Harsha Joshi
Program Officer, India Primary Health Care Support Initiative (IPSI)
The year 2020 brought global attention to public health and health systems. Faced with the COVID-19 pandemic, governments across the world are prioritizing the health sector and its resource requirements. In India, recent developments such as the 15th Finance Commission (FC) report, and the Union Budget 2021-22 indicate increased government attention to the health sector. Importantly, there is a renewed focus primary health care reforms and increased financing for primary health care.
Efforts to increase financing for the health sector, including primary health care are being made against the backdrop of the COVID-19 pandemic – which saw even the strongest of health systems struggle to cope. Primary health care systems emerged as being integral to the COVID-19 response globally, and their role in future health system resilience and security reaffirmed.
Focus on Primary Health Care post-2020
The union budget of India was presented on the 1st of February 2021. The Budget 2021-22 announced a new scheme for the health sector – Pradhan Mantri Aatma Nirbhar Swasth Bharat Yojana (PMASBY). At the same time, the 15th Finance Commission (FC) report was also tabled in the parliament.[1] The core of the 15th FC grant’s support and significant proportion of PMASBY funds is for supporting the Ayushman Bharat-Health and Wellness Centre initiative (AB-HWC), India’s new flagship comprehensive primary health care initiative.[2]
15th Finance Commission
The 15th FC report highlights the challenges in India’s health care system and views strengthening the primary health care system as a key solution to a stronger health system. For example, the report states, “primary health care should be the number one fundamental commitment of each and every State and that primary health expenditure should be increased to two-thirds of the total health expenditure by 2022”. Following the suggestion by union health ministry regarding allocation of funds, the 15th FC has recommended Rs. 1,06,606 Crores of grants-in-aid support to health sector over the five-year period, which is 10.3% of total grants-in-aid support by FC. This also represents a shift from the previous 14th Finance Commission which presented a combined grant to states and local bodies for drinking water and sanitation, education and health. Moreover, Rs. 70,051 Crores out of this grant (two-thirds of total health grant) are to be released to local governments towards primary health care system strengthening (Table 1).
Table 1. 15th FC Health Grants through Local Governments
| Sub-components | Amount (Rs. Crore) | |
| 1 | Urban HWCs | 24,028 |
| 2 | Building-less sub centres, primary health centres, community health centres | 7,167 |
| 3 | Block level public health units | 5,279 |
| 4 | Support for diagnostic infrastructure to the primary healthcare facilities | 18,472 |
| 5 | Conversion of rural sub centres and primary health centres to HWCs | 15,105 |
| Total | 70,051 |
Source: 15th Finance Commission- Chapter 7, Main Report
Union Budget 2021-22
This year’s health sector budget presented a 137% increase over last year’s health budget estimates. The ‘Health and Wellbeing Expenditure’ amounting to Rs. 2,23,846 Crores, as announced by Finance Minister in her budget speech includes other heads in addition to the health ministry such as the budget of the Ministry of AYUSH, Department of drinking water and sanitation, COVID-19 vaccination funds and 15th FC grants for health and sanitation. Thus, there are no additional heads within the health ministry’s budget and other existing heads have been included in this 137% increase. This can be misleading in judging the changes in government health expenditure.
There has only been a marginal increase in funds for primary health care in the union budget. Broadly, funds for National Health Mission can be considered as funds for primary health care within the MoHFW budget as NHM aims to build district health systems and to strengthen the primary health care service delivery. However, here we consider AB- HWC initiative funds as indicative for primary health care financing as it is more directly linked. Funding for AB-HWCs has increased over the years (Table 2). These funds are allocated for infrastructure, human resources, diagnostics, and IT equipment for upgradation of health facilities to HWCs. The actual expenditure for years 2018-19 and 2019-20 has been reported as 100%, though there is a need to further examine this.
Table 2: Funds for AB-HWC from 2018-19 to 2021-22
| Revised Estimates 2018-19 | Budget Estimates 2019-20 | Budget Estimates 2020-21 | Budget Estimates 2021-22 |
| 1200 Cr | 1600 Cr | 1600 Cr | 1900 Cr |
Source: Expenditure budget volume, Ministry of Finance
Pradhan Mantri Aatma Nirbhar Swasth Bharat Yojana (PMASBY)
During the union budget (2021-22) speech, the Finance Minister announced a new centrally-sponsored scheme – the Pradhan Mantri Aatma Nirbhar Swasth Bharat Yojana (PMASBY) which has an outlay of Rs. 64,180 Cr. over six years. The scheme will support states, in addition to NHM funds, for building primary, secondary, tertiary health systems and strengthening of national institutions. One of the sources of funding for this scheme is by the Asian Development Bank under a results-based lending program, with central and state governments also contributing to the funding. Further details of the scheme, including the mechanisms of fund flow are unclear yet. It is expected that the PMASBY will support following aspects of the primary health care system:
- Building health infrastructure (primary health care facilities) in rural areas in the seven high focus states and three north-eastern states.
- Upgradation of 11,024 urban primary health care centres to HWCs.
- Establishing block public health units at 3382 blocks in 11 high focus states.
What is the current Primary Health Care financing status and what do these announcements mean for Primary Health Care financing?
Separating expenditure on primary health care, is not always clear. Allocation and expenditure on primary care and health system strengthening initiatives for building primary health care systems have been used as measures for understanding primary health care financing.
In India, the National Health Accounts (NHA) provides estimates for expenditure on primary care. In 2016-17, (the most recent NHA estimates) out of a total current health expenditure, 45.2% was spent on primary care.[3] Government expenditure on primary care was 52.1% of current government health expenditure, which is significantly less compared to the National Health Policy goal of 66-67%. The trend has nearly been the same since 2013-14. An increase in primary care expenditure can be expected after the launch of AB-HWC initiative in 2018 followed by further increase after 2020.
Funds for primary health care are routinely provided through the NHM and include central and state government contributions. The Centre’s share is released to state health societies. In a remarkable change to this fund flow suggested by the 15th FC, the grants are to be directly allocated to the local government bodies across the district, block, and village levels. Learning from the key role played by Panchayats in COVID-19 management, the Commission has engaged more deeply at the level of the local government for health sector planning, and extended resources to them to strengthen primary health care. Panchayati Raj Institutions are to be involved as supervising agencies in the primary health care institutions. This recommendation will go a long way in strengthening community participation and the management of primary health care systems.
Another observation on PHC financing is on the overlaps in sub-components proposed to be funded by 15th FC grants, PMASBY and the existing NHM functions. 15th FC grants and PMASBY, both are supporting HWCs in rural and urban areas and block public health units. Although prioritization of primary health care is an affirmative step, this overlap indicates limited coherence in resource allocation planning. The timelines for allocation of resources for AB-HWC also need to be aligned with the AB-HWC target timelines (till 2022), as the 15th FC grants and PMASBY funds are provided over the duration of five (till 2026) and six years (till 2027) respectively. This would require changes in budgetary allocations through PMASBY and NHM.
Greater allocation of resources to primary health care is a measure of the relative prioritization of this important investment in human development and the health sector by policymakers. The increase in funding is a much-needed step towards strengthening AB-HWCs. Alongside it is important to strengthen other aspects of the health system such as capacity building of health workers, ensuring continuum of care, improving quality of care and investment in related social sectors. Together this will contribute to enhancing the wellbeing of people and building a strong primary health care system in India.
[1] The finance commission provides recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves for period of five years.
[2] Government of India launched the AB-HWC initiative in 2018 to provide comprehensive primary health care through upgraded primary health care facilities (sub centres in rural area and primary health centres in rural and urban area). Till date (as on 31st March 2021), 74,283 AB-HWCs (source: AB-HWC portal, MoHFW) have been operationalized as against the target of 1,50,000 HWCs to be established by December 2022.
[3] As per National Health Accounts 2016-17 report, expenditure on primary care includes the following- 1) Expenditures under preventive care under all healthcare providers, 2) All expenditures at Sub Centers, Family planning centers, primary health centres, dispensaries (CGHS, ESIS, etc., private clinics) except for those incurred for specialized outpatient care and dental care. Expenditures for general outpatient curative care at all healthcare providers including related diagnostic and pharmaceutical expenditures apportioned from where ever relevant, 3) Expenditures under all pharmaceuticals and other medical nondurable goods, therapeutic appliances and other medical goods purchased directly by the household, 4) Expenditures for inpatient curative care at all ambulatory centers including expenditures related to childbirth at Sub Centers, 5) Expenditures under rehabilitative care at offices of general medical practitioners, 6) Expenditures under all long-term care and Expenditures under patient transportation.