editorial: New demands were placed on 15th Finance Commission. In difficult times, it rose to the challenge

Context:

• The Finance Commission is a constitutional body formed by the President of India to give suggestions on centre-state financial relations.  The 15th Finance Commission (Chair: Mr. N. K. Singh) was required to submit two reports. The final report with recommendations for the 2021-26 period was tabled in Parliament on February 1, 2021.

Relevance:

• GS Paper 2: Devolution of powers and finances to local levels; challenges therein.

Mains Questions:

1. How is the Finance Commission of India constituted? What do you about the terms of reference of the recently constituted Finance Commission? Discuss. 15 Marks

Dimensions of the Article

• Share of states in central taxes
• Criterion of Devolution
• Grants recommended by the commission
• Fiscal roadmap for centre and states:
• Other recommendations by the Commission
• Conclusion

Share of states in central taxes

• The share of states in the central taxes for the 2021-26 period is recommended to be 41%, same as that for 2020-21. 
• This is less than the 42% share recommended by the 14th Finance Commission for 2015-20 period. 
• The adjustment of 1% is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the centre.

Criterion of Devolution

• Income distance: Income distance is the distance of a state’s income from the state with the highest income.  Income of a state has been computed as average per capita GSDP during the three-year period between 2016-17 and 2018-19.  A state with lower per capita income will have a higher share to maintain equity among states.
• Demographic performance: The Terms of Reference of the Commission required it to use the population data of 2011 while making recommendations.  Accordingly, the Commission used 2011 population data for its recommendations. The demographic performance criterion has been used to reward efforts made by states in controlling their population.  States with a lower fertility ratio will be scored higher on this criterion.
• Forest and ecology: This criterion has been arrived at by calculating the share of the dense forest of each state in the total dense forest of all the states.
• Tax and fiscal efforts: This criterion has been used to reward states with higher tax collection efficiency.  It is measured as the ratio of the average per capita own tax revenue and the average per capita state GDP during the three years between 2016-17 and 2018-19.

Grants recommended by the commission

Grants are important as they are more directly targeted and equalize the standards of basic social services to some extent. Many of these grants are linked with performance-based criteria, thereby promoting principles of transparency, accountability, and leading to better monitoring of expenditures.

• Revenue deficit grants: 17 states will receive grants worth Rs 2.9 lakh crore to eliminate revenue deficit.
• Sector-specific grants: Sector-specific grants of Rs 1.3 lakh crore will be given to states for eight sectors: health, school education, higher education, implementation of agricultural reforms, maintenance of PMGSY roads etc
• State-specific grants: The Commission recommended state-specific grants of Rs 49,599 crore.  These will be given in the areas of: social needs, administrative governance and infrastructure, water and sanitation, preservation of culture and historical monuments, high-cost physical infrastructure, and tourism.
• Grants to local bodies: The grants to local bodies will be made available to all three tiers of Panchayat- village, block, and district.  The health grants will be provided for: conversion of rural sub-centres and primary healthcare centres (PHCs) to health and wellness centres (HWCs), support for diagnostic infrastructure for primary healthcare activities, and support for urban HWCs, sub-centres, PHCs, and public health units at the block level.
• Disaster risk management:  The Commission recommended retaining the existing cost-sharing patterns between the centre and states for disaster management funds.

Fiscal roadmap for centre and states:

• Fiscal deficit and debt levels: The Commission suggested that the centre bring down fiscal deficit to 4% of GDP by 2025-26.
• Revenue mobilisation: Income and asset-based taxation should be strengthened.  To reduce excessive dependence on income tax on salaried incomes, the coverage of provisions related to tax deduction and collection at source (TDS/TCS) should be expanded.
• GST: The inverted duty structure between intermediate inputs and final outputs present in GST needs to be resolved.  Revenue neutrality of GST rate should be restored which has been compromised by multiple rate structure and several downward adjustments.
• Financial management practices: A comprehensive framework for public financial management should be developed.  An independent Fiscal Council should be established with powers to assess records from the centre as well as states.  The Council will only have an advisory role.

Other recommendations by the Commission

• Health: States should increase spending on health to more than 8% of their budget by 2022.  Primary healthcare expenditure should be two-thirds of the total health expenditure by 2022.  Centrally sponsored schemes (CSS) in health should be flexible enough to allow states to adapt and innovate.  Focus of CSS in health should be shifted from inputs to outcome.  All India Medical and Health Service should be established.
• Funding of defence and internal security: A dedicated non-lapsable fund called the Modernisation Fund for Defence and Internal Security (MFDIS) will be constituted to primarily bridge the gap between budgetary requirements and allocation for capital outlay in defence and internal security.
• Centrally-sponsored schemes (CSS): A threshold should be fixed for annual allocation to CSS below which the funding for a CSS should be stopped (to phase out CSS which outlived its utility or has insignificant outlay).  Third-party evaluation of all CSS should be completed within a stipulated timeframe.  Funding pattern should be fixed upfront in a transparent manner and be kept stable.

Conclusion

The complex political economy around devolution of funds from state governments to municipalities should further strengthen rather than deter the advocacy for it. State finance commissions would need to emulate the XV FC and its predecessors, and emerge as credible institutions. State governments need to ensure that state finance commissions are constituted on time, resourced right, and their recommendations taken seriously.

Editorial: In telehealth, scaling up the Indian advantage

Context:

• In the novel coronavirus pandemic, health-care providers have been reassigned from other specialties to COVID-19, restricting high quality care for other conditions.

Relevance:

• GS Paper 2: Health

Mains Questions:

1. There are lessons from the pandemic that can be applied usefully to how health care can be delivered. Discuss. 15 Marks

Dimensions of the Article:

• Impact of COVID-19 on Health
• Enhance technology use
• Utilising shared appointments
• Way Forward

Impact of COVID-19 on Health

• A survey conducted by the World Health Organization (WHO) in 105 countries showed that essential services were disrupted in the majority of countries, with immunisation, antenatal and childcare services among the most widely affected.
  • About 45% of low-income countries incurred at least partial disruption of over 75% of services, relative to only 4% of high-income countries.
  • Almost 60% of services were at least partially disrupted in South East Asian countries.
• In India, detection of tuberculosis cases was down by 50% in April-December of 2020 relative to the same period in 2019, and antenatal care visits were down by 56% in the first half of 2020. 
• Cancer care has been badly affected in many countries, as well as diagnosis and treatment of other non-communicable diseases.
• Further, the pandemic has exacerbated inequalities: people living in rural and remote areas were further disadvantaged by not being able to travel to cities to seek specialist care. The pre-existing shortage of specialists in many rural areas led to care being delayed or not happening at all.

Enhance technology use

• The acceleration in the use of digital technologies has mitigated the impact of COVID-19 to some extent. Virtual consultations avoid the risk of COVID-19 transmission and are helping to bridge this socio-economic divide.
• The Indian government’s eSanjeevani platform offers both provider-to-patient interactions and provider-to-provider interactions, where patients visit smartphone-equipped community health officers in rural health and wellness centres; these in turn connect to general practitioners and specialist doctors through a hub-and-spoke model.
• Remote-shared medical appointments in which multiple patients with similar medical needs meet with a clinician at once, remotely, and where each receives individual attention, can greatly increase telehealth capacity by eliminating repetition of common advice.

Utilising shared appointments

• Remote shared medical appointments essentially virtualise in-person shared medical appointments (SMAs) which have been offered successfully in the United States for over 20 years.
  • Patients get more time with their clinician, albeit not in private.
  • SMAs enable peer support and peer-to-peer learning.
  • Providers who have offered SMAs have found them to improve both productivity and outcomes for many conditions, notably diabetes. SMAs could help tackle India’s widespread “sugar” problem.
• E-Sanjeevani and other telehealth platforms could consider offering virtual shared medical appointments.
  • Patients in different villages, with similar conditions can be seen at once remotely by a generalist or specialist, during the pandemic.
  • Once transmission risk subsides, seeing patient groups within each village centre will help build supportive bonds, enable sharing of local knowledge, and likely attract supplementary providers (physiotherapists, optometrists, etc) due to scale.
• Testing and vaccine adoption is stymied by misinformation. Providers can offer virtual group information sessions accessible via smartphone in which a health-care worker explains the benefits of COVID-19 testing and vaccination and answers questions, reaching potentially quite large audiences.
  • Engaging in real time with a care provider in an interactive format will likely encourage safe behaviours to a greater extent than if the same information is provided without interaction.
• Switching to radically different care delivery models requires rigorous testing combined with mentoring, training and behaviour change for both patients and providers.
  • Adoption of in-person shared medical appointments has been slow. The unique telehealth capacity crisis which COVID-19 has created is drawing interest to virtual SMAs.
  • Training platforms such as ECHO, which train primary-care providers in many States through an online platform — can accelerate adoption and should also guide implementers on how to gather data that can be used to scientifically validate this care model.

Way Forward

• India is well poised to ramp up telehealth. Data plans are cheaper in India than anywhere. It is possible to get 1.5GB of data a day for a few hundred rupees a month, and Indians from all socioeconomic groups regularly enjoy group video chats with friends and relatives. Having a group interaction with a care provider on an appropriately secure platform is certainly conceivable.
• WHO’s Global Strategy on Digital Health, adopted by the World Health Assembly, is a call to action providing a road map for nations to rapidly expand digital health services. With innovation in systems thinking, learning and adaptation, new digital tools bring an opportunity to leapfrog into a reality of ‘Health for All’.