Twenty three children died within 24 hours in an Uttar Pradesh government hospital where supply of liquid oxygen had been stopped since officials ostensibly failed to settle dues with the supplier.
Whether the deaths were a result of the oxygen shortage is now the subject of an investigation, but the way one of the biggest government-run hospitals in Gorakhpur — the home district of the chief minister — ran short of a critical resource points to a systemic problem in how public finances are managed in the country.
In the case of the Gorakhpur hospital, officials failed to clear Rs 70 lakh in bills pending with the hospital’s sole supplier despite repeated reminders. In May, the college administration sent a proposal of Rs 37 crore to the state government for improving health facilities. The state forwarded the proposal to the central government for approval and allocation of funds, but not a penny has been released.
A similar story has panned out for years in several public sectors.
In the 2007-08 financial year, more than Rs 1 lakh crore was unspent by ministries and departments, according to a Computer and Auditor General (CAG) of India.
In 2004-05, 17%, or Rs 1,332 crore, of the total fund that ministry of human resources development gave to states and union territories for education expenditure was not used.
More recently, in a performance audit of the Reproductive and Child Health scheme under the National Rural Health Mission (NRHM) tabled in the Parliament last month, CAG said the cumulative unspent amount in 27 states increased from Rs. 7,375 crore in 2011-12 to Rs. 9,509 crore in 2015-16.
India has limited financial resources. And almost every sector has been complaining about inadequate allocation of funds. For instance, the National Health Policy asks for government spending on health to be raised to 2.5% of GDP, compared to around 1.1% at present.
There are a number of reasons why money is not spent.
For centrally-sponsored schemes (CSS), the…