Is Ayushman Bharat Facing A Funds Squeeze?

The Pradhan Mantri Jan Arogya Yojana (PM-JAY) popularly known as ‘Ayushman Bharat,’ is receiving a lesser slice of the pie than it it has demanded from the Centre.

The scheme’s budget has been slashed by at least ₹800 crore, official sources told BusinessLine. While the National Health Agency (NHA) — the implementation agency of PM-JAY — had demanded ₹7,400 crore to meet the expenditure for 2019-20, the Ministry of Finance initially agreed to allocate close to ₹ 7,200 crore. But, around 10 days ago, the Ministry of Health and Family Welfare (MoHFW) wrote to the Ministry of Finance asking it to further cut down PM-JAY’s budget as it was eating into the funds meant for other schemes.

“The Finance Ministry accepted MoHFW’s plea and further reduced PM-JAY’s budget to nearly ₹6,400 crore,” a senior health official said.

While the NHA implements PM-JAY, the National Health Mission (NHM) implements a majority of health schemes like immunisation, setting up health and wellness centres, managing communicable and non-communicable diseases and so on. Separately, the NHM had demanded ₹35,000 crore in 2019-20, of which the Finance Ministry has sanctioned ₹26,945 crore.

“Current year’s sanctions are close to 23 per cent less than what we demanded, yet it is a seven per cent hike from what NHM was allocated last year, which was ₹ 25,155 crore,” a senior NHM official stated.

After the funds were slashed, the sentiment in the NHA office was subdued.

An official said: “Given the way we are ramping up beneficiaries, and also as more States join in, we expect to spend up to ₹12,000 crore in 2019-20, 60 per cent of which — ₹7,200 crore — is the Centre’s share. We need these funds.”

Struggle for funds

The scheme has been struggling for funds in the current financial year (2018-19) too. Ayushman Bharat was announced in last year’s Union Budget and the Cabinet had allocated ₹3,135 crore for 2018-19 (funds that will be sufficient till March this year), but officials confirmed that this allocation has been reduced to ₹2,400 crore.

“Of this reduced amount, ₹1,000 crore for up to March 2019 is yet to be received by us,” said the official.

Slow inflow of funds is delaying the Centre’s payments to States. Up to 28 States and Union Territories are on board currently, and at least 14 States have sent multiple emails to the NHA requesting release of funds due to them. “Till date, the Centre has released close to ₹766 crore to States, but has not been able to pay the current additional liability of over ₹1,700 crore,” the official stated.

Strain on States

Tamil Nadu had written to the Centre requesting reimbursement of close to ₹360 crore, which it paid as premium, on behalf of the Centre, to United India Insurance, earlier in January. “Till date, we have received only a tenth of the total funds demanded from the Centre. They have paid us ₹25 crore for premium amount and ₹11 crore for covering administrative costs, a total of ₹ 36 crore. We are operating the scheme on State funds,” said P Uma Maheshwari, TN Health Systems’ project director.

In another instance, Madhya Pradesh had demanded over hundred crore but has been given ₹15 crore till date. NHA officials fear that non-disbursement of central funds in a timely manner can have a domino effect if States cease to co-operate.

“It may have a staggering effect on last-mile delivery to the patient, if States, and then hospitals that provide services, are not paid on time. This was the biggest grouse in the Rashtriya Swasthya Bima Yojana too, the scheme that preceded PM-JAY,” said the NHA official.

The MoHFW has been kept on a tight leash by the Ministry of Finance despite demanding more budget.

Last year, the MoHFW had demanded over ₹70,000 crore to meet its expenditure, but was allocated ₹52, 800 crore (a decrease of 24.57 per cent). “This year, we have demanded up to ₹80,000 crore,” a senior official said.