Expenditure on Health and Education in Two Districts

Centre for Budget and Policy StudiesBangalore

Team members: Vinod Vyasulu, Sharadini Rath, Poornima Vyasulu, Madhusudhan Rao B.V., Ganapati Tarase

Purpose and Audience

To track health and education expenditure at the local government level where most of it is accounted – the Zilla Panchayat

Examine the basis for expenditure decisions and trends over years

For whom? – the main audience is the ZP (administrators and elected representatives) and CSOs who work in the area

Methodology

Budgets of past few years and sector related data from two ZPs and Government of Karnataka

Right to Information Act with the State Establish relationship with district

government, interviews (formal and informal), present preliminary analysis to get reaction and identify gaps in knowledge

Focus on processes of decision making and their relationship with numbers

The two districts

Census 2001

Chitradurga Udupi

Numbers % Numbers %

Population 1517896   1112243  

Total Workers 721835 47.6 488173 43.9

Main workers 576035 79.8 417287 85.5

        Agricultural 395706 68.7 141198 33.8

        All others 180329 31.3 276089 66.2

Marginal Workers 145800 20.2 70886 14.5

The two districtsHealth Indicators Data Year Chitradurga Udupi

% Institutional deliveries 2003-04 47.09 95.12

Life expectancy at birth 2001 64.60 67.80

Infant Mortality Rate 2001 54 45

% Complete immunisation 2003-04 80.80 93.80

% Safe Deliveries 2001 53.80 91.50

Education Indicators Data Year Chitradurga Udupi

Total Literacy Rate 2001 55.98 72.88

Male Literacy Rate 2001 64.80 78.34

Female literacy rate 2001 46.74 68.04

Rural Literacy Rate 2001 52.61 70.97

Urban Literacy Rate 2001 71.25 81.26

SSLC Results (X class) 2003-04 57.95 77.27

The two districts

Chitradurga dominantly agricultural, with low literacy rates (especially female), poor health indicators

Udupi dominantly non-agricultural, with better literacy rates, much better health indicators

Study how the two ZPs manage their finances in the crucial areas of health and education services

Are there lessons to be learnt?

ZP accounts analysis

Government remains the dominant provider of both services (especially basic education, upward of 80% of students in classes I to X attend government run or aided schools)

~ 90% of expenditure on health and education on personnel salaries

All ZP funds for both come entirely from the State; no own revenue

Actual expenditure consistently lags behind intended allocations – promises?

ZP accounts analysis

All expenditure taken into account: running costs of schools and health facilities, salaries, capital, material, scholarships, and all schemes (SSA, etc)

A method for normalising such expenditure for comparison across districts – link to outcomes

Number of patients served, and students enrolled in government run and aided schools

Comparative analysis

 Year

Rs per patient per year Rs per student per year

Chitradurga Udupi Chitradurga Udupi

2001-02 108.64 102.31 2562.82 3094.66

2002-03 115.77 89.92 2496.94  NA

2003-04 118.87 78.54 3197.26 3516.77

2004-05 67.72 84.52 3538.53 3792.79

2005-06 129.80 88.42 4188.03 4546.95

Average 108.16 88.74 3196.72 3737.79

% Safe Deliveries (2003-04) 53.80 91.50    

Literacy Rate (2001)     55.98 72.88

ZP function analysis

No system of raising demand based on need assessment at district level

No data based political process to connect ZP with State

Administrative systems with loyalties to the State rather than to the local institution of governance (a deep and systemic feature of all LSGs)

Decision making processes at local level severely constrained by State - finances and personnel

ZP accounts analysis

Line item allocation of funds Relationship between expenditure and

indicators? Surprising results – perhaps accident of

these two particular districts? Since the State is the sole financier,

looked at State accounts for the same years, to estimate how much the State spends in all districts, and relative picture

State accounts analysis

Calculate district-wise expenditure on basic health services and basic education

Many items had to be pulled together – of the total expenditure on health ~40% accounted in ZP, rest spent directly by State (larger hospitals, medicines, etc)

Most expenditure on basic education (class I to X) through ZP

State does not clearly reflect ZP accounts

State accounts resultsAverages (2001- 06)  

Rs per student per year 3454

Rs per patient per year 330

Expenditure and indicators(across 26 districts)

Correlation Coefficients (0.01 level confidence)

Education Rs per student

Literacy rate (2001 census) 0.62

Education Index (HDR 2005) 0.61

Health Rs per patient

% Safe deliveries (2003-04) -0.39

Interpretations

For education: expenditure higher in districts where the indicators are better, such as more literacy and a higher education index – strong result

For health: there is a small possibility that those districts where some indicators are poor might get more funds – weak result

Is there a formula for allocating funds that uses local data on need, such as indicators? – apparently not

Consequences

The State policy for social sector spending is based on principle of equity? Or not?

How do individual ZPs use such data to raise need based demand?

What is the functional relationship between ZP and State?

Who takes responsibility? Accountability? How do CSOs vet performance?

Recommendations

Remove State from ZP level functioning, hand over funds and functionaries - based on clearly argued demand

ZP decisions on need, spending, hiring Face the heat of poor performance:

transparency and accountability Local pressure on delivery issues Strengthen local government (not just

administration)