Utilisation, Fund Flows and Public Financial Management under the National Health Mission

This study provides insights on how institutional architecture for public fund flows affects budget execution. Using the case of the National Health Mission (NHM) in India, it highlights how the rules and procedures that govern release of public funds affect utilisation of budgeted resources. It analyses the utilization of NHM funds in 29 States, and documents the processes for fund releases from State treasuries to implementing agencies in Bihar, Maharashtra and Odisha. The study finds that on average, only about 55 per cent of funds allocated for NHM were utilised in 2015-16 and 2016-17. In Bihar and Maharashtra, this was partly due to significant delays in release of funds from State treasuries to implementing agencies. The delays were a result of complex administrative procedures associated with the release of NHM funds from State treasuries. The existence of implementing agencies outside the States’ administrative setup, and the rigid fragmented financial design of NHM has contributed to the complicated architecture of release processes.