02.02.04.02. Who is responsible for deciding how much funding is available for health care? | India

02.02.04.02. Who is responsible for deciding how much funding is available for health care? | India

06 Jul 2022

The federal structure of the country and the recognition of health as a state subject implies that both centre and the states decide how much should be spent on health. States depend on central funds for many of the health programmes. While most of the taxation powers are with the central government (for example income tax), the bulk of spending on health is done by the states. Thus, transfer of resources from the central government to the states is a critical part of the overall financing arrangement, and the Finance Commission – set up every 5 years to indicate principles of allocation of divisible taxes as well as the share between central government and the states – is a key entity that recommends how much additional funds should be allocated to the states and how these should be distributed across states. However, recommendations of the Finance Commission are not binding for the central government (Finance Commission India, n.d.; MoHFW, 2017).

References:

Finance Commission India. (n.d.). Finance Commission. Government of India. Available from:  https://fincomindia.nic.in/

Ministry of Health and Family Welfare. (2017). National Health Policy. Government of India. Available from: https://www.nhp.gov.in/nhpfiles/national_health_policy_2017.pdf