Editorial 1: Gap between allocations for health, outcomes in States

Context

Fiscal space and good operational frameworks at the State-level could make a difference to the efficacy of the Budget allocations for health schemes.

Introduction

The realisation of the full potential of the allocations in the Union Budget for the health sector hinges on many State-level parameters. Many of these allocations fund Centrally Sponsored Schemes (CSS), where States share significant costs and are responsible for implementation. The fiscal space and operational frameworks at the State level greatly impact the effectiveness of these budget allocations.

Major Centrally Sponsored Schemes(CSS) initiatives

Currently, two major CSS initiatives are being pursued by the central government to strengthen physical health infrastructure in States:

The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM):

• It is aimed at building health and wellness centres (AB-HWCs)
• Developing block-level public health units (BPHUs)
• Having integrated district public health laboratories (IDPHLs) and critical care hospital blocks (CCHBs) in each district
• The goal is to improve India’s preparedness for future emergencies such as pandemics

 Human Resources for Health and Medical Education (HRHME):.

• It strives to scale up medical personnel by establishing new medical, nursing and paramedical colleges and also increasing seats in colleges
• Another important aspect is to also strengthen and upgrade district hospitals and attach them to newly established medical colleges at the district level

Concerns related to low fund utilisation 

Analysis of Estimates of central expenditure on these initiatives in the last three Budgets:

• PM-ABHIM: The ratio of ‘Actual’ expenditures to ‘Budget Estimate’ of the CSS component was only around 29% in 2022-23. In 2023-24, the ‘Revised Estimate’ was about 50% of the Budget Estimate, but is expected to be lower in the ‘Actuals’.
• HRHME: The utilisation of funds was only around a quarter of the Budget estimates in both 2022-23 and 2023-24.

Factors behind the low utilisation of funds under PM-ABHIM

• Low utilisation of budget in the AB-HWC component: 60% of the resources were meant to come from 15th Finance Commission health grants. However, a study shows only 45% of these grants were utilized between 2021-22 and 2023-24, with State officials citing complex execution structures as a key obstacle.
• Dodging duplication: In the IDPHLs component, States had to integrate public health labs across various programs to avoid duplication, necessitating significant reorganization, planning, and coordination at the State level.
• Procedural delays in all components: like BPHUs and CCHBs, involve construction, where fund absorption is often delayed by strict procedures. Overlapping funding from multiple sources for similar activities adds further complexity.

Concerns related to faculty shortage 

• Challenges in filling vacancies: Under the HRHME, even if allocations for physical infrastructure were better utilized, filling the sanctioned teaching faculty positions could remain challenging.
• Shortages of teachers in AIIMS: A study by the Centre for Social and Economic Progress (CSEP) reveals a 40% shortage of teaching faculty in 11 of the 18 newly created All India Institutes of Medical Sciences.
• State’s medical college situation: The situation is more critical in State government medical colleges in Empowered Action Group States. For instance, in Uttar Pradesh, 30% of teaching faculty positions were vacant in 2022 at 17 new government medical colleges set up between 2019-21.
• Need for specialist: This shortage of specialists could impact efforts to establish or upgrade medical colleges and district hospitals.
• Severe gaps in Rural positions: The challenge also affects CCHBs under PM-ABHIM, where staffing norms require specialists. According to rural health statistics for 2021-22, over a third of specialist positions in urban CHCs and two-thirds in rural CHCs were vacant as of March 2022.

Concerns regarding the fiscal space of the states

There is a need for a better managing of financial responsibilities and future planning to address the below concerns:

• Recurring Costs for states: State governments will be responsible for the recurring costs of maintaining the physical infrastructure built under PM-ABHIM and HRHME, necessitating additional financial commitment.
• Support from the Union Government: The Union government’s support for human resources under PM-ABHIM is limited to the duration of the scheme, which runs until 2025-26.
• Ensuring a long-term planning: States must plan and support recurring expenses beyond this period to ensure the productivity of the capital expenditure.
• Crating the fiscal space: States need to create the necessary fiscal space to support these initiatives, in addition to contributing to other Centrally Sponsored Schemes (CSS) and their own State health schemes.

Conclusions

In sum, transforming capital expenditure allocations into effective health outcomes depends on several critical factors: the fiscal capacity of States to meet additional recurring expenditures; addressing underlying structural causes of human resource shortages, and improving public financial management processes for executing schemes and grants. These elements will be crucial in ensuring that the budgetary allocations for capital expenditures are productive.

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Editorial 2: ​From crisis to cascade of hope

Context

In a heated water conflict like the Cauvery dispute, the perspectives of the affected parties during a crisis are often biased. Currently, the Cauvery River remains calm, providing relief to both Karnataka and Tamil Nadu.

Introduction

In early July, both States were on the brink of a water crisis. However, since the second half of July, nature brought a dramatic change in the situation with rains, bringing copious inflow to the river. The situation turned positive with regard to the realisation of water by Tamil Nadu — from deficit to “over surplus.”

Tamil Nadu’s water share: Recent developments and allocation

• Timely Receipt of Water Share : Within 15 days, Tamil Nadu received its full share of water for July and August, as mandated by the Cauvery Water Disputes Tribunal (CWDT) in 2007, and modified by the Supreme Court in February 2018.
• Higher share: The water received was marginally higher than the allocated amount.
• Surplus water flows: continued in the following weeks. As of September 2, Tamil Nadu received about 181 tmc ft of water since June 1, the start of the water year. The stipulated quantum for the entire water year, up to May 2025, is 177.25 tmc ft.

• Allocations for the monsoon months: The CWDT and Supreme Court fixed Tamil Nadu’s share as follows:
  • July: 31.24 tmc ft
  • August: 45.95 tmc ft
  • September: 36.76 tmc ft
• Positive impact of  Southwest Monsoon: The southwest monsoon is vital for both states, providing Karnataka with its wettest period and delivering the most water (123.14 tmc ft) to Tamil Nadu. Except for the first five or six weeks, the 2024-25 water year has been smooth for both key riparian states.

Implementation mechanism

• Previous Year comparisons: This year stands in stark contrast to the corresponding period (June-September 2) of last year when Tamil Nadu received only 33.2 tmc ft of water.

• A 30-year analysis (1994-95 to 2023-24) shows that on 11 occasions, the water realization during June-September was below 100 tmc ft, compared to the stipulated 123.14 tmc ft
• This means that distress occurs at least once every three years.
• Importance of implementation bodies: The Cauvery Water Management Authority (CWMA) and the Supreme Court play a crucial role in the implementation of the final award, along with a spirit of accommodation between states.

• The CWMA and its assisting body, the Cauvery Water Regulation Committee (CWRC), were tested during the 2023-24 water year.
• Unlike the high-profile Cauvery River Authority, chaired by the Prime Minister and state Chief Ministers, the CWMA is led by a full-time official and includes government officers from the states and Union government.

Performance of CWMA and CWRC

• Scope for improvement for CWMA and CWRC: there should be greater transparency in their functioning. Both the Authority and the Committee will have to make public, as quickly as possible, all their decisions in writing.
• Relooking at impartiality: In an intense water conflict such as the Cauvery, the version of the affected parties, in times of crisis, cannot be expected to be impartial.
• Information sharing between the states: The dissemination of authentic information is vital in an inter-State water dispute.
• Need for adequate manpower: If the authority is constrained by a shortage of manpower, in carrying out its functions effectively, the Union Ministry of Jal Shakti should intervene and solve the problem.
• Expanding Authority membership: The Authority should expand its composition to include not just officials but also a diverse group of non-officials, such as farmers, environmentalists, and independent water experts. The Union government could take inspiration from the Chennai Metropolitan Water Supply and Sewerage Board Act, which includes six non-official directors representing public, industrial, and commercial interests.
• Enhancing CWMA’s Composition: The Tribunal’s suggested composition for the CWMA is only advisory, allowing the Union government to modify it as needed. Including a non-official environmentalist could encourage the government to address the river’s environmental degradation more seriously, especially given the challenges posed by climate change.

Way Forward for water shortage

The current positive sentiment can be leveraged to address Bengaluru’s earlier severe drinking water shortage. The Supreme Court allocated 4.75 tmc ft for the city in 2018, and the Karnataka government is advocating for the ₹9,000-crore Mekedatu Balancing Reservoir project, which is currently under review by the Central Water Commission.

Conclusion

Given the trust deficit between the two States (which explains the reason behind Tamil Nadu’s opposition to the project), the idea of the participation of a third party — say, the Union government — can be explored to execute not only the Mekedatu project but also any other project, including hydro-electric across the Cauvery, upstream of the Mettur reservoir. After all, attempts made since the late 1990s in this regard failed. Making another serious attempt is worthwhile to ensure optimal use of precious water resources, which would otherwise go to waste, as is currently happening.