Contents:
- Gap between Allocations for Health and Outcomes in Indian States
- An Upward Tick
Gap between Allocations for Health and Outcomes in Indian States
Context: The article discusses the gap between budget allocations for health infrastructure under two major Centrally Sponsored Schemes (CSS)—Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) and Human Resources for Health and Medical Education (HRHME).
Relevance: General Studies Paper II – Governance
Mains Question: Discuss the factors leading to the gap between budget allocations and actual outcomes in the health sector under Centrally Sponsored Schemes (CSS). Suggest measures to improve fund utilization and health infrastructure in states. (15M, 250 words)
- Introduction of Centrally Sponsored Schemes (CSS):
- The Union Budget has made significant allocations for health via schemes like PM-ABHIM and HRHME.
- States co-share part of the cost and are responsible for their implementation, which presents challenges.
- PM-ABHIM:
- Aims to improve India’s preparedness for emergencies through building health and wellness centers (AB-HWCs), block-level public health units (BPHUs), and integrated district public health laboratories (IDPHLs).
- The initiative also focuses on district hospitals, critical care hospital blocks (CCHBs), and establishing medical colleges.
- HRHME:
- Focuses on scaling up medical personnel by establishing new medical, nursing, and paramedical colleges.
- Aims to increase seats in existing colleges to overcome faculty shortages.
- Challenges of Low Fund Utilization:
- Underutilization of Funds: The performance of these schemes has been lackluster, with only 29% of the budgeted amounts utilized for PM-ABHIM in 2022-23.
- Complexity in Resource Allocation: The implementation structure at the state level poses hurdles. Only 45% of the Fifteenth Finance Commission’s health grants were utilized between 2021-22 and 2023-24.
- Overlap of Multiple Funding Sources: Duplication and administrative complexity have slowed down fund absorption.
- Faculty Shortage and Public Health Units:
- HRHME is affected by the shortage of teaching faculty in new and existing medical colleges.
- Despite efforts, more than a third of faculty positions remained vacant in key medical institutions by 2022.
- State-Level Fiscal Space and Operational Frameworks:
- States are required to bear recurring costs after initial allocations under PM-ABHIM and HRHME schemes end in 2025-26.
- Many states are unable to meet these recurring expenditures, further hampering the progress of infrastructure and services.
- Impact on Rural Health Centers:
- In rural areas, Community Health Centers (CHCs) and Block-level Health Units (BPHUs) are struggling due to staffing shortages. Two-thirds of specialists’ posts in rural CHCs were vacant in March 2022.
- Guidelines for establishing medical colleges attached to CCHBs are delayed due to the lack of specialists.
- Administrative and Operational Hurdles:
- Delayed implementation due to reorganization at the state level.
- States need to integrate different vertical public health programs, but rigid administrative procedures and multiple funding sources have complicated the process.
- Necessity of Additional Financial Commitments:
- State governments require additional financial commitments to maintain and staff public health infrastructure.
- The Union government’s support is limited to a certain timeframe; post which states are expected to bear the costs of recurring expenditures.
- Proposed Reforms:
- Addressing underlying structural issues such as human resource shortages and improving public financial management processes is essential.
- Simplification of procedures to reduce delays and avoid duplication in health infrastructure projects.
Conclusion: To bridge the gap between budgetary allocations and outcomes in India’s health sector, states must address structural and procedural challenges at the local level. Efficient fund utilization and improved governance frameworks are critical for turning capital expenditure into effective health outcomes. Expanding the fiscal space, easing procedural bottlenecks, and increasing coordination among different health programs will enhance the success of schemes like PM-ABHIM and HRHME, ultimately improving public health services in India.
An Upward Tick
Context: The World Bank has revised India’s economic growth forecast for 2024 upwards to 7%, citing improvements in private consumption and rural incomes.
Relevance: General Studies Paper III – Economic Development,
Mains Question: Discuss the factors leading to the upward revision of India’s growth forecast by international agencies, with particular emphasis on the challenges faced by India’s export sector. Suggest measures to enhance India’s global competitiveness. (15M, 250 words)
- World Bank’s Growth Forecast:
- The World Bank has revised India’s growth estimate to 7% for 2024, up from the earlier expectation of 6.6%.
- The revised forecast aligns with other assessments, including those of the RBI (7.2%) and IMF (7%).
- Contributing Factors:
- Private Consumption: Expected to rise due to rural income recovery, especially after a strong monsoon following last year’s El Niño.
- Investment Growth: Some deceleration is expected due to slower government capital expenditure growth.
- Projections for 2025-2027:
- The World Bank expects an average growth rate of 6.7% during this period, slightly above IMF’s estimate of 6.5%.
- Challenges on the Export Front:
- Missed Opportunities in Low-Skill Manufacturing: Countries like Bangladesh and Vietnam are benefiting from China’s reduced manufacturing output, while India has not been able to take full advantage.
- Tariff and Non-Tariff Barriers: High tariffs and non-tariff measures have restricted India’s export potential, particularly in industries like textiles, apparel, leather, and electronics.
- Slow Employment Growth: The stagnation in employment levels is a key concern linked to weak export performance.
- Global Competitiveness:
- Rising Competition: India faces stiff competition from countries benefiting from China’s reduced market share in manufacturing.
- Trade Agreements and Value Chains: There is a need for India to integrate better with global trade agreements and value chains to expand its export base.
- Policy Responses:
- Trade Policy Adjustments: The Indian government has already reduced tariffs in recent budgets, but further reductions and reversal of non-tariff barriers are necessary.
- Export Strategy: Diversification and improvement of global trade partnerships can help India overcome the current export challenges.
- Focus on High-Value Manufacturing: India must focus on improving efficiency in sectors like textiles, footwear, and electronics.
Conclusion: While the World Bank’s upward revision of India’s growth forecast is a positive indicator of economic recovery, challenges in the export sector remain significant. India must focus on reducing trade barriers, increasing competitiveness, and strengthening its position in global value chains to ensure sustainable growth. Addressing these issues will be essential for India to fully capitalize on its growth potential in the coming years.
