This newspaper carried a news article last month saying that Nagaland State figures among the highest per capita health expenditure by the government. That was surprising when one considers the amount of resources which are actually available for service delivery. Therefore, it is important to do some analysis so that we can arrive at some sense of the prevailing reality of the health budget.
For the financial year 2015-16, there was slashing of the union health budget by 15%. The Lancet reported that as many as 15 national health programs were put under the National Health Mission umbrella during the year without allocation of even a rupee. The main reason for the cut was said be the rising fiscal deficit. Another justification given was that the States were allocated more shares in central taxes (from 32% to 42%). It was expected that the State will use its discretion and invest this money on healthcare. The ball for increasing health budget was thrown into the State’s court.
Slashing of central budget allocation on health (mainly through National Health Mission) has not been accompanied by commensurate increase in the State budget on health. The State’s budget allocation to health sector as a percentage of its total expenditure has reduced from 3.8% in 2014-15 to 2.9% in 2015-16. This is not a healthy trend that Health which is an important driving force for economic development should be ignored. India’s public health sector has always struggled for attention from policy makers and has performed poorly, except for a few States like Kerala and Tamil Nadu. Still that doesn’t say much about the high per capita spending on health which was in the news. The disaggregation of the State health budget will show under which heads the budget is being spent.
Although it can be true that per capita expenditure on health is high in Nagaland, the amount available for service delivery may be disproportionately low. This is because the disaggregation of the State budget shows that 87.5% of the State budget was spent on salaries in 2013-14 and in 2015-16, it is set to rise to a staggering 94.68%, which amounts to Rs. 321.75 crores. The nominal increase (in absolute value) in budget allocation over the years goes to salary increment. Thus, as far as the State’s budget is concerned, most of the expenditure goes to salary and very few is left for infrastructure development, materials and supplies, trainings, etc. The health service delivery in Nagaland is heavily dependent on central schemes and projects like National Health Mission and its flagship programs, and National AIDS Control Program. Cutting of health budget at the Centre, if not accompanied by increased State budget allocation to Health sector will make the health services delivery extremely difficult to improve or sustain.