Share of Central Health expenditure under NHM reduces as government launches new health schemes
Sai Krishna Muthyanolla
February 19, 2022
The National Health Mission (NHM) has been the flagship health initiative of the government for many years now. In fact, the National Rural Health Mission (NRHM) was launched in 2005. Data of central release of funds under the NHM indicates that the share of central health expenditure under NHM has reduced over the years as the government has launched new health schemes.
The COVID-19 pandemic highlighted the gaps in health infrastructure in the country, more importantly, the state of public health infrastructure. The devastating second wave of COVID-19 in 2021 put the health infrastructure under severe strain and also exposed the uneven standards of healthcare infrastructure across states.
Successive governments launched & implemented multiple initiatives to improve the public health infrastructure & services. The National Health Mission (NHM) is the flagship health initiative that aims for the attainment of universal access to equitable, affordable, and quality health care services that are accountable and responsive to people’s needs. The NHM was launched by the Government of India in 2013, subsuming the existing National Rural Health Mission (NRHM) and launching a new National Urban Health Mission (NUHM). The NRHM was launched in 2005.
While the budget allocation for NHM has increased, its share in health expenditure has been reduced
As per union budget 2022-23, the actual expenditure towards NHM in 2020-21 was Rs. 37.48 thousand crores, which is higher than the revised estimate of Rs. 35.5 thousand crores, which in turn was higher than the initial budget estimate of Rs. 34.1 crores.  This is a continuation of the trend observed in earlier years, where the actual expenditure on NHM is higher than both the budget & revised estimates.
Over the years, the revised estimates for NHM have always been more than the budget estimates while the actual expenditure exceeded even the revised estimates. However, contrary to this trend, the revised estimates for 2021-22 are less than the budget estimates.
The actual expenditure on the NHM increased by 64% during the five-year period 2016-17 and 2020-21. During this period, the actual expenditure of the Ministry of Health & Family Welfare (MOHFW) more than doubled from Rs.38.9 thousand crores in 2016-17 to Rs. 80.7 thousand crores in 2020-21. Though NHM is the largest component of the expenditure incurred by MOHFW, its share in total expenditure of the ministry fell from 58.6% in 2016-17 to 46.4% in 2020-21. A portion of this fall can be attributed to Rs. 11.9 thousand crores spent towards managing COVID-19 in 2020-21. Nevertheless, the share of expenditure on NHM of the total expenditure of the ministry has been declining over the years.
As per the revised estimates for 2021-22 & 2022-23, the share of NHM is expected to fall further. The increase in spending on other schemes has resulted in the fall of NHM’s share. Schemes such as the Pradhan Mantri Jan Arogya Yojana (PMJAY), Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), & the newly introduced Pradhan Mantri – Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) have seen increased allocations in the last few years.
UP, Rajasthan & MP among the states with most central funding under NRHM
In 2019-20, a total of Rs. 27.99 thousand crores were released by the Centre to States & UTs under the NRHM. Out of this, the greatest amount was released to UP (Rs. 4.63 thousand crores), which is 2.5 times more than the amount released to Rajasthan which received Rs. 1.75 thousand crores and is second in the list of states with the most amount released under NRHM.
Assam, Madhya Pradesh & West Bengal are among the top-5 states receiving the greatest amount in 2019-20. The top-10 states make up 66% of the total amount released by the centre under NRHM in 2019-20.  Since these 10 states are among large states in the country, higher release to them is understandable.
In 2020-21, UP received lower than the amount released in 2019-20 but was still the recipient of the greatest amount under NRHM among all the States. On the other hand, most of the other states have seen an increase in the amounts released to them under NRHM in 2020-21 compared to 2019-20.
For 2021-22, only 36% of the allocated funds towards NRHM were released by the Centre as of 24 November 2021.  The greatest amount was released was to MP, followed by Bihar & Assam.
MP & Maharashtra spent proportionately higher amounts than received from the Centre
NHM is a Centrally sponsored scheme i.e., a proportion of the overall outlay (60%) is given by the Centre and the rest 40% is met by the states. The total expenditure of the States for NHM each year is the sum of the Central release during that year, State releases during the year and any unspent balance at the beginning of the year. Hence the total expenditure of the states towards NHM would be more than the central release.
UP, the state with the greatest amount of central release under NRHM also reported the greatest total expenditure under the scheme. However, the order of the other states in terms of total expenditure under NRHM is not the same as their place in the amount of central release.  Assam & Rajasthan which are among the top three states in terms of central funding rank lower in terms of total expenditure under NRHM. In contrast, Maharashtra, which ranks lower in terms of the amount received from the Center, has spent more under NRHM. The same can be said about Tamil Nadu, AP & Karnataka. The spending towards COVID-19 management in 2020-21 could be one of the reasons for this trend as some of these states were badly affected by the pandemic.
Maharashtra, UP & Tamil Nadu are among the states to receive a higher allocation from the Centre under NUHM
As is the case with NRHM, the ranking of the states in terms of central release of funds and the total expenditure of the state varies for NUHM.  In 2019-20 & 2020-21, Maharashtra tops the list of the states with the greatest central release under NUHM. However, in terms of total expenditure, UP spent the most.
While the funds received from the centre by Maharashtra has remained nearly the same in both the years, the total expenditure towards NUHM has increased in 2020-21. Maharashtra being the worst affected state by COVID-19 could be the major reason.
Andhra Pradesh is another state which also has reported a substantial increase in expenditure in 2020-21 compared to 2019-20.  The central release of funds towards NUHM has not increased even during 2020-21. The total expenditure incurred by states increased from Rs. 1.6 thousand crores in 2019-20 to 1.79 thousand crores in 202021, mostly due to the increase in expenditure by Maharashtra, AP, WB, Telangana & Kerala.
As of 24 November 2021, only a fifth i.e., Rs. 201.9 crores were released by the Centre for 2021-22, out of the allocated Rs. Thousand crores.
10.9 thousand 24*7 PHCs, 1.6 thousand Operational Mobile medical units among the achievements of NHM
In a written reply provided in Lok Sabha on 17 December 2021, the Government of India highlighted the following achievements under NHM.
Th reply by the government also provides the physical achievements under NHM.
While directly not attributing it to the NHM, the government also highlighted the COVID-19 related initiatives. It has also highlighted the PM-ABHIM scheme, which was mentioned earlier in this story.
Featured Image: Share of Central Health expenditure