Has Covid-19 made a unified response to a national crisis the new normal?

While the Centre and the states have been nimble in launching joint action plans to contain the disease, there is sceptism that this is just a one-off

The 31st of December is usually reserved for a quiet celebration in many government offices in Delhi. It was going as per plan at the National Centre for Disease Control (NCDC), an often easy-to-miss office of the ministry of health, located at Sham Nath Marg in North Delhi. It gets overlooked since it is not a hospital though it takes the leading role in investigating disease outbreaks all over the country.

“We got an update from the WHO China Country Office about 41 deaths from a new disease. Normally, such a small number from a country like China would not set alarm bells ringing,” said Sujeet Kumar Singh, Director of NCDC. But that it came from WHO was a cause for concern—it “informed of cases of pneumonia of unknown etiology (unknown cause) detected in Wuhan City, Hubei Province of China”. It was enough to scupper plans for a celebration.

NCDC officials immediately began to reach out to their state offices to apprise the respective governments. Centre and state government cooperation is an often fraught exercise, but in this case the mutual support turned out to be a most timely move. The letters began to go out by January 7 to the state capitals to provide information about the gravity of the challenge. Speaking with The Print, WHO chief scientist Soumya Swaminathan underscored the swiftness of response: “By 30 January, India had set up all the committees and states were already screening travellers from China.”

Even as foot soldier NCDC was nimble, the larger government of India has also been surprisingly adroit. The union cabinet cleared a Rs 15,000 crore Covid-19 package in less than two months. Most significantly in India’s legislative history, the cabinet has given the health ministry the freedom to switch expenditure around among priorities without having to go to Parliament each time.

Is there going to be such nimble and unified decision-making for health policies in India from here on? During Covid-19, both the states and the centre have cooperated in joint action plans for the sector. Or would this remain an exception?

There are reasons for scepticism. The latest audit report on central government fund transfers to states shows that in the year 2017-18, a massive Rs 5,927 crore remained unspent on programmes like National Rural Health Mission and upgrading of state government hospitals, among others. At 6.8 per cent of the centre’s unspent money (one of the largest among departments) as the Comptroller and Auditor General  report shows, it recurs every year. Yet, as the centre and the states scramble to face the Covid-19 pandemic it is so apparent that money should have not gone unspent in the upgradation of state government hospitals.  

These weaknesses could be significant roadblocks to efficient spending of more money in health, especially in a year when it is clear the sector will certainly get much more funds from the Centre. Health is on way to becoming the key social sector for which the Centre will open its purse. The freedom given to the health ministry to spend Rs 15,000 crore shows the trend.

This will, of course, pull up the Centre’s revised estimate for health expenditure from the levels of 2019-20 sharply. It was Rs 63,830 crore, way behind spending on education at Rs 94,854 crore. That pecking order will certainly change this year. More so as the centre will almost certainly pick up some of the tab for the states, who are staring at fast emptying pots and few ways to replenish those.

For instance in the auction for six state government papers last week, the yields or the risk premium they had to offer soared close to 90 basis points (a basis point is one hundredth of a percent) above central government bonds. Effectively the states with far less capacity than the centre were asked by the markets to pay a far higher price for their borrowing from the markets, wracked by the Covid-19 scare. The risk aversion by banks and other financial institutions is extreme.

Sumit Bose, former finance secretary says, “In the circumstances the centre will have to find out more money to finance the higher expenditure by the states to build up their health infrastructure".

Yet as the centre spends more money, it is likely to ask for more compliance from the states about how the scarce money is spent. This could irritate the states, particularly those in the South which have delivered impressive health results.  

Under-spending by states:

Just providing money may not be adequate however. Shamika Ravi, senior fellow of Governance Studies Program at the Brookings Institution, Washington D.C,, who has been studying India’s health sector keenly for years says “the paradox is states that have better governance structure develop better health spending. It typically means states with the largest health prescription have the lowest ability to spend the money well”.

Data backs up her assertion. States like UP, Bihar or Madhya Pradesh typically spend less than what they plan to do in the health sector. In 2017-18, Bihar spent 11.7 per cent less  than its planned health budget for the year. The numbers got bumped up by Rs 1,905 crore in 2018-19 because of an additional allocation towards National Health Mission and Ayushman Bharat Scheme. Both of these are central government schemes. Similarly Madhya Pradesh has spent 7 per cent less on health than what it planned to do in 2018-19. Without those central schemes the level of underfunding would have been higher.

These states have abysmal health conditions which should normally spur more spending to fill up the gaps in the sector. “I cannot imagine a more productivity raising capex than spending on the health sector”, Ravi says. But that is just where these states are lagging. The unspent funds from the centre’s share as the CAG report points out, shows the scale of the problem.

Does this make out a case for larger but more centralised spending on health care? Health is a state subject in India unlike education which is on the concurrent list. So the centre can bring in more changes in the latter than in the former. Even though the allocation for the health budget will certainly increase in the current circumstances, Bose does not think there is any need to make health an item in the concurrent list. "Is it a case that the centre is hamstrung in pushing for health spending. I do not think so," he says.

Too many programmes

In the absence of spending freedom the centre has often satisfied itself by creating state specific or disease specific programs and allocated money for those. The financing of those programmes have mostly been in the ratio of 60:40 between the centre and the states as in the case of Ayushman Bharat Pradhan Mantri Jan Arogya Yojana. Since states retain the right to join or opt out the pan-Indian coverage of the scheme has not been possible to project it as a national health cover for all Indians even at this critical juncture. The multiplication of schemes however mean there is limited budget for others. For instance, NCDC has a budget of just Rs 72.5 crore in 2016-17 to chase epidemics across the country.

“While the education budget is largely delivered under a few major programmes like Sarva Shiksha Abhiyan, the health sector is fragmented with far more programmes,” says Bose. A Parliament reply offers a list of 38 such programmes , many with their sub programmes. “The Central Government supplements the efforts of the State Governments in delivery of health services through various schemes of primary, secondary and tertiary care”, it explains.  

Ravi points her finger at a different problem. “States like Kerala and Tamil Nadu are certainly delivering impressive outcomes in the current pandemic”. She says this can be measured from the way these states have kept the fatality rate low despite comparable level of infections with other states. It will not be fair, she argues if the centre were to impose its plan on these states.

The centre has therefore begun to move keeping these differences in perspective. While the states are deciding on the hotspots as well as the methods to ensure they remain under lockdown, the centre is providing the finance and the central police forces to supplement the effort. “There was a template of cooperation. It was not particularly new, we had got experience with programmes like National Health Mission (NHM) earlier”, said a central government source. In NHM, the actual rollout of the scheme to insure all people was the mandate of the states, with the centre acting as the monitor. “It is not unusual for us. The only addition is the involvement of the police forces this time”, said the source.  

Between the two ministries too the cooperation was relatively easy as both deal with essentially state subjects, policing and health. To make matters simpler the health ministry has also been signed the role of a nodal department for interventions by other central ministries too.

To keep the engagement on, meetings at every possible level of the centre has been made an ongoing feature with the state governments. “It stretches right down from the Prime Minister engaging with the chief ministers, the cabinet secretary with the chief secretaries and health ministry meetings with each health secretaries, on almost every alternate day”, said the source. On Monday, Modi met the chief ministers again to understand how long they want the lockdown to continue beyond May 3.

“At every step the states were kept on board like checking of passengers arriving at airports, first from China and then elsewhere”, said Singh. That we are somewhat comfortable today means this model can certainly be replicated in future”, he added.

Indira Behara, Senior Director at Global Health Strategies suggests this is the maximum level of cooperation possible at present. Behara has been chasing the challenge of Tuberculosis eradication in India, for decades. She also points to the asymmetrical knowledge level of the high performer to low performer states in handling health issues. “In Kerala, because of the decentralised system of administration, local officials know how to set priorities. This is a model that might not apply to the states where a similar level of decentralisation has not been adopted”.

Significantly the Rs 15,000 crore Covid-19 Emergency Response and Health System Preparedness Package cleared by the cabinet to help states, does not ask the states to offer a matching grant. All other health schemes do so. It allows for switching of expenditure by the health ministry without going to Parliament. It is unprecedented. “The ministry of health…has been authorized to re-appropriate resources among components of the package and among the various implementation agencies…as per the evolving emergent situation”.

"The Centre needs to spend more, whether for existing challenges like Malaria concentrated among a few states, or tuberculosis which is more widespread. But offering states the flexibility to tailor their responses will be most necessary," says Behara.