Policy Matter

Payment delays dent India’s flagship health, AIDS programmes

India’s main public health programmes, aimed at millions of rural National-Health-Missiongifpoor, have been in disarray for months because the government changed the way that over $1.3 billion in central funds were distributed, according to data and letters seen by Reuters.

In a bid last year to give India’s states more power, the health ministry started sending funds for public health programmes to state treasuries, instead of direct transfers to its regional arms.

But poorly-run regional bureaucracies were unable to cope and both the flagship National Health Mission (NHM) and India’s AIDS prevention programmes suffered – thousands of health workers were not paid for months and the construction of clinics in rural areas was delayed.

In some cases, state governments temporarily used the funds earmarked for health programmes to meet needs of other sectors, health officials said.

The funds involved amounted to about one-third of the total central spending on health, and led to further deterioration in India’s tattered public health system.

Eleven letters obtained by a Reuters reporter under Right to Information (RTI) Act revealed the health ministry’s desperate, and failed, attempts to push states to release funds to NHM arms.

“The progress in NHM works has slowed down considerably in most of the states,” Health Minister J.P. Nadda wrote in a letter to the finance minister in November. “I urge you to review the decision and allow the ministry to transfer funds directly to state health societies.”

The decision last year to route many payments through states, launched by the previous Congress party-led government, affected other sectors as well, but the impact on health programmes has been glaring.

India spends just 1 percent of its GDP on public health, less than Afghanistan and Sierra Leone. On Saturday, the central government increased the annual budget for its main health department by just 2 percent to $4.8 billion.

Still, India struggles to spend all of its allocated health funds because of an inadequate number of doctors and hospitals, and bureaucratic bungling. Data shows the government has only once spent its entire health budget since 2005.

Since April, the center has sent more than $1.3 billion to the states for the NHM, which undertakes treatment of diseases such as tuberculosis and malaria, construction of rural health centers and immunization drives.

No state treasury released the funds to the designated health societies within a stipulated 15-day period, with delays running into months in some cases, according to government data seen by Reuters. More than $180 million is still to be released.

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