The effectiveness of Union Budget allocations for the health sector largely depends on State-level parameters.
Many health sector allocations are for Centrally Sponsored Schemes (CSS), where States share a significant portion of the cost and are responsible for implementation.
Two major Centrally Sponsored Schemes being pursued by the central government to improve State-level health infrastructure are PM-ABHIM and HRHME
Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM): Focuses on building health and wellness centres, block-level public health units, integrated district public health laboratories, and critical care hospital blocks to prepare for future emergencies.
Human Resources for Health and Medical Education (HRHME): Aims to expand medical personnel by establishing new medical, nursing, and paramedical colleges and increasing seats.
It also involves upgrading district hospitals and linking them to new medical colleges.
Low fund utilisation in health initiatives:
PM-ABHIM: Only 29% of the budgeted funds were utilised in 2022-23.
In 2023-24, the Revised Estimate was 50% of the Budget Estimate, but actual utilisation is expected to be lower.
HRHME: Fund utilisation was only about a quarter of the budgeted amounts in 2022-23 and 2023-24.
Due to low fund utilisation, the allocations for both PM-ABHIM and HRHME were reduced in the full Budget compared to the interim Budget.
Challenges in fund utilisation under PM-ABHIM:
About 60% of the resources were to come from health grants recommended by the 15th Finance Commission.
However, only 45% of these grants were utilised between 2021-22 and 2023-24.
States faced challenges in reorganising existing public health labs, leading to delays in fund utilisation.
Many scheme components, such as block public health units and critical care blocks, involve construction, which is often delayed due to complex procedures.
Multiple funding sources for the same activities created additional complexity.
Faculty shortages under HRHME:
Even with infrastructure in place, filling teaching faculty positions in medical colleges is a challenge.
There is a 40% shortage of teaching staff in 11 of the 18 newly created AIIMS institutions.
In Uttar Pradesh, 30% of faculty positions in new government medical colleges were vacant in 2022, affecting the ability to upgrade district hospitals into medical colleges.
Specialist shortages also affect the creation of critical care hospital blocks (CCHBs) under PM-ABHIM.
State-level fiscal challenges:
State governments will need to bear the recurring costs of maintaining health infrastructure built under PM-ABHIM and HRHME, requiring additional financial commitments.
The central government’s support for human resources under PM-ABHIM is only available until 2025-26, after which States will need to plan for ongoing expenses.
Transforming capital expenditure into effective health outcomes depends on:
States' fiscal capacity to manage recurring expenses.
Addressing human resource shortages, particularly for medical and specialist positions.
Improving public financial management processes to better execute schemes and manage grants.
These factors are crucial for ensuring that budget allocations lead to productive health outcomes.
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