The Ministry of Health and Family Welfare (MoHFW) has two departments: (i) the Department of Health and Family Welfare, and (ii) the Department of Health Research. 

The Department of Health and Family Welfare is responsible for functions including (i) implementing health schemes, and (ii) imparting medical education and training.  The Department of Health Research is broadly responsible for conducting medical research. 

The Ministry of Health and Family Welfare ranked eighth in terms of the total budgetary allocation in 2017-18.  This note analyses the financial allocation trends and key issues concerning the health sector.

Overview of Finances[1]

In 2017-18, the MoHFW received an allocation of Rs 48,853 crore. This allocation is an increase of 23% over the revised estimates of 2016-17.  Note that the budget estimates for 2017-18 exceed the budget estimates of 2016-17 by Rs 10,646 crore.

Under the Ministry, the Department of Health and Family Welfare received the highest allocation (97%) at Rs 47,353 crore.  This was followed by the Department of Health Research (3%) at Rs 1,500 crore. Table 1 provides details on the two departments under the MoHFW.

Table 1: Budget allocations for the MoHFW (in Rs crore)

Note: BE – Budget Estimate; RE – Revised Estimates.

Sources: Demand No. 42 & 43, Ministry of Health and Family Welfare, Union Budget 2017-18, PRS.

The revised estimates in 2016-17 for the Department of Health and Family Welfare overshot the budget estimate of that year by Rs 1,282 crore.  Similarly, the Department of Health Research also, overshot the budget estimates by Rs 200 crore.

Figure 1 contains the split in the allocation under the MoHFW for the year 2017-18. 

Figure 1: Top expenditure heads for the MoHFW (2017-18) (in %)

Sources:  Demand No. 42 & 43, Ministry of Health and Family Welfare, Union Budget 2017-18, PRS.

Key allocation trends are as follows:

• The National Health Mission (NHM) received the highest allocation at Rs 26,690 crore and constitutes 55% of the total ministry allocation.
• This was followed by allocation to autonomous institutes (12%) like AIIMS which saw an increase of 10% at Rs 6,088 crore.
• Other top expenditure heads under the MoHFW are Human Resources for Health & Medical Education (8%) at Rs 4,025 crore, Pradhan Mantri Swasthya Suraksha Yojana (4%) at Rs 3,975 crore and National AIDS and STD Control Programme (4%) at 2,000 crore.

Table 2 notes the allocations and the changes to the key schemes and programmes under the Ministry.

Table 2: Allocation to major expenditure heads under the MoHFW (in Rs crore)

Note: BE - Budget Estimate; RE - Revised Estimates; NHM- National Health Mission; NRHM- National Rural Health Mission; NUHM- National Urban Health Mission; PMSSY- Pradhan Mantri Swasthya Suraksha Yojana; NMHP- National Mental Health Programme.

Sources: Demand No. 42 & 43, Ministry of Health and Family Welfare, Union Budget 2017-18, PRS.

• Human Resources for Health and Medical Education has seen the biggest increase at 168% (Rs 4,025 crore) over the revised estimates of 2016-17.
• Higher allocation has been made for Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) at Rs 3,975 crore (104% increase), which focusses on construction of government colleges. Further, Infrastructure Development for Health Research has been allocated Rs 104 crore (45% increase) which enables infrastructure for advancing medical sciences.
• NHM has been allocated Rs 26,690 crore, a 20% increase over the revised estimates of 2016-17. Under the NHM, National Rural Health Mission (NRHM) has been allocated Rs 21,189 crore, a 9% increase over the revised estimates of 2016-17.  The allocation for National Urban Health Mission (NUHM) has increased by 101% at Rs 5,501 crore.
• In terms of allocation to specific diseases, National Mental Health Programme has seen a 0% increase in allocations over the revised estimates and stands at Rs 35 crore. Note that the Mental Health Care Bill, 2016 was passed by the Rajya Sabha and is scheduled for passing in the Lok Sabha during Budget session 2017.[2]   The Bill requires central and state governments to provide access to good quality and affordable mental health services.
• National Centre for Disease Control has seen an increase particularly for the setting up of 27 new branches at Rs 41 crore.
• Food Safety and Standards Authority of India (FSSAI) has seen an increase of 86% from the revised estimates of 2016-17 at Rs 134 crore. Note that the Food Fortification Resource Centre was set up in 2016 under the FSSAI.

Trends in allocation and expenditure

As indicated in Figure 2 below, the allocation to the Department of Health and Family Welfare has increased from Rs 11,366 crore in 2006-07 to Rs 47,353 crore in 2017-18.  Over the period 2006-18, the Compound Annual Growth Rate (CAGR) has been 13%.  CAGR is the annual growth rate over a certain period of time. 

Figure 2: Allocation to the Department of Health and Family Welfare (2006-17) (in Rs crore)

 Note: % change in allocation is BE (2017-18) over RE (2016-17) for 2017-18.

Sources: Union Budget 2006-07 to 20017-18; PRS.

Table 3 indicates the actual expenditure of the Department of Health and Family Welfare compared with the budget estimates of that year.  The utilisation has been over 80% of the budget estimates as seen in the table, even crossing 100% in the year 2015-16.

Table 3: Comparison of budget estimates and the actual expenditure  (2013-15) (in Rs crore)

Note: BE – Budget Estimate.

Sources: Union Budgets, 2015-17; PRS.

The Standing Committee on Health and Family Welfare has observed the following reasons for the underutilisation of funds by the Ministry: (i) slow pace of expenditure on procurement of equipment and capital works; (ii) non-finalisation of machinery and proposals for procurement of machinery; (iii) slow progress in execution of works by the executing agency; and (iv) delays due to pending utilisation certificates which affects expenditure to be incurred by states.[3]^,5 

Low public spending

The public expenditure on health (centre and state) was 2% of the GDP as per the 2016-17 budget estimates.   According to the Economic Survey of India 2015-16, the public health expenditure has remained constant at 1.3% of the GDP, between 2008-09 and 2015-16.[4]  Note that for 2017-18, it is estimated at 2.2%.[5]   The draft National Health Policy, 2015 had proposed to increase the public health expenditure to 2.5% of the GDP.^[6]

India’s public health expenditure as a percentage of GDP is relatively low as compared to other countries.  Table 4 shows the public expenditure on health as a percentage of GDP by various countries in 2013.

Table 4: Public health expenditure in countries (2013) (in %)

Sources:  Health Status Indicators, National Health Profile, 2015, Ministry of Health and Family Welfare; PRS.

In 2011, the High Level Expert Group (HLEG) on Universal Health Coverage constituted under the Planning Commission made certain recommendations with respect to the provision of universal health coverage.^[7]   Universal health coverage includes ensuring equitable access to affordable and appropriate health services of assured quality.  The HLEG recommended that the central and state governments must increase public expenditure on health to, (i) at least 2.5% of the GDP by the end of 2017, and (ii) at least to 3% of GDP by 2022.

Figure 3: Public expenditure on health as a % of the GDP (2013) (in %)

Note:  The countries have been represented according to different income levels as classified by the World Bank.

Sources:  National Health Profile, 2016, Ministry of Health and Family Welfare; PRS.

The World Bank measures the progress made in the health sector in select countries of the World according to the Universal Health Coverage (UHC) Index.  On this Index, India ranks 143 among 190 countries in terms of per capita expenditure on health.  In 2011, while the world average was $146 PPP, India spent $44 PPP.[8]^,[9]  Figure 3 notes the public expenditure on health by countries classified into income levels by the World Bank.  Despite being classified as ‘low middle income’ country, India spends less than the ‘low income’ countries.

Financial allocations to outcomes

• National Health Mission

The National Health Mission (NHM) consists of two sub missions, the National Rural Health Mission (NRHM) (includes health interventions in rural areas) launched in 2005 and the National Urban Health Mission (includes health interventions in urban areas) launched in 2013. 

Components of NHM

NHM includes various components, these include: (i) reproductive, maternal, new born and child health services (RCH Flexi Pool), (ii) NRHM Mission Flexi Pool for strengthening health resource systems, innovations and information, (iii) immunisation including the Pulse Polio Programme, (iv) infrastructure maintenance, and (v) National Disease Control Programme.

Funding of NHM

In 2017-18, the allocation for NHM increased from Rs 22,198 crore in 2016-17 (revised estimate) crore to Rs 26,690 crore in 2017-18.  This is a 20% increase over the revised estimates of 2016-17.

Figure 4 indicates the change in the total allocations to NHM as well as change as a percentage of the total Ministry’s budget.  It can be observed that while the total allocation to NHM has increased over the years, its percentage share in the total budget has decreased from 73% in 2006-07 to 56% in 2017-18.  This may be on account of increased devolution of resources to states following the recommendations of the Fourteenth Finance Commission.

Figure 4:  NHM allocation and share in the total health budget (2007-2017) (in Rs crore)

Notes:  Values from 2007-09 are revised estimates since actuals are not available.  Values for 2016-17 and 2017-18 are revised estimates and budget estimates respectively

Sources: Union Budget 2006-07 to 2017-18, Ministry of Health and Family Welfare; PRS

The funding for the mission is done through flexible pools, such as NRHM-RCH flexible pool, and flexible pool for communicable diseases.  The rational for creating of the flexible pool is to allow more financial flexibility and efficient distribution of funds in order to obtain desired health outcomes.

Note that in 2017-18, among all the flexible pools, the non-communicable flexible pool has received the highest increase in allocation from Rs 555 in 2016-17 to 955 crore in 2017-18.  The RCH Flexible Pool including Routine Immunization Programme, Pulse Polio Immunization Programme, National Iodine Deficiency Disorders Control Programme etc. has seen a decline of 24% (Rs 5,966 crore).  Further, Health System Strengthening under NRHM has seen a 52% increase (Rs 8,383 crore).

Release and utilisation of funds

Delays have been noted in the release of funds under NHM.  For example, out of the total funds of Rs 8,242 crore released in 2016 under RCH and Health systems strengthening, Rs 7,460 crore were transferred with a delay from 0 to 142 days and Rs 783 crore is still lying with State Treasury.⁵  Further, as of 2016, there are 220 pending utilisation certificates amounting to 3,224 under the RCH pool.⁵

Despite delay in release of funds, effective utilisation of funds has been noted in the case of NHM where fund releases have been around 98 percent.  The Standing Committee observes that timeliness of transfer of funds is extremely important as delayed transfers hamper fund utilisation.  In this regard, it has been recommended that the existing fund release mechanism for NHM needs to be reviewed for better transfer of funds.⁵

• Health Infrastructure and Pradhan Mantri Swasthya Suraksha Yojana

As of 2016, there are 19,653 government hospitals (including community health centres) in India, of which 80% are rural hospitals and 20% are urban hospitals.^[10]  Depending on the level of care required, health institutions in India are broadly classified into three types.  This includes primary care (primary health centres), secondary care (district hospitals) and tertiary care institutions (specialised hospitals like AIIMS).

Primary health care infrastructure provides the first level of contact between health professionals and the population. ^[11]  The HLEG in 2011 had observed that focus on prevention and early management of health problems can reduce the need for complicated specialist care.⁷ 

Table 5: State of rural health infrastructure

Sources: Rural Health Statistics 2016, Ministry of Health and Family Welfare, and Rural Health Infrastructure, Ministry of Statistics and Programme Implementation; PRS.

Broadly, based on the population served and the type of services provided, primary health infrastructure in rural areas consists of a three tier system.  This includes Sub-Centres (SCs), Primary Health Centres (PHCs) and Community Health Centres (CHCs).^[12]  A similar set up is maintained in urban areas.^[13]  Table 5 above contains the required number, current status and the shortfall of rural SCs, PHCs and CHCs.  A shortfall has been observed at different levels of the healthcare delivery system. 

Pradhan Mantri Swasthya Suraksha Yojana

Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) has been implemented since 2003 with objectives of (i) correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services, and (ii) to augment facilities for quality medical education in the country.  This includes establishing AIIMS like institutions and upgrading certain state government hospitals. 

Figure 5:  Allocation to PMSSY (2009-17) (in Rs crore)

Notes:  Values for 2016-17 and 2017-18 are revised estimates and budget estimates respectively

Sources: Union Budget 2008-09 to 2017-18; PRS.

The allocation to PMSSY increased by 104% over the revised estimates of 2016-17.  The allocation to the scheme in 2017-18 is Rs 3,975 crore. 

With respect to AIIMS, the allocation increased by 4.6% over the revised estimates of 2016-17.  Over the years the allocation increased from Rs 489 crore in 2006-07 to Rs 2,400 crore in 2017-18. 

The Standing Committee while examining the functioning of AIIMS observed that out of all the  projects (completed and on-going), most of the projects were unable to meet the cost and time deadlines.[14]  In order to ensure monitoring and time bound compliance of the projects, it recommended the setting up of an Oversight Committee which would report directly to the Director of the Institute.  Note that the 2017-18 budget seeks to set up two new AIIMS in Jharkhand and Gujarat.

• Regulation of private health services

As per the National Sample Survey 2015, most hospitalisation cases were seen in private hospitals (68% in urban and 58% in rural areas).^[15]  Further, in case of hospitalised, the cost of treatment (excluding childbirth) was four times higher in private hospitals (Rs 25,850) as compared to that in public hospitals (Rs 6,120).¹⁵

The HLEG observed that regulatory standards for public and private hospitals are not adequately defined and are poorly enforced.  Further, the quality of healthcare services varies considerably in the public and private sector.^[16]  It has also been observed that many practitioners in the private sector are not qualified doctors.¹⁶ 

The 14^th Finance Commission study group observed that the unregulated nature of the private sector is one of the issues leading to the high financial burden on households (which is not commensurate with the quality of care).[17]  It recommended that a policy measure must be taken to regulate the private healthcare sector.

• Human resources in health

Between 2008 and 2015, the number of registered doctors increased from 7,61,429 to 9,60,233 (26 % increase).[18]  Note that despite the increase, there has been a steady increase in the shortfall of doctors, specialists and surgeons.  For example, there is a shortfall of 83.4% of surgeons, 76.3% of obstetricians and gynaecologists, 83.0% of physicians and 82.1% of paediatricians.[19]  Table 6 shows the number of health professionals as of 2015 and the population served by them.   

According to the Health and Family Welfare Statistics 2015, conducted by the Ministry of Health and Family Welfare, the shortfall of doctors at PHCs increased from 1,004 in 2005 to 3,002 in 2015.¹⁰  On similar lines, the shortfall of the number of specialists (such as surgeons etc.) at CHCs increased from 6,110 in 2005 to 17,525.¹⁰

Table 6: Number of health professionals and population served per professional (2015)

Notes: *includes Auxiliary Nurse Midwives, Registered Nurses, Midwives, Lady Health Visitors, **includes Ayurveda Unani Siddha Naturopathy Homeopathy.

Sources: Human Resources in Health Sector, National Health Profile, 2016, Ministry of Health and Family Welfare, PRS.

With regard to health professionals, the HLEG recommended that adequate number of trained healthcare providers and technical healthcare workers must be ensured at different levels of the health system.⁷  In order to provide adequate number of trained staff at certain levels of health care, it recommended measures such as introduction of bachelors program in rural health care and a bridge course for health providers to develop appropriate competencies etc.  Further, it also recommended that the density of human resource in health must be increased to achieve the World Health Organisation norms (at least 23 health workers (doctors, nurses, and midwives) per 10,000 population). 

In this regard, in the 2017-18 Budget, upgradation/strengthening of Nursing Services has seen an increase of 140% from the revised estimates of 2016-17 (Rs 60 crore).  Further, in terms of training of medical professionals, upgradation of State Government Medical Colleges (PG Seats) has seen an increase of 725% (Rs 165 crore) from the revised estimates of 2016-17.  Note that the Budget Speech of 2017-18 highlighted that 5,000 PG seats would be added per annum.

• Health insurance coverage

In 2015, 68% patients in rural areas and 75% patients in urban areas stated that the primary source of financing health treatment (i.e. hospitalisation) was through household income.[20]  In terms of insurance coverage, a significant proportion of the population, 82% of urban and 86% of rural population was not covered under any state sponsored scheme for obtaining support for health expenditure.²⁰

Access to medicines

A large proportion of the out of pocket expenditure of the population on health arises from out-patient care and purchase of medicines.¹⁶  These services are mostly not covered by existing insurance schemes.¹⁶  In 2011-12, over 60% of the out of pocket health expenditure was on medicines (both in rural and urban areas).⁹

The HLEG had observed that an increase in the public purchase of medicines will provide for adequate supply of drugs to the population.  This is expected to reduce the out of pocket expenditure in health.  It had recommended that the public spending on drug procurement must be increased to 0.5% of GDP of the country.

Rashtriya Swasthya Bima Yojana

The Rashtriya Swasthya Bima Yojana (RSBY), launched in 2008, aims to (i) provide financial protection against high health cost, and (ii) improve healthcare access for below poverty line households etc.^[21]  Only 12% of the urban and 13% of the rural population from the targeted population was covered by schemes such as the RSBY or other similar state sponsored schemes.²¹

Figure 6: Allocation to RSBY (2009-17) (in Rs crore)

 Notes: Values for 2016-17 and 2017-18 are revised estimates and budget estimates respectively.  All other values are actuals. Sources: Union Budget 2011-12 to 2017-18; PRS.

Figure 6 shows the RSBY allocation since 2009.  The total allocation to the scheme is Rs 2,250 crore in 2017-18, a 10% increase over the revised estimates of 2016-17.  Note that in 2016-17, the allocation to the RSBY increased by 149% over the revised estimates of 2015-16.  The CAGR between 2009-18 has been 31% for RSBY allocation. 

Central Government Health Scheme

With regard to the Central Government Health Scheme (CGHS), the allocation for 2017-18 is Rs 1,247 crore (20% increase over the revised estimates of 2016-17).  The scheme aims to provide healthcare services to central government employees, Members of Parliament, etc. 

With regard to health insurance, the HLEG recommended that all government funded insurance should be integrated with the Universal Health Coverage system.⁷  In addition, all health insurance cards must be replaced by a national health entitlement card.

 

Annexure

State-wise and global numbers on the health sector

Table 7: Hospitalisation cases (public to private ratio) and average health expenditure (2012-13) (urban and rural, in Rs)

Sources: District Level Household and Facility Survey -4 (2012-13); PRS.

Table 8: Reasons for not using government health facilities (2012-13) (in %)

Sources: District Level Household and Facility Survey -4 (2012-13); PRS.

Table 9: Cross country comparison of health indicators

Sources: National Health Profile, 2016; PRS.

 

[1]  Expenditure Budget, Volume 2, Ministry of Health and Family Welfare, Union Budget 2017-18.

[2]  The Mental Health Care Bill, 2016, http://www.prsindia.org/uploads/media/Mental%20Health/Mental%20health%20care%20as%20passed%20by%20RS.pdf

[3]  “Report no. 96, Action taken by government on the recommendations/observations contained in the ninety-third report on demands for grants 2016-17 (demand no. 42) of the Department of Health and Family Welfare”, Standing Committee on Health and Family Welfare, December 15, 2016, http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Health%20and%20Family%20Welfare/96.pdf

[4]  Economic Survey, 2015-16, Ministry of Finance, http://indiabudget.nic.in/budget2016-2017/es2014-15/echapter-vol1.pdf

[5]  “Report no. 93, Demands for Grants 2016-17 (Demand No. 42) of the Department of Health and Family Welfare”, Standing Committee on Health and Family Welfare, April 27, 2016, http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Health%20and%20Family%20Welfare/93.pdf

[6]  “Draft National Health Policy”, Ministry of Health and Family Welfare, December, 2014, http://www.mohfw.nic.in/showfile.php?lid=3014.

[7]  “High Level Expert Group Report on Universal Health Coverage for India”, Planning Commission of India, November 2011, http://planningcommission.gov.in/reports/genrep/rep_uhc0812.pdf. 

[8]  Health expenditure per capita (US $), World Health Organisation, http://data.worldbank.org/indicator/SH.XPD.PCAP

[9]  “National Health Profile, 2016”, Ministry of Health and Family Welfare, 2016, http://www.cbhidghs.nic.in/E-Book%20HTML-2016/index.html

[10]  Health and Family Welfare Statistics in India 2015, Ministry of Health and Family Welfare, October 2015,

https://nrhm-mis.nic.in/Pub_FW_Statistics2015/Complete%20Book.pdf

[11]  Chapter VIII: Public Health Care System, Planning Commission of India,

http://planningcommission.nic.in/aboutus/committee/strgrp/stgp_fmlywel/sgfw_ch8.pdf

[12]  Part I, Rural Health Care System in India, Rural Health Statistics,

https://nrhm-mis.nic.in/RURAL%20HEALTH%20STATISTICS/(A)%20RHS%20-%202014/Rural%20Health%20Care%20System%20in%20India.pdf

[13]  Framework for Implementation, National Urban Health Mission ,May, 2013, http://nrhm.gov.in/images/pdf/NUHM/Implementation_Framework_NUHM.pdf. .

[14]  “87th Report: The Functioning of All India Institute of Medical Sciences (AIIMS)”, Standing Committee on Health and Family Welfare, Ministry of Health and Family Welfare, August 2015

http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Health%20and%20Family%20Welfare/87.pdf.

[15] “Chapter three, Summary of Findings, Key Indicators of Social Consumption in India in Health”, 71^st Round, National Sample Survey (NSS), Ministry of Statistics and Programme Implementation, June 2015, http://mospi.nic.in/Mospi_New/upload/nss_71st_ki_health_30june15.pdf.

[16] “Chapter: 20, Health, Twelfth Five Year Plan (2012-17)”, Planning Commission of India, http://planningcommission.gov.in/plans/planrel/12thplan/pdf/12fyp_vol3.pdf. 

[17] “Essential Health Package for India Approach and Costing”, Report submitted to the 14^th Finance Commission, Ministry of Finance, September 2014, http://fincomindia.nic.in/writereaddata%5Chtml_en_files%5Cfincom14/others/40.pdf.

[18]  “National Health Profile, 2015”, Ministry of Health and Family Welfare, 2015, http://cbhidghs.nic.in/E-Book%20HTML-2015/index.html.  

[19]  Human Resources in Health Sector, National Health Profile, 2016, Ministry of Health and Family Welfare, http://www.cbhidghs.nic.in/E-Book%20HTML-2016/index.html

[20]  “Chapter three, Summary of Findings, Key Indicators of Social Consumption in India in Health”, 71st Round, National Sample Survey (NSS), Ministry of Statistics and Programme

[21]  “Rashtriya Swasthya Bima Yojana”, Last accessed on March 8, 2016, http://www.rsby.gov.in/about_rsby.aspx.

 

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