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Analysis

Rs 10,290 Cr Boost For Health Hides Funding Cuts For Key Programmes

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Despite a Rs 10,290-crore increase in health funding for 2017-18, an investigation of the central government’s health budget reveals that most of this money is not being spent on India’s health priorities, which, instead, now face funding cuts.

Elimination of tropical diseases (kala azar, filariasis and leprosy) over the next two years; elimination of a vaccine-preventable disease (measles) by 2020. Elimination of tuberculosis (TB) by 2025; and “significant reduction” of infant and maternal mortality by 2020: These were some key proclamations related to health made by Union Finance Minister Arun Jaitley during his February 1, 2017, budget speech for 2017-18.

Given that India has an infant mortality rate (IMR) of 37 per 1,000 live births–or higherthan the average for 154 middle- and low-income countries–the world’s highest TB burden, with 27% of the world’s new cases, and accounts for 58% of new leprosy cases detected globally, Jaitley appeared to address some of India’s most significant public-health concerns. Adequate funding could lead to significant improvement in India’s health systems and health status.

But Jaitley’s budget indicates inadequate allocations or funding cuts to his declared priorities. Most of the Rs 10,290-crore increase will be spent on issues regarded as low priority: New medical colleges, new premier medical institutions and converting health sub-centres into “health and wellness centres”–but with no more than Rs 60,000 per centre annually.

The question then is, where has this additional money gone? To open new medical colleges, new premier medical institutions–while older ones languish–and converting 150,000 health sub-centres into “health and wellness” centres but without adequate funding.

Measles: Ambitious targets and a Rs 1,000-crore funding cut

To eliminate measles, India will need to invest in stronger immunisation systems and social mobilisation. Most countries that have eliminated measles have used some form of a campaign approach, as India has by starting the first phase of a measles-rubella vaccine campaign to immunise 35 million children in 2017 and 410 million children over the next two years, as this World Health Organization statement pointed out.

Has money been set aside to achieve these targets? It appears not.

The union health budget includes a separate head, the National Rural Health Mission (NRHM), to fund state rural healthcare. Within the NRHM budget is a sub head called the “Reproductive and Child Health (RCH) flexi-pool”, which sets aside funds for immunisation, including funding of the polio-eradication campaign. To improve healthcare in urban areas (where measles remains a significant problem due to high population densities), the central budget sets aside money under the head National Urban Health Mission (NUHM).

To fund the measles campaign and eliminate measles, funding under RCH flexipool (for rural areas) and under NUHM (for urban areas) should have been higher than previous years.

Instead, funding for the RCH flexi-pool has been cut 23%, by more than Rs 1,000 crore, from Rs 5,932 in 2016-17 to Rs 4,566 in 2017-18.

Similarly, funding for the National Health Mission, which aims to provide universal access to affordable and quality healthcare and funds both NRHM and NUHM, has been reduced by Rs 197 crore over a year.

TB: As deaths double, a Rs 13-crore cut in funding

India had double the number of estimated TB deaths in 2015–480,000, up from 220,000 deaths in 2014–because previous estimates were too low, as IndiaSpend reported in October 2016..

India has 27% of the world’s new TB cases–one of the biggest infectious disease killers in India. The country had 2.8 million new TB cases in 2015, up from 2.2 million cases in 2014, according to the World Health Organization’s Global Tuberculosis Report 2016.

In such times, moving the goal post from control to elimination makes sense. In January 2017, the Supreme Court also directed the government of India to move from alternate-day medication to a more effective daily regime. But this would be require a larger budget.

As we said, the union budget’s NHRM head provides for healthcare in rural India. Within this budget head is a sub-head called “Flexible Pool for Communicable diseases”, which includes funding for the Revised National Tuberculosis Program.

Now, funding appears to have increased by Rs 87 crore over a year to 2017-18, but the revised budget estimates–drawn up after the budget is presented–reveals a drop of Rs 13 crore over 2016-17.

Adjusting for purchasing power parity, the funds available for TB control would be even lower, which means there are no new investments at a time when the TB programme needs to be expanded.

Maternity benefit only for first borns; funding short by Rs 11,812 crore

In the 2017-18 budget, funding for Indira Gandhi Matritva Sahyog Yojna (Maternal Benefit Scheme) has risen 226%, from Rs 634 crore ($94.6 million) in 2016-17 to Rs 2,700 crore ($298 million) in 2017-18, but this allocation, as IndiaSpend reported on February 22, 2017, isn’t enough to cover all expectant mothers.

The government had estimated that the the annual requirement for this maternity benefit scheme–which provides iron and folic-acid supplements to pregnant women to prevent maternal anaemia, sepsis, low birth weight, and preterm birth–would be Rs 14,512 crore ($2.1 billion), according the report of the Standing Committee on Food, Consumer Affairs and Public Distribution (2012-13).

“At the rate of Rs 1,000 per month for six months, the scheme expenditure towards maternity benefits to 2.25 crore pregnant and lactating women works out to Rs 14,512 crore per annum,” said the report, quoted in the Indian Express on February 18, 2017.

So, the ministry plans to provide maternity benefits only to first-borns, leaving other children vulnerable.

Of Indian infants who died within 29 days of being born between 2010 and 2013, 48% were underweight or were premature. India has more than 3.5 million preterm births every year, more than any other country, IndiaSpend reported in November 2016.

So where has the additional Rs 10,290 crore gone?

India’s health budget, as we said, rose Rs 10,290 crore in 2017-18 compared to the previous year. While this appears higher than ever, it is inadequate to bring India–which currently spends less than 1.5% of gross domestic product (GDP) on health–close to a minimum desirable health spend: 2% of GDP. As we have seen, this additional money does not seem to have gone to the government’s priorities: Reducing infant mortality or control of TB and other communicable diseases.

Source: Union Budget, 2017-18; * Setting up of two more AIIMS; ** Revised estimates for 2016-17; *** Universal health insurance scheme

Rs 2,855-crore increase for new medical colleges in districts

A major increase in budgetary allocation has been towards more medical colleges at district hospitals, an increase of Rs 2,855 crores, accounting for about 27% of the Rs 10,290-crore rise in health funding.

India does need more medical graduates, but increasing medical colleges will not be easy, considering that even premier institutes, such as branches of the All India Institute of Medical Sciences (AIIMS), set up by ministry of health and family welfare, in state capitals are struggling. For instance, five years after the first batch was admitted, AIIMS Bhopal does not yet have a blood bank and does not conduct surgeries, and important faculty positions are vacant, The Hindu reported in January 2017.

Rs 1,525-crore increase for new AIIMS, while older ones struggle

That bring us to the other significant funding increase: Rs 1,525 crore more over 2016-17 forPradhan Mantri Swasthya Suraksha Yojna (the Prime Minister’s Health Protection Scheme), which is not the same as the more well-known Rashtriya Swasthya Suraksha Yojna(National Health Protection Scheme), which–confusingly–has been renamed the National Health Protection Scheme (more on this later).

The Pradhan Mantri Swasthya Suraksha Yojna is supposed to set up new branches of AIIMS in the states. In addition to the 11 that exist, Jaitley announced setting up of two more AIIMS, in Jharkhand and Gujarat.

Instead of opening new institutes, and investing about 8% of the health budget (Rs 3,975 crore of Rs 47,352 crore) to do so, the government should ideally focus on making sure that the ones already opened are functioning.

Rs 3,000-crore increase to convert health sub-centres to health and wellness centres

Another significant increase of about Rs 3,000 crore is under the “Health System Strengthening” sub-head of NRHM. This is likely to be allocated to another pronouncement: Converting 150,000 health sub-centers nationwide into “health and wellness centres”.

Again, this is not a bad idea, since functional sub-centers can take primary healthcare closer to where people live. But with no plan for this transformation made available–not even how many will be converted this year–Rs 3,000 crore appears inadequate.

For example, even if 25% of the increased allocation under this sub-head is to upgrade sub-centres, no more than Rs 60,000 would be spent per sub-centre.

So, while the current budget’s health proclamations are apt, the funding increases for issues of low health priority are unlikely to make a significant impact on the overall well-being of India’s people.

Correction: We had earlier said that India accounts for 27% of new leprosy cases detected globally. The correct datum is that India accounts for 27% of the world’s new tuberculosis cases and 58% of new leprosy cases detected globally. We regret the error.

(Mohan formerly coordinated health and nutrition programmes for UNICEF’s country office in India and is the co-founder of Basic Healthcare Services, a nonprofit that offers low cost, high quality primary healthcare in rural under-served communities. He is also Director, Health Services, of Aajeevika Bureau, a nonprofit that provides services to labour-migrants.)

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Analysis

BJP needs to rein in the Hindutva hotheads

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Narendra Modi

The rise in the growth rate to the moderately satisfactory 6.3 per cent from the depressingly low 5.7 per cent is good news for the Bharatiya Janata Party (BJP) at a time when the Prime Minister reminded the audience at a function organised by a media house about former President A.P.J. Abdul Kalam’s observation about the negativism which generally marked newspapers and magazines.

Narendra Modi’s case for a more positive outlook in the media and the country will seem more credible in the context of the latest growth figures if only because they highlight the mistake of those like former Finance Minister Yashwant Singh of the BJP, who have been lamenting (perhaps with a touch of schadenfreude) about the economy’s free fall.

As Finance Minister Arun Jaitley has said, the country’s emergence from the recent slump means that it has got over the twin blows of demonetisation and the Goods and Services Tax (GST), which were expected by Modi’s critics to spell his doom.

The turn for the better in the economy has come at the right time for the BJP when its frenetic campaigning in Gujarat with Modi addressing 30 meetings in a fortnight and with as many as 40 cabinet ministers camping in the state, pointed to a measure of uneasiness in the party about its prospects in what is widely regarded as its bailiwick.

However, considering that the BJP’s success in Gujarat and Himachal Pradesh is almost a foregone conclusion, one can say that the rise in the growth rate will not make much of a difference to the outcome. All that it can do is to dampen some of the ardour of the ruling party’s opponents.

Even then, the point remains that the BJP will face its real challenge not in Gujarat or Himachal Pradesh this month, but in Rajasthan, Madhya Pradesh and Chhattisgarh next year. It is in those elections, where the BJP will encounter the anti-incumbency factor, that it will become clear whether the rise in the growth rate has helped the party or is of little consequence.

The reason for the doubts is that it is not clear to what extent the unemployment problem will be mitigated by the climbing growth rate in these days of automation and artificial intelligence.

Equally uncertain is the quantum of the impact on the BJP’s hopes as a result of the prevailing tension and uncertainty caused by the crime rate — and especially the safety of women and even children.

The effect of the rampaging Hindutva hardliners declaring bounties on the heads of actors and directors is another unknown factor whose effect will be known only after the votes are counted.

Up till now the BJP has been sitting pretty because its “vikas” (development) plank still has many takers even if it hasn’t made a perceptible dent on the unemployment scene. In addition, Modi’s personal popularity remains high because of his oratorical skills and the impression he conveys about the seriousness of his intent to take the country forward.

In contrast, his opponents lack an agenda which can have an inspiring effect and are bereft of leaders capable of drawing enthusiastic crowds although Rahul Gandhi is showing signs of the old Nehruvian appeal.

The opposition depends therefore on, first, the economy continuing to be sluggish and, secondly, on the Hindutva hotheads creating a ruckus. But such an approach is obviously a negative one, as is also banking on the anti-incumbency factor to undermine the BJP-run state governments. There is little hope, therefore, for the opposition if it cannot adopt a positive attitude with a clear projection of the kind of India which it envisages.

For the BJP, on the other hand, it is a tug-of-war between vikas and the hotheads. As long as the economy shows signs of buoyancy, it can expect to be home and dry. It is of the utmost importance for it, therefore, to ensure that the recovery doesn’t flag and that the country regains its status as the fastest-growing economy in the world.

At the same time, the party cannot allow the loonies in its ranks, who include ministers, to run amok. It does not reflect well on a government when the apex court has to direct the states to check cow vigilantes or tell senior politicians in the ruling dispensation to keep their mouths shut on yet-to-be released films lest they influence the censor board.

As it is, the impression persists that the government is not too comfortable with the autonomy of established institutions as could be seen from the official directive to the University Grants Commission (UGC) to ensure that students and teachers did not miss Modi’s “life changing” speech on the occasion of Deen Dayal Upadhyay’s centenary celebrations and Swami Vivekananda’s 125th birth anniversary last September.

If the government does not want the UGC, the Central Board of Film Certification (CBFC) and other autonomous bodies to become “caged parrots”, as the Supreme Court once called the Central Bureau of Investigation (CBI), then it has to desist from enforcing regimentation and stopping the saffron extremists from targeting artistes and all those who are not with the BJP. Otherwise, growth rate alone will not prevent the erosion of its popularity.

By : Amulya Ganguli

(Amulya Ganguli is a political analyst. The views expressed are personal. He can be reached at [email protected] )

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Analysis

India in the global matrix: We must deepen bilateral relations with Japan and the US

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Kapil Sibal
US Secretary of State Rex Tillerson calls on Prime Minister Narendra Modi in New Delhi (File Photo: IANS/PIB)

With the dismantling of trade barriers and the exponential increase of cross-border economic activity, the nature of the global economy has changed. This reality has necessitated nations to reorient the thrust of their foreign policy objectives.

The rise of an assertive China, the new Czar on the horizon, has to be reckoned with globally. In this context, US Secretary of State Rex Tillerson’s visit to India on October 24, 2017, assumes significance. A week before this visit, Tillerson had described the Indo–US strategic relationship as “bookends of stability on either side of the globe”. Shared values, commitment to the rule of law, freedom of navigation and free trade are the four pillars of this evolving bilateral narrative.

China’s emerging status is also reflected in the first meeting of a quadrilateral dialogue on the sidelines of ASEAN summit in Manila on November 12, embracing India, Australia, US and Japan to protect global commerce by espousing a rule-based approach to the commons and freedom to navigate in the South China Sea, the Indian Ocean across to Africa. This was an idea that Japanese Prime Minister Shinzo Abe had earlier floated in 2007. Both US and Japan believe that the time has come to respond not just to Beijing’s assertive behaviour, but also to counteract its OBOR — One Belt One Road initiative.

It would, however, be naïve of India to think that the US will be willing to directly involve itself in the Asia Pacific region. The US, under Trump, would rather prefer New Delhi to counterbalance Beijing rather than involve itself directly in the region. The $309 billion US trade deficit with China in 2016 in the context of $648 US goods & services trade makes for economic interdependence, which might override other considerations. Besides, the US requires Chinese influence in containing North Korea along with other issues of global concern and significance wherein both the US and China need to collaborate. In the circumstances, it will be difficult for the US to involve itself in the Asia Pacific region in any substantial way. Yet, the increasing proximity between Pakistan and China in building the China Pakistan Economic Corridor (CPEC) requires US to further build on its strategic partnership with India, expecting India to become a significant player in Afghanistan and a key partner in its outreach to the Asia Pacific region. At the same time, US troops in Afghanistan rely on Pakistan for logistical support, transit and Islamabad’s influence with the Taliban and its affiliated Haqqani network. On the other hand, during talks with President Xi Jinping on the fringes of the G20 Summit in Hamburg in July, 2017, Shinzo Abe expressed Japan’s intention to participate in China’s OBOR initiative. Japanese $270 billion bilateral trade volume with China is not insignificant apart from investments of 20,000 Japanese firms in China.

In the currents and crosscurrents of political imperatives and economic realities, India has to tread very carefully. The recent standoff at Doklam, our decision not to participate in China’s Belt and Road initiative, the lack of any perceptive movement in resolving our boundary dispute with China and its increasing proximity with Pakistan, apart from the fact that China, through investments, is making inroads in Myanmar, Sri Lanka and has the economic clout to benefit Nepal, are matters of great concern. At the same time, Chinese investments in India are on the rise. The Chinese are targeting key sectors of the economy including power, telecom, engineering, and infrastructure. Washington’s new South Asia policy has not gone unnoticed by the Chinese, who believe the US intends to turn New Delhi into a stronghold to counterbalance Beijing. The Chinese are not willing to swallow anything that undermines their interests.

New Delhi must, therefore, be careful in openly aligning itself in any quadrilateral partnership. It needs to continuously engage with China to resolve bilateral issues. Any attempt to openly align itself with any anti-China alliance will only exacerbate our relations which we can ill-afford, considering our skewed bilateral trade balance. Additionally, our economy is yet to achieve the robust rate of economic growth, which alone will give us the self-confidence to deal with issues that are likely to confront us in the future.

We need to deepen our bilateral relations with Japan as well as the US, and leverage that relationship consistent with our national interest. Our confluence of interest with the US can help ensure constructive initiatives in the Asia Pacific region and help us in deepening our relationship with Afghanistan. We must recognise that despite the warm ties between India and the US, no significant benefits have ensued in terms of our becoming a permanent member of the Security Council or the US pressurising Pakistan to ensure that its territory is not used as a springboard for terrorist activities in India. The growing proximity of Russia and China, as well as Russia’s developing economic involvement in the area of energy and defence in Pakistan, is evidence that in foreign policy, it’s the confluence of interests in a given time frame that matter.

India, today, does not have the luxury to be part of any alliance but needs to leverage its relationships both with the democratic world and in and around our neighbourhood to protect our self-interest.

The author is a member of the Rajya Sabha, and a senior Indian National Congress leader. Views expressed are personal.

Courtesy: This Article is published in the DNA on 20th November 2017.

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Analysis

Demonetisation failed litmus test as most banned notes returned

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demonetisation death

(‘Note-Bandi: Demonetisation and India’s Elusive Chase for Black Money’ is an upcoming book from Oxford University Press dedicated to the “memory of Indian citizens who lost their lives due to demonetisation”). Excerpts from a chapter.

The litmus test for the success of any demonetisation is the amount of cash that does not return to the banking system. For long, economists and observers were intrigued by the refusal of the RBI to share data on SBNs (Specified Bank Notes) returned to banks after December 10, 2016.

Information on SBNs returned was important because any amount not returned to the banking system was supposed to be ‘black money’, which could be ‘extinguished’ by the RBI… Consequently, the RBI could pass over an equivalent amount to the government, which in turn could spend it for welfare purposes.

The government’s expectations were shared by the Attorney-General of India, Mukul Rohatgi, with the Supreme Court. According to Rohatgi, the government did not expect more than Rs 12 lakh crore to be returned to the banks, which implied that about Rs 3 lakh crore worth of ‘black money’ was to be extinguished and passed over to the government.

Image result for demonetisation disaster urjit patel

As demonetisation proceeded, these hopes stood belied. To begin with, (RBI Governor Urjit) Patel was forced to clarify on December 7, 2016, that “the withdrawal of legal tender characteristic status does not extinguish any of the RBI balance sheets … They are still the liability of the RBI”.

On December 8, Revenue Secretary Hasmukh Adhia told journalists that “the expectation is that the entire money which is in circulation has to come to the banking channel”. In other words, the pace at which SBNs were being returned to the banking system had convinced the government that there would be no currency left to extinguish. By December 10, Rs 12.44 lakh crore worth SBNs had already returned to the banking system.

Related image

The government staunchly refused to share any figure on SBNs returned after December 10. Instead, it attempted to obfuscate facts and confuse the public with convoluted stories of ‘double counting’. On December 15, (Economic Affairs Secretary Shaktikanta) Das told the media that data on SBNs returned were being withheld because the RBI suspected ‘double counting’ of currency notes.

Das’ statement was soon shown to be wrong.

There were two ways in which returned SBNs could be counted. One, through the simple addition of the cash position of individual banks with respect to the SBNs returned. There could be double-counting here, as banks without currency chests may have deposited cash with banks that had currency chests.

Two, directly from the currency chests, in which case there was no scope for double-counting. (Deputy Governor of RBI Usha) Thorat, in an interview, pointed out that “there is no question of double counting… RBI only looks at the currency chest data”.

In an interview with the Economic Times, Rajnish Kumar, the Managing Director of the SBI, further clarified this in no uncertain terms: …currency chest position is the correct position, there cannot be any flaw in that … double counting can only happen if the individual banks and post offices are reporting the deposit position … but [in] currency chest reporting which is done every day and which is an automated process, the possibility of any discrepancy does not exist … If the Reserve Bank has given the number based on the currency chest position, then there should be no discrepancy. But if the data is given on the basis of daily reports of deposits being given by the bank, then there is a possibility of some double counting.

In its regular media briefings, the RBI was indeed providing SBN data from currency chests and not by adding the cash positions of individual banks. The RBI’s Deputy Governor R. Gandhi told the media on December 13, 2016, that “specified bank notes of Rs 500 and Rs 1,000 returned to the RBI and currency chests amounted to Rs 12.44 lakh crore as on December 10, 2016 “.

Yet, the RBI was to state on January 5, 2017, that “figures [on SBN] would need to be reconciled with the physical cash balances to eliminate accounting errors/possible double counts”. The effort, clearly, was to hide.

It was only in August 2017 that the RBI, ultimately, released the final figures of the SBNs returned. According to the RBI’s Annual Report for 2016-17, out of the Rs 15.44 lakh crore worth of currency in circulation as on November 8, 2016, Rs 15.3 lakh crore had returned to the banking system as on June 30, 2017. In other words, 98.96 per cent of the SBNs was back in the banking system and only 1.04 per cent of the SBNs remained outside.

The verdict was finally out: As most critics predicted, demonetisation had failed to extinguish any amount of money that could be alleged as ‘black’.

By R. Ramakumar

DISCLAIMER : Views expressed above are the author’s own.

(R. Ramakumar is Dean, Centre for Study of Developing Economies, School of Development Studies, Tata Institute of Social Sciences, Mumbai. He can be reached at [email protected])

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