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Key Recommendations For the Primary Health Sector

1) Public health spending of federal and state governments should rise from the 2004/05 combined level of 0.9 percent of GDP to 3 percent by the year 2009. Per our estimates of the financial requirements of scaling up health services in rural UP and MP, additional public spending of 288 Rupee’s (Rs.) per capita is needed for UP and Rs. 262 per capita for MP. Thus, in UP, per capita health spending should see an increase of roughly 4-fold and MP roughly 3-fold from their current levels.

2) The increased public health spending should finance infrastructure improvements in the rural sub-centers, primary and community health centers and the district hospitals. Additionally, much higher levels of spending are needed for essential drugs and supplies, vaccines, medical equipments, laboratories, and the like. In terms of human resources in the health centers, state governments need to appoint more auxiliary nurse midwives (ANMs), trained birth attendants, technicians, pharmacists, doctors and specialists.

3) In terms of mobilizing additional funds for health, our research suggests that money should mainly come from cutting unproductive government expenditures (both central and state governments) relative to GDP rather than by raising revenues relative to GDP. However, we do suggest levying a 2 percent Health Sector tax for the next 4 years. In order to raise additional resources for the social sectors domestically, we recommend replacing the current subsidy regime with “life-line tariffs,” in which all of India’s below poverty line rural citizens would be ensured a fixed, but limited, amount of water, electricity, and fertilizer at zero price to ensure that every family can at least meet its basic needs. Above that fixed amount, families would be charged a proper tariff to cover the costs of supplying those services in amounts in excess of basic needs.

4) In order to improve the delivery of health services in UP and MP, we suggest supporting community oversight of village-level health services, including panchayat responsibilities for oversight of sub-centers, and PHCs.

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