Differential Financing for Untied Funds under National Rural Health Mission: an Evidence Based Approach

To achieve the objectives of Millennium Development Goals, the Government of India has taken initiatives to enhance healthcare financing under its flagship programme "National Rural Health Mission" (NRHM). Its main objective of NRHM is to build a strong three-tier public health infrastructure. It also provides untied funds under the set of "NRHM Additionalities" to cover unforeseen expenditure and other innovative ideas. This paper focuses on the flow of funds under untied fund category, their utilization and problems in utilization. The study was conducted in two districts of Karnataka, namely, Udupi and Bangalore-urban. Data on the flow of untied funds were collected from 92 stakeholders from 46 health facilities. Based on the data collected for three years (2008-2009, 2009-2010 and 2010-2011), the paper proposes an alternative approach of financing based on per capita norms. This serves the purpose of equity and efficiency more effectively.