Over-Centralisation in Health Policy: A Threat to India’s Federal Fabric
The increasing centralisation of health policymaking in India signals a disturbing departure from the federal principles enshrined in the Constitution. While the Centre's expanded role in healthcare is often justified on the grounds of efficiency and uniformity, this trend undermines states' autonomy, weakens health outcomes, and risks turning India's quasi-federal structure into an authoritarian hierarchy.
Health Governance and its Federal Roots
Under the Indian Constitution, health is a state subject (Entry 6, List II, Seventh Schedule), granting states the primary responsibility for healthcare delivery. However, the Centre’s role is significant, wielding influence through centrally sponsored schemes (CSS), national health programs, and the allocation of resources. Key interventions like the National Health Mission (2005), Ayushman Bharat (2018), and the replacement of the Medical Council of India with the National Medical Commission (NMC) in 2019 have gradually pulled more decision-making power to Delhi. While these moves are framed as ‘streamlining’, the deeper consequence is the erosion of state-specific health solutions.
The pandemic laid bare the structural limitations of this centralised model. For example, initial vaccine allocations during COVID-19 disproportionately favoured certain regions, and logistics were hampered by the opacity of the centralised distribution system. In a vast country with diverse health challenges, such one-size-fits-all approaches by the Centre overlook state-specific nuances, raising serious governance concerns.
Evidence of Overreach: A Pattern of Autonomy Erosion
- Domicile-Based PG Medical Admission: The Supreme Court’s recent invalidation of domicile reservations for PG medical courses, citing Article 14, undermines states’ ability to address local healthcare workforce shortages—a critical need in underserved areas. While the principled commitment to meritocracy is laudable, overlooking regional disparities in healthcare access reflects a blind spot in judicial reasoning.
- Ayushman Bharat: Touted as the world’s largest public health insurance scheme, its implementation often sidelines successful state-led models, such as Tamil Nadu’s Chief Minister’s Comprehensive Health Insurance Scheme. States that preferred independent schemes were coerced into aligning with central directives under financial duress, effectively stifling innovation in health governance.
- 15th Finance Commission Conditions: Health grants tied to central priorities—not states’—exacerbated resource mismatches. For instance, poorer states like Bihar or Madhya Pradesh, with higher disease burdens, lacked the flexibility to allocate funds to pressing health concerns such as maternal mortality.
- Epidemic Act & Disaster Management Act: Invoked during COVID-19, these laws granted sweeping powers to the Centre. However, their centralised execution led to glaring inefficiencies, from oxygen supply crises to sluggish availability of ventilators.
Why Over-Centralisation Weakens Outcomes
The dangers of over-centralisation are multidimensional. First, it creates policy uniformity at the expense of local specificity. Kerala, with its ageing population, demands long-term geriatric care policies, while Uttar Pradesh still struggles with reducing maternal and neonatal mortality—needs that centrally designed schemes often fail to adequately address.
Second, bureaucratic bottlenecks stymy across-the-board efficiency. States have reported delays in fund disbursements under the National Health Mission, paralysing health program execution. Even flagship programs like Ayushman Bharat have faced criticism for opaque fund transfers and high administrative overheads.
Third, the financial dependence of states has deepened. According to the 2023-24 budget, states contributed over 40% of spending in centrally sponsored schemes but retained minimal decisional authority. Such asymmetry fosters paternalism rather than partnership between the Centre and states.
The Other Side: Why the Centre Argues for Centralisation
The strongest argument for centralisation rests on the principle of national cohesion in public health. The Centre argues that initiatives like Ayushman Bharat address the policy fragmentation caused by individual states pursuing independent health insurance schemes. Similarly, the Ayushman Bharat Digital Mission aims to create a unified, nationwide health database to streamline care delivery and improve patient mobility across states.
Another defence is drawn from global comparisons. The COVID-19 pandemic underscored the need for coordinated national responses to public health emergencies. Evidence from countries like New Zealand reveals the success of a strong central apparatus in rapidly implementing lockdowns, ramping up testing, and centrally managing vaccines.
A Global Contrast: Federalism in Germany’s Health System
Germany, as a federal state with 16 Länder, offers a striking contrast to India’s health governance. While health insurance in Germany is largely decentralised and managed by individual states, the federal government facilitates coordination through frameworks but refrains from dictating terms. For instance, when faced with the COVID-19 crisis, Germany’s states retained control over hospital operations and public health responses, allowing them to meet local needs more efficiently. This model illustrates that effective decentralisation, coupled with a clear framework for inter-governmental collaboration, can yield stronger health outcomes without sacrificing federal equity.
A Way Forward: Respecting and Strengthening Federalism
The health of India’s democracy—and its citizens—rests on recalibrating the balance between centralisation and state autonomy. While the Centre plays a pivotal role in setting broad policy objectives and intervening in emergencies, its current approach undermines the essence of cooperative federalism.
- Fiscal Decentralisation: The 16th Finance Commission must consider granting unconditional health funds to states, allowing more flexibility for them to allocate resources according to local needs.
- Policy Adaptation: National health frameworks can outline priorities but should leave implementation details to states. Kerala’s unique success with localised COVID-19 containment demonstrates the potential of decentralised, state-driven approaches.
- Strengthening Local Governance: Investing in municipal and panchayat-level health governance can bridge gaps in service delivery. States can tailor this focus to address disparities within their territories.
Ultimately, the challenge is not to reduce the Centre’s role but to pivot towards collaboration. The proposed Inter-State Council for Health could serve as a platform for jointly formulating health policies, ensuring that states are not mere implementers but co-designers of the nation’s health strategy.
Conclusion
India risks undermining both its federal structure and its goal of equitable healthcare by entrenching an over-centralised approach. While national cohesion is critical, an approach that recognises and respects state specificity proves more sustainable. A judicious balance must be struck—ensuring the Centre functionally supports rather than supplants state health governance. Without embracing cooperative federalism, the broader promise of inclusive growth may remain unrealized.
- Under the Indian Constitution, which Schedule specifies that "health" is a State subject?
- a) Fifth Schedule
- b) Sixth Schedule
- c) Seventh Schedule
- d) Ninth Schedule
Answer: c) Seventh Schedule
- Which of the following laws grants the Centre power to intervene in public health emergencies?
- a) National Commission for Allied Health Professionals Act, 2021
- b) Epidemic Diseases Act & Disaster Management Act
- c) Clinical Establishments Act, 2010
- d) Drugs and Cosmetics Act, 1940
Answer: b) Epidemic Diseases Act & Disaster Management Act
Practice Questions for UPSC
Prelims Practice Questions
- Placing health in the State List implies that states should retain primary responsibility for healthcare delivery, even if the Centre influences policy through schemes and funding.
- Uniform national health schemes necessarily improve efficiency because standardisation reduces administrative overhead across all states.
- Conditional grants tied to central priorities can create resource mismatches for states with higher disease burdens and different urgent needs.
Which of the above statements is/are correct?
- Invoking the Epidemic Act and the Disaster Management Act during COVID-19 increased the Centre’s powers, but the article argues their centralised execution led to notable inefficiencies.
- Judicial invalidation of domicile-based reservations in PG medical admissions is portrayed as potentially constraining states’ ability to address local workforce shortages.
- Ayushman Bharat is presented as replacing state discretion entirely by constitutionally transferring the subject of health from the State List to the Union List.
Which of the above statements is/are correct?
Frequently Asked Questions
How does the Constitution’s scheme of federalism shape health governance in India, and where does central influence enter the picture?
Health is placed in the State List (Entry 6, List II, Seventh Schedule), making states primarily responsible for healthcare delivery. Yet the Centre significantly shapes priorities through centrally sponsored schemes, national programmes, and resource allocation, which can shift decision-making away from state-specific needs.
Why does the article argue that ‘one-size-fits-all’ health policymaking can worsen outcomes across states?
States face sharply different health profiles: Kerala’s ageing population needs stronger geriatric care, while Uttar Pradesh struggles with maternal and neonatal mortality. Centrally designed templates risk ignoring such local specificity, leading to mismatched interventions and weaker governance responsiveness.
In what ways did the COVID-19 experience expose limitations of a centralised health policy approach?
The article points to early vaccine allocation concerns and logistical hurdles aggravated by opacity in centralised distribution. It also notes that centralised execution under the Epidemic Act and Disaster Management Act saw inefficiencies such as oxygen supply crises and delayed ventilator availability.
How can financial architecture deepen centralisation even when states contribute significantly to spending?
The article notes that in 2023-24, states contributed over 40% of spending in centrally sponsored schemes while retaining minimal decisional authority. This creates an asymmetry where funding responsibility does not translate into policy autonomy, fostering paternalism rather than partnership.
What is the core policy dilemma highlighted in the debate over centralisation versus state autonomy in health?
The Centre defends centralisation on grounds of cohesion—reducing fragmentation and enabling tools like a unified digital health database for mobility across states. The counter-argument is that coercive alignment and conditional grants can suppress successful state models and reduce flexibility where disease burdens and priorities differ.
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