The paper seeks to understand (i) the role of National Health Mission (NHM) in defining/resetting health priorities in States and addressing horizontal inequalities, (ii) the constraints faced by States within the federal structure for delivering effective healthcare services, and (iii) the mechanisms through which States manage these constraints.
The paper discusses the evolving landscape of federal financing for health in India, focusing on the role of Centrally Sponsored Schemes (CSSs) such as the National Health Mission (NHM) in shaping health priorities at the state level. The study combines quantitative budgetary analysis with qualitative Key Informant Interviews (KIIs) conducted in six states. It highlights the increasing role of the Union government in healthcare financing through CSSs and its implications for state-level health prioritization and capacities.
The launch of NHM has played a significant role in reversing the declining trend of public health spending as a share of GDP in India. However, the overall public health spending by states has remained marginally above 5% over the last three decades, indicating that health remains a low priority in state budgets. NHM has provided states with non-wage resources, enhancing their ability to deliver health services, particularly in states with low own revenue.
The study emphasizes the marked variations in own revenue across states and the increasing dependence of states on the Union government. It also highlights the impact of NHM on health spending, with significant variations in per capita spending across states. Fiscally poorer states are more reliant on transfers from the Union government, making them vulnerable to fund flow uncertainties. The study also presents varied state experiences with fund flows through CSSs, with some officials reporting uncertainty and inconsistency in fund receipts for health schemes.
Additionally, there are mixed views on the implications of the Union government’s role in designing national programs with standardized norms and guidelines. While some states acknowledge the NHM’s role in focusing on health, others feel relegated to the role of implementation without due consideration of local contexts.