Trends in rural fiscal decentralisation in India’s Karnataka state: a focus on public health

Megha Rao,Hema Swaminathan,Arnab Mukherji

doi:10.5130/cjlg.vi25.7583

Megha Rao, Hema Swaminathan + Show 1 more

Open Access

https://doi.org/10.5130/cjlg.vi25.7583

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Abstract

For decades, decentralisation reforms have been seen as a powerful instrument by health policy advocates to improve health sector performance in developing countries. In India, the 73rd Constitutional Amendment introduced in 1992 called for strengthening the fiscal autonomy and service delivery capacity of rural local governments. This paper explores how decentralised governance influences public health sector resource allocation, equity and efficiency in rural Karnataka. For this, the authors analysed administrative data published by the Karnataka state government to create tailored standardised performance measures that capture the degree of local governments’ fiscal discretion in implementing public health programmes from 2011–18 at the district level. The findings highlight sector-specific differences in fiscal autonomy, ranging from high local discretion over funds in the nutrition sector to very limited discretion in the medical and public health sector. They also show that decentralised public health funding is not well-targeted to areas of greatest need in Karnataka

Highlights

While motivations for fiscal decentralisation1 have been diverse, strengthened governance through increased accountability lies at the heart of its promise as an instrument for improving government performance (Mitchell and Bossert 2010)
This paper aims to explore fiscal decentralisation in rural public healthcare in the Indian state of Karnataka, one that has been at the forefront of that process
Devolved allocations for health-related sectors entrusted to Panchayati raj institutions (PRIs) remain inadequate

Summary

Introduction

While motivations for fiscal decentralisation have been diverse, strengthened governance through increased accountability lies at the heart of its promise as an instrument for improving government performance (Mitchell and Bossert 2010). While fiscal decentralisation research has generated a considerable body of literature, most of it is very general. It rarely considers sector-specific differences (Arends 2017). In India, given that all levels of government – union (ie federal), state and local – are involved in providing public health services, it is crucial to understand fiscal decentralisation within this sector in greater detail, and to evaluate the extent of involvement and authority of rural local bodies. From a public-choice perspective, decentralisation is expected to play an instrumental role in ensuring that public sector allocations to local governments for health reflect high responsiveness to local priorities and sectoral responsibilities (Schwartz et al 2002; Mitchell and Bossert 2010)

Objectives

Findings

Conclusion