Rambling notes on Union Budget 2008

Ramon Magasasay once said: "Those who have less in life should have more in law."

Era Sezhiyan, A former Member of the Lok Sabha says, "While the Budgets are growing richer and richer, the poor are growing poorer and poorer without having any worthwhile share in the benefits of budgeting and the government expenditures.
In India, those who have less in life have much less in law. "

How long will it take, for the fury of the long-suffering masses to explode?



The Finance Ministers of India: First row: R.K. Shanmukham Chetti, John Maththai, C.D. Deshmukh, T.T. Krishnamachari, Jawaharlal Nehru and Morarji Desai. Second row: Sachindra Chaudhuri, Indira Gandhi, Y.B. Chavan, C. Subramaniam and H.M. Patel. Third row: Charan Singh, R. Venkatraman, Pranab Mukherjee, V.P. Singh, and Rajiv Gandhi. Fourth row: N.D. Tiwari, S.B. Chavan, Madhu Dandavate, Yashwant Sinha, Manmohan Singh and P. Chidambaram.

Union Budget 2008 will be announced on 29th February 2008. "The Budget for 2008-09 will be the least taxing (no pun intended!) for the Finance Minister, P. Chidambaram, in several respects and for various reasons." The budget document is not only a statement of its accounts but also a charter of the government’s economic policies. These policies are reflected at the macro-level in instances like allowing of 51% foreign direct investment in certain sectors in 1999 by Manmohan Singh to the micro level in 1962 when Morarji Desai specified the number of matchsticks(50 in each packet) that a matchbox could contain in order to get excise exemptions.

Given the fact that the Finance Minister is formulating his last budget in the backdrop of a good economic performance of nine percent growth and the upcoming parliamentary elections, he is expected to announce seemingly socialist programmes. These would include token measures in the field of education, health and water concerns.

Hospitals and doctors must be brought in the service tax net. Also the Minister must not cave in to pressure from Bar Associations and to his own bias towards his and his wife's profession by imposing service tax on advocates in this Budget and treat them at par with the other professionals in the country.

Indeed any doctor and advocate who earns more than Rs 800,000 in a year, can definitely afford to pay the service tax.

The Telegraph talked of how Budget can go Nano:

2008 is the year of the Nano, and by now, Nano has come to stand for anything that is small — small in size and small in means. In keeping with the trend, this year’s budget is going to be a Nano budget. Lest readers misunderstand, one must quickly add that there has been no official proposal to curtail the lengthy budget speech. But when budget-minister P Chidambaram went to meet his party colleagues at 24 Akbar Road, the message was loud and clear: aam aadmi is passé, zero in on the garib aadmi. The latter, Chidambaram was told, was not getting the benefits of the 9 per cent growth rate of the GDP. Here’s what the Nano-budget might contain: a Nano loan-waiver programme for small farmers, and a Nano housing scheme (with Rs 1 lakh houses, silly!). So what happens to the aam aadmi, and aurat for that matter? He and she must Nano-ize their aspirations, what else? And hope that the GDP growth rate doesn’t go the Nano way.

The Economic Times carried a piece Men who shaped up India's economy

India had as many as 30 finance ministers after it secured independence from imperialist British rule in 1947. And, these gentlemen shaped up India’s economy which has grown in size to about US$ 800 billion. India has also emerged as the fastest growing economy after China and become a major provider of services and goods to the world.

The story of India’s evolution as a major economic power is an interesting saga intertwined with political happenings. While three Prime Ministers held the coveted portfolio of Finance, only four ministers presented more than five budgets. A brief profile of these men is given below.

Nawabzada Liaquat Ali Khan (1896 - 1951) was an Indian Muslim politician and a leading member of the All India Muslim League (AIML). He played an influential role in the partition of India and the creation of Pakistan. He was closely involved in the negotiations over the form of independence to be granted to India after World War II.

When the Indian political leadership asked the Muslim League to send its nominees for representation in the interim government, Liaquat Ali was asked to lead the League group in the Union Cabinet. He was assigned the finance portfolio by the first Indian Prime Minister Pandit Jawahar Lal Nehru. Acknowledged as Jinnah's "right hand" and as such Liaquat was the obvious choice to become prime minister of independent Pakistan in 1947. He went on to become the country's senior most leader after Jinnah's death in 1948.

India’s First FM R K Shanmukham Chetty (1947-1948): Independent India's first Budget was presented by the country's first finance minister, R K Shanmukham Chetty, on November 26, 1947. And, that was an interim Budget. It was a review of the economy and no new taxes were proposed as the budget day for 1948-49 was just 95 days away. He resigned shortly. It is believed that he was asked to resign by Jawaharlal Nehru, the Prime Minister of India due to a minor dereliction of duty by a subordinate official, so as to ensure probity.

K C Neogy: 1948 K C Neogy then took charge. He was the second Finance Minister of free India. He held office for just 35 days and didn't get an opportunity to present a Budget.

John Mathai (1948-1950): John Mathai was an economist who served as India's first Railway Minister and subsequently as Finance Minister, taking office shortly after the presentation of India's first Budget, in 1948. He presented two budgets for 1949-50 and 1950-51. He resigned after presenting the 1950 Budget following protests against vesting large powers with the Planning Commission and P C Mahalanobis.

C D Deshmukh (1950-1956): C D Deshmukh was also the first Indian Governor of the Reserve Bank of India. He presented an interim budget for 1951-52. The first general elections in post-independence era were held between December - February 1952. Deshmukh was given the Finance portfolio after the new ministry assumed office. He felt honoured to present the first budget to the first-time elected members of Lok Sabha. Hindi crept into the budget documents beginning 1955-56. His stewardship of the country's finances was marked by prudence and humane perspective. He provided the much desired vision to deal with the changing financial needs of a young, independent and under-developed country like India.

He made significant contributions to the formulation and implementation of the country's First and Second Five Year Plans that provided strong base for the years ahead. He was responsible for ensuring social control of the financial structure such as the enactment of a new Companies Act, and nationalisation of the Imperial Bank of India and life insurance companies. He resigned from the Union Cabinet after protesting separation of Mumbai from Maharastra.

T T Krishnamachari (1957-1958): T T Krishnamachari took over from him. He found that the calculations made in the budget for 1955-56 had gone awry. So, on November 30, 1956 in a five-thousand-word speech he described the changed economic situation and underlined the need to levy fresh taxes even before the next budget was presented. The Second General Elections were held in February-March 1957 and he presented an interim budget for 1957-58 on March 14, 1957 and the full budget subsequently. He was instrumental in setting up the country's three major steel plants and financial institutions like IDBI, ICICI and UTI. He introduced path-breaking tax reforms during his stint as Finance Minister. Krishnamachari had to resign in Feburary 1958 when one man Justice Chagla Commission found him guilty of corruption.

Jawaharlal Nehru (1958-1959): Following Krishnamachari's resignation, the then Prime Minister, Jawaharlal Nehru, himself took charge of the Finance portfolio and presented the budget for 1958-59. In the opening para of his budget speech Nehru had said ... "According to custom, the budget statement for the coming year has to be presented today (February 28, 1958). By an unexpected and unhappy chain of circumstances the Finance Minister, who would normally have made this statement this afternoon is no longer with us. This heavy duty has fallen upon me almost at the last moment."

Morarji Desai (1959-1964): Morarji Desai became the next Finance Minister and he presented the maximum number of budgets so far- ten. They included five annual and one interim budget during his first stint. In his second tenure, he presented three full budgets and one interim as Finance Minister and Deputy Prime Minister. His annual budgets were for the years from 1959-60 to 1963-64 and the interim budget for 1962-63.

T T Krishnamachari (1964-1966): After the first stint of Morarji Desai, Krishnamachari once again became the Finance Minister for the second time. He presented the budgets for 1964-65 and 1965-66. Embarking upon measures needed for providing social security, Krishnamachari expanded the pension scheme to cover family members of the deceased government servants by introducing a new Family Pension Scheme in 1964. He planned schemes like the Rajasthan Canal Schemes, Dandakaranya and Damodar Valley Projects. The Neyveli Lignite Projects owe their existence to the fillip given by Krishnamachari. He resigned in late 1966.

Sachindra Choudhuri (1966-1967): Sachindra Choudhuri presented the budget for 1966-67 after the resignation of T T Krishnamachari. It was an interim arrangement.

Morarji Desai (1967-1969): After the fourth General Elections in 1967, Morarji Desai once again became the Finance Minister. This was his second stint. The annual budgets for three years 1967-68 to 1969-70 and the interim budget for 1967-68 were also presented by him. The interim budget for 1967-68 was on account of the General Elections in March 1967. He was the only Finance Minister to have had the opportunity to present two budgets on his birthday - in 1964 and 1968. He was born on February 29. Desai resigned in July 1969 in protest against the nationalisation of major banks by an ordinance on a Saturday evening. He felt social control of banks would regulate their functioning and make them accountable.

Indira Gandhi (1969-71): After Morarji Desai's resignation, Indira Gandhi, the then Prime Minister assumed the Finance portfolio. So far, she has been the only woman Finance Minister.

Y B Chavan (1971-1975): Following the Fifth General Elections in March, 1971, Y B Chavan became the Finance Minister. He presented the interim budget for 1971-72 and the final budgets for four years - 1971-72 to 1974-75.

C Subramaniam (1975-1977): C Subramaniam presented the budgets between 1975-76 and 1976-77. He cast the widest net to increase revenue through excise.

H M Patel (1977-1979): After the Seventh General Elections in March 1977, the first non-Congress Ministry under the then Janata Party assumed office at the centre. Morarji Desai was elected as the Prime Minister. H M Patel held the Finance portfolio. He presented the interim budget for 1977-78. He also presented the annual budget for 1978-79.

Chaudhary Charan Singh (1979-1980): The budget for 1979-80 was presented by Chaudhary Charan Singh who was also Deputy Prime Minister.

Ramaswamy Venkataraman (1980-1982): After the seventh General Elections in January, 1980, the Congress Party returned to power. Venkataraman presented the interim and final budgets for 1980-81 and the annual budget for 1981-82. Later he rose to become the country's Vice President and President.

Pranab Mukherjee (1982-1984): Pranab Mukherjee presented the annual budgets for 1982-83, 1983-84 and 1984-85. He was the first Rajya Sabha member to hold the Finance portfolio.

V P Singh (1985-1987): After the Eighth General Elections in 1984, V P Singh presented the annual budgets for 1985-86 and 1986-87. There was no interim budget since the elections were held in December 1984. He was part of the ministry headed by Rajiv Gandhi.

He oversaw the gradual relaxation of the license raj that Rajiv had in mind. He also gave extra power to the Enforcement Directorate of the Finance Ministry, that was given charge of tracking down tax evaders. Following a number of high-profile raids on suspected evaders - including Dhirubhai Ambani - Rajiv Gandhi was forced to sack him as Finance Minister, possibly because many of the raids were conducted on industrialists who had supported the Congress financially in the past.

Rajiv Gandhi (1987-1988): Rajiv Gandhi presented the budget for 1987-88. He was the third Prime Minister to present a budget after his mother, and grand father. The exercise in zero-based budget began in 1987-88. The zero-based budgeting is a process of review, analysis and evolution for each budget request in order to justify its inclusion or exclusion from the integrated whole budget before it is finally approved. In India, the zero-based budgeting was implemented in three phases - one third in the first year, two thirds in the second year and fully from the third year. It is a continuous process.

N D Tiwari (1988-1989): N D Tiwari presented the budget for the year 1988-1989.

S B Chavan (1989-1990): S.B. Chavan did the budget exercise for 1989-90. He also served twice as the Chief Minister of Maharashtra.

Madhu Dandavate (1990-1991): After the General Elections in November 1989, the then Janata Dal Government's Finance Minister Madhu Dandavate presented the annual budget for 1990-91.

Yashwant Sinha (1991-1992): Following subsequent political developments, Yashwant Sinha became the Finance Minister and presented the interim budget for 1991-92.

Manmohan Singh (1991-1996): Manmohan Singh served as the governor of the Reserve Bank of India in the late 1980s, and was given the portfoilo of finance in 1991 by Prime Minister Narasimha Rao. He presented the final budget for 1991-92 in July 1991. This was the first occasion when the interim and final budgets were presented by two ministers of two different political parties. The next four annual budgets of Manmohan Singh had an orientation different from the one followed till then.

The economic liberalisation package pushed by Singh and Rao opened the nation to foreign direct investment and reduced the red tape that had previously impeded business growth. The liberalisation was prompted by an acute balance-of-payments crisis whereby the Indian government was left without sufficient reserves to meet its obligations, and had begun preparations to mortgage its gold reserves to the Bank of England in order to obtain the cash reserves needed to run the country. As such, he was instrumental in making of an opened economy. He reduced the peak import duty from 300 plus to 50 per cent. He will be remembered best for making the rupee convertible in current account in just two phases. Introducing the concept of 'service tax' was his idea.

Jaswant Singh (1996): He served as Finance minister in the short-lived government of Atal Bihari Vajpayee, which lasted just from May 16, 1996, to June 1, 1996.

P Chidambaram (1996-1998): The general elections held in 1996, paved way for a coalition government supported by the left parties. This came as a big break for Chidambaram, who was given the key cabinet portfolio of Finance; this put him in the limelight. The final budget for 1996-97 was presented by P Chidambaram of the then Tamil Maanila Congress.

It was the second time that interim and final budgets were presented by two ministers of different political parties. Following a constitutional crisis, the I.K. Gujral Ministry was on its way out and a special session of Parliament was convened only to pass Shri Chidambaram's 1997-98 budget. It was passed without a debate. Although the coalition government was a short-lived one (it fell in 1998), it showed Chidambaram's competence as Finance Minister, a factor which was to lead to his re-appointment to the same key portfolio under Prime Minister Manmohan Singh in 2004.

Yashwant Sinha (1998-2002): After the General Elections in March 1998, Yashwant Sinha got the Finance portfolio in the first ever BJP-led Atal Bihari Vajpayee Government. He presented the interim and final budgets for 1998-99. After the 13th General Elections in 1999, he became the Finance Minister once again. He had presented four annual budgets - from 1999-2000 to 2002-2003. Yashwant Sinha presented the budget for 1999-2000 in the forenoon. Earlier, the budgets used to be presented at five in the evening as a pre-independence custom introduced by British establishment. While Manmohan Singh concentrated on making imports flexible, Sinha paid great attention to rationalization of excise and reduced the slabs from 11 to one.

Jaswant Singh (2002-2004): In July 2002 he became Finance Minister again, switching posts with Yashwant Sinha. He served as Finance Minister until the defeat of the Vajpayee government in May 2004 and was instrumental in defining and pushing through the market-friendly reforms of the government.

P Chidambaram: Incumbent Chidambaram became Minister of Finance again in the congress party-led United Progressive Alliance government on May 24, 2004.

In 2004, A K Bhattacharya wrote a historical piece about "All about interim Budgets ":

Independent India's first Budget was presented by India's first finance minister, R K Shanmukham Chetty, on November 26, 1947. And that was an interim Budget!

So when Finance Minister Jaswant Singh presents the interim Budget for 2004-05 on Tuesday, he won't be doing something unique. In fact, between him and Chetty, the Indian Parliament has seen the presentation of 10 interim Budgets.

Five of these interim Budgets were presented by finance ministers of newly elected governments that did not have sufficient time to prepare a full Budget before March 31.

And five of them were presented by governments that had decided to go for general elections immediately after or before the end of the financial year.

An interim Budget or a vote-on-account becomes a necessity because every year, Parliament's approval for drawing funds from the Consolidated Fund of India (CFI) for expenditure is usually obtained by March 31, the last day of the financial year.

If a regular Budget is not presented before March 31, and further approval for drawing funds for expenditure beyond March 31 is not obtained, the government can come to a halt.

So, all the interim Budgets so far have been presented primarily to enable the governments to continue incurring their obligatory expenditure until a regular Budget is passed by Parliament.

The exception was the first interim Budget on November 26, 1947. When he presented it, Chetty did not describe his Budget as an interim exercise.

But in the second Budget he presented to Parliament on February 28, 1948, he said his first exercise was an interim Budget. Under normal circumstances, there was no need for the Indian government to present a Budget so soon � less than four months after independence.

But as Chetty explained in his speech: "With the division of the country and the emergence of two independent governments in place of the old central government, the Budget for the current year 1947-48 passed by the legislature last March ceased to be operative. Although, under the transitional provisions of the Constitution, the government could authorise the expenditure necessary for the rest of the financial year, it was felt that it will be in accordance with the public wish that a Budget should be placed before the representatives of the people at the earliest possible moment."

Chetty's first Budget speech also contained a detailed assessment of the state of the Indian economy. He hoped to end the financial year with a deficit of Rs 25 crore, but only after he had proposed an increase in export duty on cotton cloth and yarn to fetch an additional annual revenue of Rs 8 crore.

That was the only new tax proposal in the first interim Budget. But then, that was an indirect tax proposal that could be enforced through a notification and did not require Parliament's sanction.

The next interim Budgets were all presented before general elections. That was quite understandable. The Congress was the ruling party and there was hardly any opposition to its return to power. All these interim Budgets were presented with Jawahar Lal Nehru as prime minister.

On February 29, 1952, C D Deshmukh presented the second interim Budget and set a new trend. Along with the revised estimates for 1951-52 and the Budget estimates for 1952-53, Deshmukh presented a "white paper" on the state of the economy.

But Deshmukh's interim Budget would be remembered for his claim of how he had converted a Budget deficit projected earlier into a Budget surplus by the time the year was coming to a close.

Equally significant was his bold announcement that food subsidies would have to be abolished to relieve the exchequer of this growing burden.

When he returned to Parliament with a regular Budget, Deshmukh proposed no new taxes, although he had to leave a deficit of about Rs 75 crore uncovered.

Instead of looking for more revenue, Deshmukh had initiated an exercise to identify areas where government expenditure could be cut.

T T Krishnamachari (TTK) also presented his interim Budget for 1957-58, just before the general elections. The highlight of his interim Budget speech was his reference to a growing foreign exchange shortage and the need to mobilise adequate resources to fund the second Five-year Plan that was then being finalised.

TTK's interim Budget showed for the first time the finance ministry's scant regard for the sanctity of the revenue and expenditure numbers presented to Parliament.

The interim Budget brought down the revised estimates for the deficit in 1956-57 to Rs 216 crore. But after the elections, the regular Budget presented a few weeks later showed that the actual deficit was Rs 368 crore.

Morarji Desai presented two interim Budgets � one for 1962-63 and the other for 1967-68. The first one was presented in his capacity as finance minister under Nehru's prime ministership, while the latter was as finance minister and deputy prime minister in Indira Gandhi's government. Both interim Budgets were significant for different reasons.

The interim Budget for 1962-63 was presented before the 1962 general elections. In it, Desai presented a full-scale economic survey along with his speech that dwelt on the critical issue of foreign aid from developed countries and the World Bank.

He justified the need for loans to developing countries at concessional terms, paving the way for the setting up of the Aid India Club.

The revised estimates for 1961-62 showed a surplus instead of a deficit projected in the Budget estimates. That was clearly aimed at wooing the electorate. Another attempt at pleasing the voters was to outline the details of expenditure allocation for different sectors for 1962-63. This was the first time that an interim Budget indicated expenditure outlay for the coming financial year.

Desai's second interim Budget was even more significant. This was soon after India's currency devaluation in 1966. Indira Gandhi was the newly elected Congress leader and prime minister, having returned to power after a well-fought general election. Also, this was the first interim Budget of a government at the start of a new five-year tenure.

Not surprisingly, Desai used the speech to outline quite a grim picture for the economy. He touched on the need for more foreign aid, the deteriorating foreign exchange reserves, the need for import restrictions and declining exports. But there was no indication of a Budget deficit. Indeed, Desai's regular Budget presented some weeks later balanced the revenue with expenditure.

The interim Budget presented by Y B Chavan for 1971-72 had no special features. It reviewed the economy, but gave sufficient indication of the need for new taxation in the regular Budget that he would present a few weeks later.

There was a longish section in his speech where Chavan waxed eloquent on the positive impact of the government's policy of nationalising 14 banks in July 1969.

H M Patel's interim Budget had many firsts. This was the first interim Budget to be presented by a former bureaucrat and also a finance secretary. No wonder his speech was the shortest of all interim Budget speeches delivered so far.

Although he had the opportunity to rubbish the Congress government's claims of an economic miracle during the Emergency (1975-77), Patel avoided all such temptations.

Instead, he let the figures do the talking. The Budget deficit in 1976-77, he said, increased from the earlier estimate of Rs 328 crore to Rs 425 crore in the revised estimate.

Patel's interim Budget also clearly hinted at the need to raise revenue through non-inflationary methods and for economy measures.

In sharp contrast to Patel's restraint, R Venkataraman converted his interim Budget speech for 1980-81 into a political statement aimed at attacking the Janata government's economic policies. And like Desai and Chavan, Venkataraman presented a long speech of over 40 paragraphs.

Yashwant Sinha's debut as finance minister was with an interim Budget, caused by the fall of the Chandra Shekhar government requiring a general election in May 1990.

This was at the height of India's economic crisis. Sinha's interim Budget will be remembered for his announcement that the government would disinvest equity in public sector undertakings.

In comparison, Sinha's second interim Budget was sober and mildly critical of his predecessor P Chidambaram's failure to meet the various revenue and expenditure targets.

Sinha also announced the government's decision to accept the Tenth Finance Commission's new formula for sharing of tax revenue among the Centre and the states through an amendment to the Constitution.

That leaves Manmohan Singh with his only interim Budget. He made it into a full-fledged election speech, outlining the Narasimha Rao government's achievements in economic policy.

He also announced a series of policy imperatives that the government ought to pursue, apart from presenting a sector-wise break-up of his expenditure plan for 1996-97.

He projected a fiscal deficit of only 5 per cent of gross domestic product, much lower than the 5.9 per cent achieved in the revised estimates for 1995-96. Singh ended his interim Budget speech with a virtual call to the voters to return the Congress party to power.

Like Manmohan Singh, Jaswant Singh also presents an interim Budget before the elections. The key question is: Will Jaswant Singh restrict himself to an election speech or set a new trend by announcing some new tax proposals too?

Electronic journal for medical colleges

Union Health Secretary Naresh Dayal launched the ERMED portal

The National Medical Library has started an electronic journal consortium, “Electronic Resources in Medicine” (ERMED), for providing full-text electronic journal service to 39 medical colleges and institutions across the country. These include ten Directorate-General of Health Services libraries and 28 Indian Council of Medical Research libraries and the All-India Institute of Medical Sciences library.

Union Health Secretary Naresh Dayal launched the ERMED portal www.nmlermed.in According to a release issued by the National Medical Library, the facility offers over a million articles in the open-access mode from over 1,515 medical journals. Articles can be searched by using the choice of journals, publishers, subjects and keywords of database.

“The library has adopted the most cost-effective strategy to put together the project that is aimed at building up a sustainable health information base and is committed to dissemination of a free flow of information,” said an official release.

The Director-General of Health Services is financing the entire project for 39 libraries. “The National Medical Library is the one-stop resource-sharing centre for medical literature across the country,” said National Medical Library director Anjana Chattopadhyay.

Rewrite the health petition

The petition initiative (http://www.gopetition.com/petitions/india-s-health-sector.html) targeting Health Minister must be revised, rewritten and made holistic. It should also be updated and should target Finance Minister.

Currently, Union Health Secretary is Naresh Dayal (not Mr J V R Prasad Rao) who is seized with the corruption in the health sector. An inquiry is underway since 2006 by the Central Bureau of Investigation in the health projects.

Comptroller and Auditor General (CAG) report that was tabled before Parliament in November 2007 revealed that mismanagement rules the roost in the department of health and family welfare and in government-run hospitals. The petition must include these and other aspects as well.

The petition notes that "80% of the population lives in rural areas, but 80% of health provision is urban. Over 85% of health provision is through private enterprise" but does not articulate any specific solution and does not state that private health sector in India is burgeoning, but at the cost of public health care.

A Transparency International survey had noted that 30% of patients in government hospitals informed that they had had to pay bribes or use influence. This aspect also needs to be addressed.

The petition refers to the recommendations made in the World Bank Report, "India, raising the sights: better health systems for India's poor. Health, Nutrition, Population Sector Unit, India, South Asia Region, 2001" but does not suggest any remedy in recognition of the conclusion of the report. The report concluded: "The hospitalised Indian spends more than half his total annual expenditure on buying healthcare; more than 40% of hospitalised people borrow money or sell assets to cover their expenses, and 35% fall below the poverty line."

It appears that the petition is quite "Medical Council of India" and "medical practitioner's salary" centric. It fails to note that although expenditure on health has increased in absolute terms, the proportion of GDP it represents has declined despite the promises made by th UPA government.

Health schemes caught between government & World Bank

Health schemes caught between government & World Bank

india is set to make another round of changes in procurement norms for health schemes funded by World Bank loans. This follows the bank’s review of Indian projects running on its loans, highlighting corrupt practices in procurement of drugs and other items by the government and drug companies. While such practices are well known—the bank’s own reviews have repeatedly mentioned them—the timing of the latest review has raised eyebrows.

Public health researchers doubt the bank’s motive: the review is more about wresting control than removing corruption. There are suggestions that it’s about getting the bank’s favourite firms on board. How this will arrest corruption is not clear.


In 2006, Pricewater-houseCoopers had appraised the bank’s review system, finding it inadequate.


Re-re…review
The review detailed the nexus between government bodies and pharma firms. This leads to corruption at several levels (see box: News you can’t use). The centre accepted the report and announced a series of changes in procurement norms. The schemes at stake deal with critical health concerns: tuberculosis, hiv/aids, malaria, and reproductive and child health. Procurement—of drugs, testing kits, bandages and equipment—is a major part of these programmes.

The schemes had recently completed five-year cycles, and were up for renewal. In fact, the bank has already sanctioned the next lot of funds, but hasn’t released them. This is where the questions arise. When the bank knew of corruption all along, why did it continue funding projects for years? The bank reviews projects every six months. What’s the point if they don’t help check corruption?

The striking aspect of these reviews—conducted by consultants at the bank’s high rates—is that they are paid for out of loans. Independent reviews show that up to 20 per cent of loans is spent on consultants.


Musical chairs
In 2005, the bank had released some findings of its review of the first phase of the reproductive and child health project. It had ‘found’ inconsistencies in the purchase of vitamins. The bank suggested funds go directly to states, instead of being routed through the centre. It recommended Tamil Nadu’s methods, which cut corruption and delays: the state was buying drugs directly from suppliers, instead of dealing with procurement agencies. It didn’t take long to realize that all states did not have this capacity. A year ago, the bank came up with an alternative to government agencies buying through their flawed tendering process: the un Office for Project Services (unops) was called in to handle procurement for projects running on the bank’s loans. The assumption being a un agency wouldn’t be corrupt.

Around that time, the Union Ministry of Health and Family Welfare realized it was time for another government agency, and decided to call it the Empowered Procurement Wing. A British consultant, Crown Agent, was en-gaged to streamline procurement. All solutions featured foreign agencies. Little attention has gone into a investigation and punishment.

If the bank wanted to clean up health schemes, it would have tried to bring the guilty to the book. But it provides nothing for criminal proceedings and is not usable as evidence in a court. Nor does it identify corrupt officials and suppliers. After the bank released the long-term review, health secretary Naresh Dayal has announced a probe.


Look who’s talking
What really weakens the bank’s position is recent events in its own house. Suzanne Rich-Folsom, director of the bank’s Department of Institutional Integrity that published the review of Indian health schemes, resigned on January 18. There is talk of corruption. Her credibility suffered further because she was also a counsellor to the previous World Bank president, Paul Wolfowitz, who resigned under a cloud.

Which is why when the bank talks about corruption in the Indian government, it doesn’t sound convincing.


News you can’t use
The World Bank’s assessed five projects: one each on HIV/AIDS, malaria and tuberculosis; the Food and Drug Capacity Building Project; and the Orissa Health Systems Development Project. These use bank loans of US $569 million. The review showed the following problems were common:

* Some bidders were favoured in violation of bank’s bidding norms
* Fraudulent bids
* Uninstalled and improperly installed equipment; substandard material
* Ministry set up panel to oversee bids. It often overruled project’s bid evaluation committee’s decisions.
* Bank had okayed contracts in spite of finding shortcomings
* lack of financial record-keeping
* Fictitious NGOs awarded contracts
* Lack of controls to monitor funds
* Bribing of health ministry officials

INTELLECTUAL PROPERTY RIGHTS REGIME OPPORTUNITY & CHALLENGE

INTELLECTUAL PROPERTY RIGHTS REGIME IS BOTH AN OPPORTUNITY AS WELL AS A CHALLENGE BEFORE THE MEMBER STATES: DR. RAMADOSS

Addressing the plenary meeting of the 60th World Health Assembly in Geneva on 16th May, 2007, the Minister for Health & Family Welfare, Dr. Anbumani Ramadoss said that the World Health Organisation (WHO) needs to develop the capacities of many countries to participate in the Intellectual Property Rights (IPR) regime and reap its benefits. He said there are valid reservations on whether or not the IPR regime will lead to innovations in so far as neglected and tropical diseases are concerned. Ms Jane Halton, President, World Health Assembly and Dr Margaret Chan, Director-General, WHO were also present on the occasion.

The following is the text of the Minister’s speech:

It is indeed a pleasure for me to address the WHA once again. Last year I also had the privilege of chairing the proceedings of Committee-A. This provided me with a deep insight into the wide gamut of issues placed before the World Health Assembly. While it was no doubt enlightening for me to participate in these deliberations I cannot but help suggesting that WHO needs to progressively assume a more proactive role on global health issues rather than on advocating remedial measures after events have taken place. In particular WHO can be a bridge between developed and developing countries on issues relating to human resources, technology transfers, building consensus as well as capacities on emerging issues such as Intellectual Property Rights, Innovation and Public Health. There is also a case for a fresh look on the representation of developing countries like India and China on different WHO fora considering their population size and share of global disease burden.

The theme adopted by the 60th WHA, “Health Security” is of great interest to all of us. The global threat of emerging and re-emerging infectious diseases has been demonstrated by the emergence of Human Immunodeficiency Virus (HIV) in the 1980s, Avian Influenza H5N1 in Hong Kong originally seen in 1997 and continuing through today and a global epidemic of Severe Acute Respiratory Syndrome (SARS) in 2003. No country is immune to the occurrence of these diseases. It is therefore altogether appropriate for the WHA to focus on health security.

Development issues including health, nutrition, drinking water, education are today at the forefront of world politics. Health, as we all know is fundamental to social and economic development. The Millennium Development Goals 2015 are less than a decade away and most countries are feeling the pressure from all stakeholders to design policies which accelerate the achievement of the goals as per schedule.

In India, the state supported public health delivery system is being comprehensively rejuvenated under the National Rural Health Mission which is the biggest and most ambitious programme in the health sector ever in India. The National Rural Health Mission which is a convergence of health, nutrition, sanitation and drinking water, seeks to provide accessible, affordable and accountable quality health services specially to the poorest households in the remotest rural regions, focusing on reducing IMR and MMR. The thrust of NRHM is on establishing a fully functional, community owned, decentralized health delivery system with inter sectoral convergence at all levels. Quality care through adoption of the Indian Public Health Standards, focus on outcomes and adoption of evidence based strategies are some of the other salient features of NRHM.

We realize the need to target programmes for our women and children. We are going for major capacity building initiatives both for human and physical resources to ensure nutritional adequacy, deliveries at institutions and by skilled birth attendants, referral transport and emergency obstetric care. The Janani Suraksha Yojana, a path breaking programme for cash support for institutional deliveries, has had an overwhelming response.

Newborn and child health strategies range from the integrated management of neonatal and childhood illnesses, immunisation strategies, including this year, a US$300 million polio eradication programme and the recently launched Norway-India partnership initiative.

We have more than 400,000 Accredited Social Health Activists (ASHAs) who are empowered village women forming a link between the government and our clients for better service delivery.

The double burden of diseases experienced by a large number of low and middle income countries of the world has made it necessary for these countries to initiate mechanisms for effective prevention and control mechanisms.

The initiatives taken by us in addressing communicable diseases have given dividends. The progress made by the various national programs for control and elimination of TB, Malaria, Leprosy, HIV/AIDS are noteworthy.

A national program for prevention and control of Non Communicable Diseases like Diabetes, Cardiovascular diseases and stroke has been initiated. Taking care of the elderly population, a national programme for the care of elderly is also on the anvil. Issues of emergency and trauma care are being taken as priority areas.

The consumption of tobacco is also a major cause of morbidity. The global community is slowly recognizing the threat of the tobacco epidemic and the WHO Framework Convention on Tobacco Control (FCTC) is an important step in this direction. India, one of the first signatories of the FCTC, is in the process of launching a National programme on Tobacco Control. An anti-tobacco law was enacted as far back as 2003 and rules have been enacted banning smoking in public places; direct and indirect advertisements and sale of tobacco products to minors.

India is a key participant in the WHO supported Tobacco Free Initiative (TFI) and we are actively engaged in developing surveillance systems, building capacities of key stakeholders, undertaking advocacy measures and intensifying training programmes to combat consumption of tobacco. A Tobacco Regulatory Authority is on the anvil which will make recommendations on tobacco taxation policy, advertising, anti-smuggling measures, enforcement of the Act as well as on other measures both for disease prevention as well as prevalence reduction.

I believe that in the new Millennium the future of the health sector is going to be in substantial measure determined by the quality and availability of human resources; the spirit of innovation and enterprise, which alone will find cost effective solutions to seemingly intractable problems and by technological advancements in information technology as well as biotechnology. There are issues relating to migration of qualified health work force, which are leaving gaps within the exiting infrastructure and services, both within and outside the public sector.

The WHO needs to help the affected countries to address contributing factors to human resource shortages. The Intellectual Property Rights regime is both an opportunity as well as a challenge before the Member States. There are valid reservations on whether or not the IPR regime will lead to innovations in so far as neglected and tropical diseases are concerned. Similarly access and pricing of essential drugs is indeed a matter of concern.

The WHO will need to develop the capacities of many countries to participate in the IPR regime and reap its benefits.

Finally technology and technological advancements cannot be wished away and must in fact be relied upon to provide solutions to improve health care systems, both technical as well as managerial.

From some perspective I can say that if the Information Technology Industry was responsible for the present growth of India, then the future of India lies in the growth of the bio-medical industry. The WHO needs to position itself as the harbinger of technology to nations.

Consultation on “Healthy Environment Programme in India”

Stephen L. Johnson, Administrator, Environmental Protection Agency, USA visited New Delhi on 2-3 April 2007. The Ministry of Health and Family Welfare, Government of India, and WHO India jointly organized a Consultation on “Healthy Environment Programme in India” on 2 April 2007. The meeting was chaired by the Secretary, Ministry of Health & Family Welfare.

Dr S J Habayeb, WHO Representative to India, introduced the basic objective of the consultation and narrated the three ongoing joint collaborations between WHO and US-EPA, namely Water Safety Plan, and the risks of Lindane and Mercury. Welcoming the participants, Naresh Dayal, Secretary for Health and Family Welfare, highlighted the needs of healthy environment with special reference to drinking water quality monitoring. He also suggested regulated use of water and impact of climate change on the water balance. Johnson, in his introductory remark, highlighted various activities being carried out by US-EPA in USA for a “Healthy Community Programme”. He mentioned that around 25% of the disease burden is due to environment factors. He also highlighted the Indo-USA joint activities in the field of environment, benefiting the public health programmes.

Ms. Shantha Sheela Nair, Secretary, Department of Drinking Water, explained the rural water and sanitation scenario in the country. This was followed by a presentation from Dr. B Sengupta, Member Secretary, Central Pollution Control Board on “Environmental concerns and Waste Management” in the country. The salient features of “Jawaharlal Nehru National Urban Renewal Mission” and its impact on the urban poor were presented by Dr. P K Mohanty, Joint Secretary, Ministry of Housing and Poverty Alleviation. The various ongoing joint activities of ICMR with US-EPA, with special reference to occupational health, were explained by Prof. N K Ganguly, DG, ICMR. This was followed by thought provoking discussions on healthy environment issues being faced by the country.

Finally, the ‘Guidance Manual for Drinking Water Quality Monitoring and Assessment’ was jointly launched by Stephen L Johnson and Naresh Dayal. The Manual, developed by NEERI, Nagpur and NICD, New Delhi, is a joint effort of Ministry of Health and Family Welfare; Ministry of Environment and Forests; Central Pollution Control Board; Department of Drinking Water; Ministry of Urban Development; Ministry of Water Resources; WHO, Country Office for India; and US-EPA. The Manual will be released for dissemination in May 2007.

The meeting ended with a vote of thanks proposed by Dr. Shiv Lal, Additional DG & Director, NICD.

Social security for the unorganised sector Workers ?

A bill to provide social security to the unorganised sector workers is pending in the Parliament. A standing committee had scrutinised it and submitted their recommendations. The Left has rejected the Bill in its present form and wants the government to change the proposed legislation, which aims to cover 309 million workers.
because it does not incorporate committee's suggestions.

The Parliament Standing Committee on Labour invited suggestions, views, comments from individuals, institutions and organisations on the Unorganised Sector Workers' Social Security Bill, 2007. The Bill, introduced in Rajya Sabha on September 10, 2007, was referred to the Standing Committee on Labour under the Chairmanship of Lok Sabha MP, Suravaram Sudhakar Reddy for examination.

The Unorganized Sector Workers' Social Security Bill, 2007 talks about the social security and welfare of unorganized sector workers.

The bill provides for setting up of a National Social Security Advisory Board by the Central Government and the State Social Security Advisory Board by the State Governments respectively, for recommending suitable welfare schemes for different sections of unorganized sector workers.

A health insurance for workers of unorganised sector would be implemented from April 1. It provided a Rs 30,000 free health insurance cover to a five-member-family belonging to BPL category.


The labour ministry is reluctant to incorporate any major change suggested by the parliamentary standing committee.

The labour ministry doesn't see merit in the two main suggestions of the standing committee the creation of a dedicated fund for schemes for the sector and an administrative authority to implement these schemes.

Whether there is a dedicated fund or not is immaterial. Our only concern is availability of money. The government is already providing funds for the BPL (below poverty line) families. There is no shortage of funds,� said a top official in the labour ministry.

Ministry sources cite the example of the dedicated fund for north- eastern states. The huge amounts these funds are supposed to have are absent. Ministry officials say the welfare of unorganised labourers boils down to providing pension and life insurance. Since most of the schemes will be implemented by insurance companies and government agencies, there is no need to create another administrative body, they say.

The labour ministry says it has already extended old-age pension to all BPL families which is expected to cover a large section of unorganised workers. Then there is the Rashtriya Swasthya Bima Yojana for BPL families which will be functional from April 2008. After these schemes, where money for the beneficiaries� health needs is paid for, the government is framing schemes for other unorganised labourers.

We will soon moot schemes for autorickshaw drivers, domestic helps, fishermen, tailors, taxi-drivers and other unorganised sector workers. However, these schemes will be participatory,� said Union Labour Minister Oscar Fernandes.

Another important demand of the Left and the standing committee's separate arrangements for the agricultural workers is not a priority for the ministry. Most farmers or agricultural workers shift to other manual jobs in off-season, so it�s difficult to assess them as a different category, officials say.

A final decision on the recommendations of the standing committee will be taken by the Cabinet. We will try to pass the Bill in the coming session of Parliament, said Fernandes.

It is to be seen how much pressure the Left can exert on the government when the ministry is not ready to accept its major demands. A stubborn approach of the Left might stall the passage of the Bill and the Congress would have a political opportunity to campaign that the Left was obstructing the welfare of unorganised workers.

Business Standard reported on January 18, 2008 that “Pension scheme for mine workers” by April, 2008 is on the cards.

Impatient with parliamentary delay in passing the omnibus legislation for the unorganised labour, the labour ministry has decided to strike out on its own.

The ministry plans to launch a provident fund/pension scheme for mine and cine workers with contributions from both the worker and the government from April.

The scheme, under the rubric of the Unorganised Sector Workers’ Social Security Bill, comes amid the expectation that the enabling Bill will be passed during the Budget session of Parliament.

As labour is on the concurrent list, both the Centre and state governments can legislate on it. But the complaint has always been that state governments have been unable to sustain them because of a resource crunch. By claiming ownership of a scheme wholly funded by it, the Centre hopes to avoid that situation in the case of this scheme.

Initially, the scheme will cover around 500,000 mine and cine workers registered with the Labour Welfare Organisation. Later, all workers in the unorganised sector which constitutes 94 per cent of the country’s workforce will be brought under the scheme.

This is the first-of-its-kind scheme for the unorganised sector where the workers will also contribute a share. The ministry expects to bring a vast mass of the working population that has stayed outside the pale of the formal economy so far, under this scheme.

The scheme will be run by the labour ministry. Of the Rs 100 subscription per month, Rs 75 would be paid by the worker, while Rs 25 would be contributed through Labour Welfare Funds.

The government’s contribution for the pilot scheme covering two sectors is likely to cost around Rs 810 lakh annually. The funds will come from the labour ministry’s internal resources.

Workers of limestone, dolomite, iron/manganese/ chrome ore mines along with cine workers in the age group of 18 to 52 years, who are not already covered under a provident fund scheme of the government, are eligible under the scheme. Subscribers will be eligible for provident fund/pension at the age of 58.

�Workers will deposit the monthly premium in a designated post office/bank or with the Labour Welfare Organisation�s dispensaries. The money would be transferred to UTI which would act as the fund manager of the corpus created from the contribution from workers and government,� a labour department official said.

UTI will provide the members’ list to the Welfare Commissioners who will deposit the central government’s share, as a subsidy, with UTI periodically.

The worker would be eligible for a lump sum amount at the time of maturity, equivalent to the value of the units issued to him by UTI from time to time. An option for a pension scheme in lieu of the lump sum amount will also be provided to the worker.

The only other pension scheme for unorganised labour is the government’s proposal to pay Rs 200 per month to all below the poverty line (BPL) persons above 65 under the National Old Age Pension Scheme.

There is no structured contributory pension/provident fund schemes for workers in unorganised sector. So, the ministry is working on a scheme to provide old age security to this segment of unorganised workers.

As the scheme is contributory, a worker is free to join any other scheme as well. In case of default, the deposited money will not be confiscated and the member can rejoin the scheme later.

A member is eligible for pension only after attaining 58 years of age which will be paid through a bank or post office. If a worker wants to withdraw his money, he is free to do so but in such cases he will not get the pension and is only eligible to get his deposits and growth amount subject to deduction of 1 per cent exit load.


Background to Omnibus legislation for the unorganised labour based on a PIB Release

A survey conducted by the National Sample Survey Organization (NSSO), shows that the total employment in both the organized and the unorganised sectors in the country is 39.7 crore, of which 2.8 crore are in the organized sector and 36.9 crore (about 93%) are in the unorganised sector. Of this, 23.7 crore workers are in the agricultural sector and 1.7 crore are engaged in construction sector. Remaining workers are engaged in mining, manufacturing and services sector. On account of their unorganised nature, these workers do not get adequate social security and welfare.

Some welfare schemes are being implemented by the Central Government for specific occupational groups of unorganised sector workers such as beedi workers, non-coal mine workers, cine workers, handloom weavers, fishermen, etc. These are apart from the National old Age Pension Scheme and National Rural Health Mission. Some of the State Governments have also been implementing welfare programmes for certain categories of the unorganised sector workers. Some NGOs are also providing social security to certain categories of workers. Despite all these efforts, there is a deficit in the coverage of the unorganised sector workers in the matter of labour protection and social security measures.

THE MANDATE OF NCMP

In line with the commitment made by the United Progressive Alliance (UPA) Government in the National Common Minimum Programme (NCMP), the National Commission for Enterprises in the Unorganised Sector (NCEUS) was set up in September 2004 under the chairmanship of Dr. Arjun Sengupta as an advisory body and as a watchdog for the unorganized sector. The Commission has the mandate to examine the problems of the unorganized sector (also referred to as informal sector) and suggest measures to overcome them. The term of the Commission, which was initially fixed at one year, was extended to three years. The Commission has been assigned wide-ranging terms of reference. Being an advisory body, the Commission is supposed to submit its recommendations to the Government of India. An Advisory Board has also been constituted to enable the Commission to have the benefit of the advice of experienced persons in the relevant areas.

The Commission has been focusing on a few significant programmatic interventions, which could be adopted in the immediate term. These interventions are aimed at bringing about improvement in the productivity of enterprises in the unorganized/Informal Sector, generation of large-scale employment opportunities on a sustainable basis and enhancing the welfare of the workers in the unorganized sector.

COMMISSION’S FINDINGS

The Commission’s findings show that forty per cent of the workers in the unorganised agricultural and non-agricultural sector are wage workers and sixty per cent are self-employed. Among the self-employed, the overwhelming majorities are own account or assisting family workers and only 1.15 % (among non-agricultural workers) are employers.

The vast majority of the self-employed in the unorganised sector themselves work under poor conditions and the productivity of their enterprises is very low. Measures to protect the livelihood of the self-employed workers and to promote the productivity of the unorganised enterprises, will not only have an impact on the condition of the self-employed, but also on the condition of the unorganised wage workers who work in the unorganised enterprises. Thus, regulation of the condition of work of wage workers needs to go hand in hand with the protection and promotion of livelihood of the self-employed workers and enhancing the growth and productivity of the unorganised sector enterprises.

PROPOSED BILLS

The Commission had initially proposed a draft Bill “Unorganised Sector Workers (Conditions of Work & Livelihood Promotion) Bill, 2005” for comments and feedback. Based on the comments received from states, trade unions and other stake holders, the Commission revised the earlier proposal and has now proposed two Bills “Unorganised Non-agricultural Sector Workers (Conditions of Work and Livelihood Promotion) Bill, 2007” and the “Unorganised Agricultural Sector Workers (Conditions of Work and Livelihood Promotion) Bill, 2007” to cover unorganised agricultural workers and non-agricultural workers respectively. Part 1 of each of the Bills contains provisions relating to the regulation of conditions of work of wage workers. Part 2 of the Bill relates to the protection and promotion of livelihoods of the unorganised workers.

The Draft Bills provide for basic and minimum conditions of work for all unorganised wage workers and home workers. Instead of relying on bureaucratic implementation and costly and time consuming legal redressal procedures, the Commission has accorded priority to conciliation and has proposed the participation of workers’ representatives and elected representatives of the local bodies in the conciliation and dispute resolution committees.

The proposed Bills also mandate that the appropriate governments take the necessary steps to protect and promote these livelihoods through appropriate policies and programmes, and have provided for an institutional machinery to take a holistic view of the sector and to mobilise the necessary resources to help the sector overcome such constraints and facilitate its growth.

NATIONAL FUND

The NCEUS has proposed the formation of a National Fund designed to meet the multi purpose needs of both enterprises and workers in the unorganized sector. The tasks proposed to be handled by the Fund are extensive as the sector needs a holistic approach for its development taking into account all essential needs covering finance, technology, raw material, marketing, infrastructure, skill and entrepreneurship and would cover both farm and non-farm sectors and also rural and urban areas.

CABINET NOD FOR SOCIAL SECURITY

In a significant move the Union Cabinet on 24th May, 2007 gave its approval for social security for the unorganised sector workers. It said that the welfare schemes for workers in the unorganized sector would be introduced in a phased manner to fulfil the commitment made in the National Common Minimum Programme. Besides, the Government would constitute a National Advisory Board to design, from time to time, suitable welfare schemes for different sections of unorganized workers and recommend the same to the Government. On the recommendations of the National Advisory Board, the Central Government will, from time to time, notify scheme or schemes for one or more sections of unorganized workers.

Apart from designing model schemes for workers in unorganized sector, the National Advisory Board shall monitor the implementation of all notified welfare schemes; ensure that every eligible worker in the unorganized sector is registered and receives an identity card; oversee the record keeping functions performed at the district level and the State level.

The Cabinet also paved the way for a Bill to be introduced in Parliament as early as possible for this purpose. The Bill would provide for setting up a National Advisory Board and enable the Central Government to notify welfare schemes from time to time.

The Bill will also provide for constitution of a State Level Advisory Board by the State Government concerned.

The schemes notified by the Central Government will contain provisions for: (a) life and disability cover; (b) health benefits; (c) old age protection; or (d) any other benefit as decided by the Central Govt.

The procedure for registering the workers in the unorganized sector will be prescribed and implemented. Every worker in the unorganized sector shall be eligible for registration subject to the following conditions: (a) he/she should have completed 18 years of age; (b) he/she should make a self-declaration affirming that he/she is a worker in the unorganized sector.

Every registered worker in the unorganized sector shall be issued an identity card, which shall be a smart card. It shall carry a unique identification number and shall be portable.

The record-keeping agency for this purpose shall be the district administration and the record keeping function shall be performed by the District Panchayat in rural areas, and Urban Local Bodies in urban areas. This will be directed by the concerned State Governments.

These schemes and proposed Bill/Bills, if introduced, will go a long way to mitigate the plight of the unorganized workers in the country.

Public health in private hands? A note on the Public Health Foundation of India

Speaking for Ourselves 221

MOHAN RAO, K. R. NAYAR

We live in a world of profound, and growing, inequalities. Changes in the global economy over the past three decades have been accompanied by dramatic reversals of health gains made in the post-Second World War period. While some countries have witnessed stagnation in health indices, others have seen dramatic declines. At the same time, what is termed the health divide—between rich nations and poor nations, and between the rich and poor within countries—is increasing remarkably. Thus, for example, the gap in the under-5 death rate, considered a sensitive indicator of social and economic development, has widened between the rich countries and the poor. The under-5 death rate gap increased from a ratio of 7.8 in 1978 to 12.5 in 1998. Similarly, the death rate ratio in the age group 5–14 years also increased from 3.8 in 1950 to 7 in 1990.

It is widely accepted that these widening health inequalities are the consequence of the imposition of the World Bank and International Monetary Fund (IMF)-led policies of structural adjustment and the accompanying health sector reforms around the globe. Over the same period, the role of the WHO has shrunk, with the World Bank increasingly setting the agenda for health. World Bank loans for one disease alone, malaria, exceed the entire budget of the WHO.

In addition to reducing state commitment to health, typically, these health prescriptions of the World Bank are committed to methodological individualism and to behaviourism; they do not recognize the structural factors that govern and contour the health or ecology of disease. As a result, interventions tend to be disjointed (oral rehydration solution [ORS] for diarrhoea rather than emphasizing on water supply and sanitation; focusing on anaemia in pregnancy, but not anaemia in the general population), and of a technical nature—what is referred to as the biomedical approach in public health. This has led to the growth of disease-centric vertical programmes. Globally—and reflected even in India’s National Health Policy 2002—it is recognized that one of the failures of health sector development in the past has been due to such vertical programme approaches. Assuming there is a grave fiscal crisis—which still seems to allow for subsidies to be given to the rich in a variety of areas—these prescriptions typically include fee for services. Again, the global experience has been that this excludes the poor from access to health services. Indeed, it is this explicit recognition that has led countries such as Zambia to do away with this policy prescription. What the package of prescriptions tends to do is to wrench apart comprehensive public healthcare, entrust profitable sectors of it to the private sector and enjoin the state to subsidize a minimum clinical package, which typically involves family planning.

The global experience with this approach to health sector development has been dismal, and not just in poor countries. In Russia, following the neo-liberal changes in the economy and the accompanying health sector reforms, between 1991 and 1994, life expectancy among men decreased by close to 7 years, from 63.6 to 57.5 years; among women the decline was close to 3 years, from 74.4 to 71.1 years. Such a decline in life expectations in populations not at war or suffering the onslaught of that other horse of the apocalypse, famine, is historically unprecedented. Accompanying the collapse of under-funded systems of healthcare, a booming private health system has emerged, along with a resurgence of old communicable diseases and hunger. Indeed, even in the USA, data on life expectancy by race, a crude indicator of inequality, shows increasing divergence between whites and blacks beginning in the Reagan years. The most telling data are from the UK that reveal increasing mortality differentials by class. The Black Report showed a substantial increase in mortality differentials by social class; the mortality rates among unskilled working-class men in 1981 were higher than they had ever been in the twentieth century, deteriorating after 1971.

This is despite the fact that developed countries spend much more on health than India does, not only in absolute per capita terms but also as shares of national income or public budgets. The UK spends 6% of its budget on health, India now less than 1%. In contrast, the USA spends 12% of its budget on health. The UK relies on universal coverage and a state-supported and -led National Health Service. It has better health indices than the USA despite spending less on health. In the USA, for instance, about 40 million people obtain no health coverage. Infant mortality rates (IMRs) and under-5 mortality rates (U5MR) are significantly higher than in the UK. This calls for re-thinking of some neo-liberal shibboleths such as the supposed inefficiency of the public sector and the greater efficiency of market-driven private behaviour. Sri Lanka offers an excellent example of state-led quality healthcare provision. In Sri Lanka, about 97% of inpatient care and 83% of outpatient care is in the public sector, where they have also integrated the so-called indigenous systems of medicine.

India is yet to achieve the National Health Policy 1983 target of reducing the IMR to less than 60 per 1000 live births. More serious is the fact that the rate of decline in the IMR, which was significant in the 1970s and 1980s, has markedly decelerated in the 1990s. The percentage decline in IMR between 1971 and 1981 was 14.7; between 1981 and 1991 it was even greater at 27.3. However, in the period 1991–99, there has been a stagnation, with the rate of decline in the IMR at 10%. Similarly, while there has been a decline in the U5MR, the pace of decline has come down and the U5MR is currently hovering around 95. During 1971–81, the percentage decline was 20.6. The decline was much sharper during the 1980s, with a percentage decline of 35.7. However, during the 1990s, with the onset of policies of liberalization, the rate of decline fell to 15.1.1

Other changes have been equally important. Interregional, rural–urban, gender and economic class differentials in access to healthcare in India are well documented. But since the onset of liberalization policies, these have widened considerably. The decline in public investments was matched by growing subsidies to the private sector in healthcare in a variety of ways.2 State support for private healthcare grew with the initiation of private–public partnerships that took a variety of forms. At the same time, there were far-reaching changes in drug policies. Thus India—earlier characterized by relatively low costs of drugs and pharmaceuticals, along with major indigenous production of drugs—has witnessed a greater concentration of drug production, a larger role for multinationals, a higher proportion of imported drugs and unbelievably steep rises in the costs of drugs.3 Concurrently, marked shifts have occurred in healthcare utilization. Among people who sought outpatient services in 1995–96, more than 80% did so in the private sector, a sharp increase in even the poorer states of the country.4 In 1995–96, 55% and 57% of people in rural and urban areas, respectively, were hospitalized in the private sector compared to 40% in 1986–87. The National Sample Survey (NSS) data indicate greater inequality in the use of health facilities by economic class gradients. In rural areas the class gradient in inpatient use of public hospitals—which was insignificant in the mid-1980s—turned statistically significant in the mid-1990s. In urban areas, inequality in the use of public facilities did not worsen significantly, but inequality in the use of private facilities did. The steep fall in rural hospitalization rates, along with increasing use by the better-off indicates that the poor are being squeezed out. Fee-for-services is undoubtedly one important mechanism that has succeeded in doing this. In other words, World Bank policies on health, contained in the influential World development report 1993 succeeded in doing exactly the opposite of what was ostensibly its raison d’être: reduce the utilization of public services by the better-off to increase access
to the poor.

Costs of both outpatient and inpatient care have increased sharply in both rural and urban areas, compared to the mid-1980s. Private outpatient costs increased by 142% as against 77% in the public sector in rural areas. In urban areas, private outpatient costs increased by 150% compared to 124% in the public sector. The increase in costs in inpatient care is even more striking: average costs rose by 436% in rural and 320% in urban areas.4 Thus, it is not surprising that, as the National Health Policy 2002 notes, medical expenditure has emerged as one of the leading causes of indebtedness.5 At the same time, the proportion of people not availing any type of medical care due to financial reasons between 1986–87 and 1995–96 increased from 10% to 21% in urban areas, and from 15% to 24% in rural areas.6

What we need is state-led support to primary healthcare in all its dimensions. Efforts to do so through the National Rural Health Mission appear diminished in vision, and totally lack a systemic perspective. It is also seriously underfunded. Thus, the need is to concentrate on strengthening the entire primary healthcare (PHC) system—which includes efficient referral systems to secondary and tertiary levels of care. State governments are facing huge financial problems in doing so. There are massive shortages of human resources such as public health nurses, auxiliary nurse–midwives, male multipurpose workers, etc. not to mention specialists. This is especially the case in states with poor health indices. Given the low financial outlays, a large part of the health budget goes towards salaries. Without resources, time, support staff and drugs to provide effective public healthcare, doctors lose motivation and seek alternative work. In this situation the PHC system offers little other than family planning and oral polio vaccination, driving people, the poor included, into the private sector. In this situation of state-led collapse of the public health structure, community initiatives are both inadequate and regressive. Accredited social health activists (ASHAs) cannot function in a dysfunctional healthcare system. A further drain on public resources is through knee-jerk initiatives such as increasing public–private partnerships (PPP) or ‘NGOization’.

It is against this backdrop that the effort to create a Public Health Foundation of India (PHFI) needs to be critically examined. This is apparently an autonomous institution with 15% of funds from the government and the rest from other sources. State governments are expected to provide land and other infrastructure facilities. The PHFI will create 5 new institutions for training in public health, commencing initially with 2 schools. We understand that recruitment of faculty has already commenced in schools of public health in the USA (the last date for applications was 9 March 2006, as per a circular to Deans and Assistant Deans of schools of public health in the USA; the PHFI was inaugurated on 28 March 2006).

There are a number of issues with regard to the new-found love for world-class ‘India-centric, India-relevant and tailored to India’ public health. It is apparent that dual systems of healthcare will now extend to dual systems of training in public health. This includes possibly dual salary structures, leading to internal brain drain.
The question that needs to be seriously considered is the system of public health that is now being considered worthy of emulation. As we noted earlier, one model of healthcare that should not to be emulated is the American model. It is not only much more expensive, but also leaves out substantial sections of the population. Indeed, it would not be an exaggeration to state that the aim of the American system of public health is the creation of markets in healthcare. Under the influence of such a system, the global industry in health has increased from US$ 396 billion in 1976 to US$ 786 billion in 1990.

It is in this context that one should examine the role of the Harvard School of Public Health, indeed, the American system of public health schools, in shaping public health education and research in India and in many other developing countries, including China. Scholars such as Hugh Leavell, Benjamin Paul, John Gordon, Carl Taylor, Theodore Ingalls, James Simmons and John Wyon, collectively known as the ‘Harvard group’, were instrumental in shaping the population control agenda with a neo-Malthusian bias in the early 1960s. The damage this has caused to health sector development in India is well known. Their enthnocentrism was evident when one of their influential studies concluded: ‘Westerners have strong feelings about the value of children not shared by Punjabi villagers.’7

However, perhaps more important is the shaping of the curriculum of Preventive and Social Medicine by scholars such as Carl Taylor who chaired the Department of Preventive and Social Medicine (PSM) of the Christian Medical College in Ludhiana. No doubt, at that time as well, the curriculum was India-relevant as it was based on the well-known ‘internship studies’ undertaken by the Harvard group. The approach was strikingly similar to colonial anthropology, that of studying the ‘natives’.8 A survey undertaken in 1959 of the teaching of PSM revealed that rural internship programmes were in serious trouble. It was found that rural health centres for training interns had evolved without proper planning. The major problems were inadequate staffing, equipment and accommodation. There was widespread apathy among the interns regarding the purpose of the programme. Following this, a project on rural orientation of physicians was undertaken on a request from the Minister of Health, Government of India by the PSM Department of the Ludhiana Medical College under the leadership of Carl Taylor. The project was funded through a PL-480 grant from the Bureau of Educational and Cultural Affairs of the United States Department of State. The study reinforced the internship approach by expanding the practical training over 4 levels of facilities: teaching hospitals, average district hospitals, teaching health centres and average health centres, and suggested the philosophy of ‘medical colleges without walls’. Despite such heavy foreign funding and American ‘wheat’ funding, the quality of public health teaching could not be salvaged.

The intervention of the Medical Council of India (MCI) and recommendations of the Srivastava Committee led to further shifts in the teaching of public health in medical colleges. The important shift was the introduction of the Reorientation of Medical Education (ROME) scheme in 1977. The objectives of the ROME scheme were to involve medical colleges in direct delivery of health services to the rural population as well as expose students to the rural environment. Some foreign governments even donated huge mobile clinics for rural areas under the programme, which of course did not serve the purpose since these large vans could not traverse narrow, unpaved rural roads. The ROME scheme was implemented initially in 25 medical colleges and was extended to all the medical colleges recognized by the MCI. It can now be safely asserted that the present poor state of PSM education in medical colleges in India and the failure to produce a ‘managerial physician’ could be attributed to the original sin committed in the 1950s. Further cosmetic changes did not succeed due to the poorly envisioned curriculum that continued to remain unattractive.

It is evident that without strengthening the existing public health teaching in medical colleges—there are 120 of them throughout the country at present—it will be impossible to create a ‘managerial physician’ who needs to provide effective leadership in the health services system. An elite-oriented public health education on such a large scale and in a vertical fashion may not achieve such an objective.

It appears that planners in India seek to bring back this variety of American-exported public health. Once famously described as a-theoretical, a-political and a-historical, this is now touted as a model for ‘high impact public health research’. It is also not accidental that many American and European schools of public
(one can see the table published in the original article at www.nmji.in/archives/volume_19_4_Jul_Aug_2006/speaking_for_myself/Public%20health.pdf)
health (based on the so-called ‘hygiene’ and ‘tropical’ medicine models) that have been cornering international research funds for ‘sanitizing’ and intellectually ‘colonizing’ many African countries are looking for new markets for their knowledge.

The PHFI initiative also aims to create a capacity to train 10 000 people per year in public health by offering long and short term programmes with multiple degrees such as certificates, diplomas, masters, doctorates, etc. Is this what India actually needs? If we look at the manpower requirement in rural primary healthcare, it becomes evident that most shortages are those of ‘low-level’ primary care staff such as nurses and male health workers (Table I). Can such high-profile institutes provide the personnel needed to manage primary healthcare services? There is no doubt that the duality in public health education will breed elitism and produce an unfit and unwanted class of professionals. What it will also do is produce public health staff for the First World, at a cheaper price. Currently 4000–5000 doctors trained at public expense emigrate every year, at an estimated cost of US$ 160 million to the Indian exchequer.9

It is also necessary to mention the role of private foundation funding in this whole process. For instance, the Bill and Melinda Gates Foundation is a major partner in PHFI. The ‘grand challenges’ proposed by the Gates Foundation have turned critical challenges in public health into a narrowly conceived understanding of health as the product of technical interventions divorced from the economic, social and epidemiological contexts.10 Six of the 14 grand challenges in public health relate to vaccine development. It is possible that such a narrow technology-driven vision of public health will be the paradigmatic basis of the grand new public health in future. Should such a public health orientation set standards and determine the accreditation of public health education in India as has been proposed through the PHFI? When the market starts dominating the discourse of public health, it will only undermine academic autonomy as is already the case in management education.11 Indeed, it will create a discipline based on the rules and games of the market including profits and student-customers who can buy such an education.

A further substantial part of the PHFI’s budget is to come from unspecified private sector contributions. This is even more undesirable as it will distort public health priorities even further towards profitable interventions alone. Examples are legion of private sector funding skewing research agendas and findings. Thus, for instance, the ban on routine inclusion of antibiotics in animal feed in order to reduce antibiotic resistance in the general human population, effected in England after the outbreak of bovine spongiform encephalitis (mad cow disease), has been bitterly contested by public health scientists in the USA on the basis of research funded by the animal foods industry.12

It is not our argument that public health training does not need strengthening or that institutionalized education in this matter is not necessary. Both are very important. However, before we set up new institutions at great cost—whatever the source of funds—we must examine what ails the existing system. India already has institutions such as the National Institute of Health and Family Welfare, the National Tuberculosis Institute, the All India Institute of Hygiene and Public Health and so forth—some of which did remarkable public health work in the past. There are, however, problems with many of these institutions, such as lack of funds, lack of autonomy and so on, which need to be dealt with. Without doing so, to start new institutions is not only undesirable, but in a situation of fund constraint, also hugely wasteful economically.

ACKNOWLEDGEMENTS
Our grateful thanks to Jayati Ghosh for her comments. She is, however, not to be besmirched by the weaknesses of our arguments—or infelicities in them.

REFERENCES

1. Misra R, Chatterjee R, Rao S. India health report. New Delhi:Oxford University Press; 2003.
2. Baru R. Private health in India: Social characteristics and trends. New Delhi:Sage; 1998.
3. Sengupta A. Economic reforms, health and pharmaceuticals. Economic Political Weekly 1996;31:3155–9.
4. Sen G, Iyer A, George A. Class, gender and health equity: Lessons from liberalising India. In: Sen G, George A, Ostlin P (eds). Engendering international health. Massachusetts:MIT Press; 2002:281–312.
5. Government of India, Ministry of Health and Family Welfare. National health policy. New Delhi:Ministry of Health and Family Welfare; 2002.
6. Government of India, Ministry of Statistics and Programme Implementation. Note on morbidity and treatment of ailments: NSS 52nd round (July 1995–June 1996). Sarvekshana 2000;XXIII:59–67.
7. Wyon JB, Gordan JE. The Khanna study: Population problems in rural Punjab. Cambridge, Massachusetts:Harvard University Press; 1971.
8. Qadeer I, Nayar KR. Politics of pedagogy in public health. Social Scientist 2005:33:47–75.
9. Voluntary Health Association of India. Report of the Independent Commission on Health in India. New Delhi:Voluntary Health Association of India; 1997.
10. Birn A-E. Gates’s grandest challenge: Transcending technology as public health ideology. Lancet 2005;366:514–19.
11. Editorial. Higher education: From politics to market. Economic Political Weekly 2006;XLI:669.
12. Walters MJ. Six modern plagues: And how we are causing them. Washington:
Island Press; 2004.

Centre of Social Medicine and Community Health, School of Social Sciences, Jawaharlal Nehru University, New Delhi 110067, India. mohanrao@mail.jnu.ac.in

Published in VOLUME 19, NUMBER 4 JULY/AUGUST2006, The National Medical Journal of India


Public health needs a boost, not bickering

Speaking for Ourselves 224
K. SRINATH REDDY

Because things are the way they are,
things will not stay the way they are.
— Bertolt Brecht

It is difficult to disagree with passionate champions of public health such as Mohan Rao and Nayar. There is also no cause to disagree when they argue, in the initial part of their viewpoint exposition, that the social determinants of health and disease need to be identified and addressed through fundamental social changes that promote equity, access and affordability as essential characteristics of the health system. There is no dispute also when they argue for the strengthening of primary healthcare and affirm that it is governments that bear the major responsibility for ensuring the availability of healthcare to all sections of the people, through appropriately structured and adequately financed public health services.

There could be some minor differences, however, when they posit oral rehydration solution (ORS) and provision of safe water and sanitation as mutually exclusive public health programmes. While it is undoubtedly important to advocate, aim for and accomplish sustainable social promoters of health such as universal supply of safe drinking water, interventions such as ORS could still save thousands of young children who may fall victim to diarrhoea, till that salutary social objective is achieved. Obsession with technology should never drive public health polices or programmes, which need to address the determinants of health rather than merely attempt quick-fix solutions for disease. At the same time, public health should never shun appropriate use of suitable technologies to advance towards its goals.

Similarly, prevention and amelioration of anaemia in the general population, through policies for improvement of mass nutrition and creation of hygienic conditions where parasitic diseases are avoided, is a laudable and necessary objective. Till that goal is achieved, would not special attention to the detection and correction of anaemia in an especially vulnerable group of pregnant women, who run a high risk of pregnancy-related complications and death, serve a useful public health purpose? Public health needs a broad array of interventions which can make complementary contributions to create a comprehensive response to complex health challenges. An ‘either–or’ approachcan be self-defeating and may freeze the status quo till major social changes can successfully influence all of the social determinants.

However, my major area of discord with Mohan Rao and Nayar’s writing arises only when it strays from being a sound social critique, which it is in the initial section, to become a string of speculative comments on the role of the Public Health Foundation of India (PHFI) in the latter part of the article. The criticism of PHFI is based on assumptions that the PHFI Institutes would (i) follow an American model of education, (ii) produce public health professionals for an export market, (iii) create a cadre of elitist ‘managerial physicians’ distanced from primary healthcare, (iv) promote a technology-driven biomedical model of public health, and (v) result in neglect of existing public health training institutions.

None of the above assumptions are valid. The PHFI will mainly draw upon Indian experience and Indian expertise, while drawing up its curriculum and developing its learning resources. Future faculty would be drawn from available expertise in India and others trained abroad, in multiple reputed centres across the world. PHFI would establish academic partnerships with public health institutions from all regions of the world and access global learnings which are robust in academic content as well as relevant to the Indian context. Connectivity with public health institutions in other developing countries would be accorded a high priority. No exclusive relationship has been established with any American school of public health and each PHFI Institute will connect with a number of Indian and international partners. In the overall context of public health education, it is useful to draw upon the strengths of international partners, including American schools where appropriate, in core disciplines such as epidemiology, health economics, biostatistics and behavioural sciences. We should remember that American universities are also home to persons such as Amartya Sen, Noam Chomsky and Joseph Stiglitz, who are respected for their independent thinking and contributions to public discourse. Similarly, American universities also house many public health teachers and researchers who are not inimical to the interests of developing countries such as India. It is for us to evolve the models of education most relevant to us and engage with those who can help us in the areas of our identified needs. Countries such as Thailand, Iran and Bangladesh have much to teach us and we will learn from them, as we will also learn from institutions in Europe, North America and Australia.

Initially, the majority of those trained in the PHFI Institutes would be persons already employed in the State health services or health NGOs. The aim would be to add value to their role as serving functionaries in the health system. Simultaneously, efforts would be made to persuade states to create definitive positions for persons with public health expertise, so that even fresh graduates can be absorbed. The creation of a public health cadre has been recommended by several expert committees (Bhore Committee, 1946; Mudaliar Committee 1961; the Expert Committee on Public Health System 1996, constituted by the Government of India). PHFI would advocate for the creation of such a cadre, even while training existing physician and non-physician public health functionaries who are presently positioned in the health system. There would also be efforts to increase the absorption of public health professionals into the voluntary and private sectors in India. The purpose is to invigorate all components of the Indian health system with infusion of public health expertise.

Far from creating ‘elitist physician managers’, PHFI aims to provide multidisciplinary education and training to a wide range of public health resource persons. In a situation where neither nurses nor nutritionists have a major programme for training in public health and where public health law and public health engineering are rudimentary disciplines, PHFI hopes to evolve innovative models of education. Health management too would be an important educational stream, but only as one among several that PHFI would nurture.

In the present scenario, where are the programmes that can inform and influence sectors such as agriculture and urban planning to address public health needs? How many health economists are available in India to conduct policy-relevant studies and document the effects of distorted development on the health of the people, leave aside teach courses in this much-needed but almost non-existent discipline? At the grassroots, how many trained personnel are available for nationwide disease surveillance? Why are cause-specific mortality data not available for many common diseases? Training programmes are obviously needed at many levels and PHFI would try to facilitate them, along with other institutions.

The fact that PHFI derives a part of its initial funding from the Gates Foundation cannot be construed as evidence that its public health education programmes would have a tubular technovision. The broad-based education that PHFI envisages will encompass a clear understanding of the multiple determinants of health and provide the skill sets for undertaking multisectoral actions to advance public health. The Gates grant is an unrestricted grant and does not bind PHFI to any particular pattern of education or research.

PHFI is also committed to assist the growth of existing and other emerging public health training institutions in India. It would help to create a network of such institutions which can strengthen each other through sharing of technical expertise and conduct conjoint programmes in teaching and research. It must be recognized that the existing institutional strength in public health education and training is highly inadequate for developing human resources on a scale needed to transform the health services. If the present institutions were fully capable of delivering all that is required, why would the prevailing scene be so dismal both in terms of the available public health workforce and public health advocacy? Whether for advocating policy change or for implementing programmes, many more public health professionals are needed to generate and apply knowledge as relevant to public health goals.

Finally, it is misleading to suggest that PHFI has been created to place public health in private hands. The primary objective of PHFI is to strengthen public health services. The partnership with the Central and State Governments and their participation in the governance of PHFI and its institutes will ensure that the activities of PHFI are closely aligned to the priorities identified by the government and will readily respond to the needs of public health services. A number of State Governments have already communicated their interest in establishing such a close partnership. The voice of civil society would also be heard and heeded when it provides its inputs through various advisory bodies which would soon be established. It is only when public health continues to be neglected that the health of the people will be mostly transferred to private hands, by default. The PHFI’s mandate is to protect public health, not to undermine it.

To let the ‘status quo’ continue, because of false insecurity about new institutions or misplaced fears about hidden agendas, would be a grave disservice to the Indian people. To deliver an advance verdict of ‘guilt by suspicion’ on PHFI, even before it has started functioning, reflects neither natural justice nor scientific objectivity.

A new initiative should be judged neither by the best hopes of its friends nor the worst fears of its critics but by the reality of its activities as they unfold. It would be better for skeptics to closely monitor the activities of the PHFI, which is just born, and reserve their judgement till it opens its first Institute in 2008. It would be best, of course, if all well-meaning advocates of public health join hands and promote a sound framework for addressing India’s many health challenges.

Public Health Foundation of India, New Delhi, India; ksreddy@ccdcindia.org

Published in VOLUME 19, NUMBER 4 JULY/AUGUST2006, The National Medical Journal of India