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KAMLA NAGAR, DELHI - 110007 ANIMATION | VFX tel. - CHANGE

KAMLA NAGAR, DELHI - 110007 ANIMATION | VFX tel. - CHANGE

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DECEMBER 2011<br />

The draft Approach Paper of the 12th Plan was approved by the<br />

cabinet and presented to the National Development Council on<br />

October 22, 2011. The paper, which projects a growth rate of 9%<br />

for the 12th Plan, envisages that inclusiveness, an idea carried<br />

over from the 11th Plan, should lead to poverty reduction, increase<br />

in health outcomes and universal access of children to schools.<br />

It further states that inclusiveness should include providing<br />

opportunities for wage employment and livelihoods, and improved<br />

provision of water, sanitation and housing. All these have<br />

implications for improving child health and reducing childhood<br />

poverty.<br />

HEALTH<br />

The observation of the paper that the National Rural Health<br />

Mission (NRHM) focused on child health and pre-natal care and<br />

that it was now necessary to expand to a wider range of conditions<br />

gives the impression that targets in child health have already<br />

been achieved and therefore we can move on. Though offering a<br />

broader set of services is important given our changing<br />

epidemiological profile, the focus on child health cannot be<br />

diminished as India still accounts for the highest proportion of<br />

child deaths in the world.<br />

The Approach Paper states that central and state government<br />

expenditure on health has increased to 1.4% of GDP in 2011-12<br />

from less than 1% at the beginning of the 11th Plan. This<br />

calculation is based on Budget Estimates of 2011-12, whereas<br />

actual expenditures would be lower. Even otherwise, the estimated<br />

increased expenditure on health mentioned in the paper is way<br />

below the UPA government’s commitment to raise it to 3% of<br />

GDP. The paper agrees only to a rise of up to 2.5% of GDP, that<br />

too by the end of the 12th Plan, ie 2017.<br />

The paper mentions the High Level Expert Group (HLEG) on<br />

Universal Health Coverage constituted by the Planning<br />

Commission but does not give any clear commitment on the<br />

provision of universal healthcare. It says instead that the<br />

recommendations of this group will be an input for defining a<br />

“comprehensive health strategy for the next 10 years”.<br />

The accountability matrix defining the responsibilities of<br />

functionaries of the health, women and child development, water<br />

and sanitation departments at the block and habitation levels is<br />

a welcome step towards convergence of health and related<br />

services. However, to make it functional there must be a<br />

convergence in the performance of various functions at the state<br />

and district levels also.<br />

On the positive side, the 12th Plan does envisage a convergence<br />

of health and childcare services; but it is aimed at the lower<br />

levels of health and nutrition services, ie the anganwadi centre<br />

and sub-centre. In operational terms it will amount to having one<br />

ARTICLES<br />

1. 12th Five year Plan and the Health<br />

Accredited Social Health Activist (ASHA) positioned at every<br />

anganwadi centre (AWC), who will connect the AWC to the<br />

Auxiliary Nurse Midwife (ANM) at the sub-centre. The idea to<br />

have a sub-centre in every panchayat does not appear to be<br />

offering anything new as a sub-centre is anyway supposed to<br />

exist for every 5,000 population in the plains and for every 3,000<br />

population in the tribal and hilly areas, which works out to one<br />

for every panchayat already.<br />

The paper also promises to set up sub-centres and Integrated<br />

Child Development Services (ICDS) centres in all slums to provide<br />

primary healthcare to the urban poor, which is lacking at present.<br />

This step is welcome, but the provision of primary healthcare in<br />

urban areas requires a broader urban primary healthcare system<br />

and not just sub-centres and ICDS centres.<br />

The Approach Paper promises to make healthcare delivery more<br />

consultative and inclusive of the community by increasing users’<br />

participation through institutionalised audits, again a welcome<br />

move. But we should not forget that the community monitoring<br />

exercise under NRHM in the 11th Plan was carried out only in a<br />

few areas with strong civil society presence.<br />

A reduction of regional disparities in maternal and child health,<br />

in particular in the 264 high-focus districts, is also a programme<br />

focus already. The offer to provide funds for upgradation of<br />

primary healthcare centres (PHCs) and community healthcare<br />

centres (CHCs) to IPHS norms is also an already existing<br />

commitment of the government.<br />

The Approach Paper also mentions making district hospitals<br />

district knowledge centres for training health workers like nurses,<br />

mid-level health workers and offering courses like Bachelor of<br />

Rural Healthcare/Primary Practice. This would help provide a<br />

cadre of qualified health professionals to attend to a defined set<br />

of basic healthcare services. This is one way to get qualified<br />

practitioners in allopathy to reach India’s remote rural areas.<br />

Several examples of NGOs providing community healthcare using<br />

trained rural health workers have shown the effectiveness of<br />

such an approach.<br />

It should be implemented across the spectrum for all levels of<br />

health functionaries including medical professionals and applied<br />

to men from these communities also.<br />

In terms of financing healthcare, the paper acknowledges the<br />

high out-of-pocket health expenses of Indians and offers a twopronged<br />

approach of expanding public provisioning of<br />

healthcare and public financing of care using the private sector,<br />

but subject to appropriate regulations and oversight. Once the<br />

government becomes a buyer of a set of services from the private<br />

sector it will be in a commanding position to ensure that the<br />

private sector functions according to state regulations.<br />

In addition to expanding public provisioning and bringing publicly<br />

financed private players under a regulatory regime, the paper<br />

also envisages establishing a health insurance plan for every<br />

citizen. The details in this regard are likely to emerge from the<br />

report of the HLEG which is due in November.<br />

NUTRITION<br />

The need to restructure the ICDS focusing on the 0-3 age-group,<br />

promoting decentralisation of administration, ensuring quality,<br />

participation of women’s/mother’s groups and strengthening<br />

convergence with related schemes is clearly articulated in the<br />

paper, though the roadmap is not spelt out. The paper states that<br />

the recommendations of the inter-ministerial working group on<br />

ICDS constituted under the PM’s Nutrition Council are awaited.<br />

A shift towards family- and community-based interventions such<br />

as breastfeeding is also mentioned. In this regard a national<br />

campaign on universal breastfeeding linked to a programme for<br />

wider and enhanced provision of nutrition to breastfeeding<br />

mothers, should be taken up on a scale comparable to the<br />

erstwhile family planning programme, as this intervention is<br />

crucial for the survival of 0-6-month- old children.<br />

CONCLUSION<br />

The paper points out that India’s labour force will increase by<br />

32% in the next two decades, while that of industrialised countries<br />

and China will decline by 4% and 5% respectively and that<br />

therefore we should reap the benefits of this demographic<br />

dividend. This would however demand that we ensure the health,<br />

nutrition and education of children who will form the labour force<br />

The paper’s emphasis on local production of drugs is a very for the coming decades. On the contrary we find that the Infant<br />

important measure as public sector drug companies have not Mortality Rate, a key indicator of health status, is at 50/1,000 live<br />

been given encouragement for several years. Drug self- births according to Sample Registration Survey (SRS) 2009,<br />

sufficiency is important in the context of the IPR regime and a published in early-2011 and is still higher at 70 and 66<br />

declining public sector in this field, coupled with the fact that respectively in UP and MP according to the recent Annual Health<br />

several Indian private sector giants have been taken over by Survey (AHS) 2010-11. The AHS was conducted in the nine states<br />

foreign multinationals.<br />

of Rajasthan, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand,<br />

Orissa, Madhya Pradesh, Chhattisgarh and Assam. These states<br />

The paper also deals with training and hiring women from alone account for 70% of infant deaths, 75% of under-5 deaths<br />

marginalised communities in the healthcare workforce. But this and 62% of maternal deaths in India, which demand urgent<br />

approach should not be only for ASHAs, ANMs and AWWs. attention. �<br />

2. Euro Zone Crisis Clouds Recovery in Europe & Central Asia<br />

Economic recovery is underway in the Emerging Europe and<br />

Central Asia (ECA) region, but at a slow pace and is at risk from<br />

the troubled Eurozone, according to the World Bank at a press<br />

briefing during the World Bank/IMF Annual Meetings 2011.<br />

“Most countries in Emerging Europe and Central Asia have<br />

recovered from the global economic crisis, but growth has<br />

returned at lower rates than pre-crisis trends in most of the<br />

region. The region is expected to record a real growth rate of 4.3<br />

percent in 2011, which is one of the lowest of any developing<br />

region,” said Philippe Le Houérou, World Bank Vice President<br />

for the Europe and Central Asia Region. ”The slow recovery in<br />

the region may be establishing a ‘new normal’ of lower economic<br />

growth rates in many of the region’s countries.”<br />

Le Houérou cautioned, ”The sovereign debt problems in<br />

Western Europe pose challenges to the sustainability of this<br />

relatively tepid recovery. The Eastern Europe and Central Asia<br />

region is especially dependent on Western Europe as an export<br />

market and a source of finance and migrant remittances, so slower<br />

growth in the West will hurt. The region’s strong financial<br />

linkages to Western Europe, which were a source of growth during<br />

the boom years in Central and Eastern Europe, are now a source<br />

of vulnerability for some countries.”<br />

According to the briefing, most countries in the region have<br />

recovered the output losses suffered during the 2008-9 global<br />

economic crisis. In fact, GDP remains below its 2007 level in<br />

only eight out of 30 ECA countries. Helped by high commodity<br />

prices, the countries farther to the east in the region have done<br />

much better since the crisis than those to the west.<br />

But ECA’s recovery signals a lower growth gradient than the<br />

pre-crisis rates. There has been a noticeable reduction in growth<br />

prospects: countries in the region may need to prepare for growth<br />

rates that are 2 percentage points of GDP less than what they<br />

were before the global crisis.<br />

Job losses remain a concern throughout the region<br />

Unemployment increased significantly during the crisis ¯ in 2008<br />

it was about 10 percent, while as of about early 2011, the overall<br />

unemployment rate for the region is at 13 percent. Meanwhile,<br />

youth unemployment remains a particular concern at 27 percent.<br />

To address this, governments have been trying to limit the effects<br />

of the crisis on labor markets through a wide range of employment<br />

programs. Some jobs are returning and unemployment has<br />

dropped since the early 2010 peak, with only a few exceptions<br />

(Bulgaria, Croatia, Slovenia, Moldova, and Hungary). But the<br />

job turnaround will remain gradual even if the economic recovery<br />

is sustained. Increases in output per worker are driven by<br />

increases in hours worked, but these are still below their precrisis<br />

levels. Therefore, the room for further increases in<br />

productivity and hours worked could delay the recovery in<br />

employment.<br />

Public finances have weakened, especially in the west<br />

The global crisis has had a severe negative impact on public<br />

finances. During pre-crisis times, structural fiscal imbalances were<br />

masked by revenue over-performance, as buoyant economies<br />

yielded more taxes than governments often expected. During<br />

the crisis, there was sharp fiscal deterioration in most countries<br />

in the region. Public debt has gone up in many countries, leaving<br />

governments less room to counter any economic slowdown than<br />

they had in 2007.<br />

Fiscal adjustment has often been in the form of ad hoc expenditure<br />

cuts. The immediate challenge in many countries is to begin<br />

more systematic fiscal consolidations that are socially sustainable<br />

and growth-friendly. Most countries in the region have to<br />

prepare for aging populations, which are adding to the fiscal<br />

pressures in health care and pension expenditures even as the<br />

economic turbulence over the last three years has left<br />

governments deeper in debt.<br />

Banking flows have been stable in the west but have<br />

fallen in the east<br />

According the briefing, financial flows have been stable in<br />

Central and Southeastern Europe, but have not been<br />

growing. Western European banks have so far maintained<br />

operations in the member and candidate countries of the European<br />

Union. In the countries further to the east, including oil and<br />

commodity exporters, there have been pullbacks, with the<br />

developments in these economies mimicking those in East Asia<br />

during the 1997-98 crisis.<br />

The decline in credit to firms and households from pre-crisis<br />

levels was sharp, but necessary in some countries. While credit<br />

has been slow to recover, there are encouraging signs in most<br />

countries in the region. Only five countries in the region are still<br />

experiencing contractions in credit.<br />

Risks are rising again<br />

The main risk is that of spillovers from the sovereign debt crisis<br />

in some of the Euro area economies. The rescue packages have<br />

not assured markets, and uncertainty has spread to larger<br />

economies. The sovereign debt problems in southern Europe<br />

and Ireland can affect the region in both direct and indirect ways,<br />

operating through both financial and nonfinancial transmission<br />

channels.<br />

Given the importance of Greek banks in the Balkans and Italian<br />

banks in Central Europe, any problems they have would have<br />

direct effects in those countries. Some of the banks most active<br />

in emerging Europe ¯ especially those based in Austria and<br />

Sweden ¯ have limited exposure in Greece, Italy, Ireland, Portugal,<br />

and Spain, but interconnectedness on funding markets could<br />

result in adverse consequences.<br />

Western European countries are the most important trade partners<br />

for most countries in the region, and weaker economic prospects<br />

in Europe will dampen their recovery. There are already signs of<br />

declines in export demand. Export levels in 2011 were expected<br />

to be above those reached in 2008, but recovery of exports has<br />

so far been sluggish. Now a slowdown in global activity has<br />

increased the downside risks, most sharply for countries with<br />

close economic linkages with the Eurozone.<br />

According to Indermit Gill, World Bank Chief Economist for<br />

the Europe and Central Asia Region, ”Governments in Emerging<br />

Europe have to again become fiscally resilient. Public debt<br />

buffers have shrunk in most of the region. With the sovereign<br />

debt crisis in advanced economies, markets are paying more<br />

attention to fiscal vulnerabilities. They have to do this now, both<br />

to prepare for a possible economic slowdown and to deal with<br />

the rising fiscal burden of pensions and healthcare of aging<br />

populations. Much of the region needs to make transparent plans<br />

for reforming public expenditures, and begin implementing them<br />

soon.”<br />

Gill emphasized that, “The most pressing problem facing many<br />

countries is persistently pervasive joblessness. The private<br />

sector has to be freed to generate economic growth and jobs ¯ the<br />

rules and regulatory structures for doing business can be greatly<br />

improved with no additional expense for taxpayers. With almost<br />

a third of all young adults out of work, governments in the region<br />

should put the modernization of labor market regulations and<br />

social welfare systems at the top of their reform agenda. Such<br />

structural reforms to increase entrepreneurship and inclusion<br />

are simultaneously an immediate, medium-term, and long-run<br />

priority.”<br />

The World Bank is supporting the recovery<br />

World Bank support reached $6.1 billion this fiscal year, including<br />

$5.5 billion from the International Bank for Reconstruction and<br />

Development (IBRD) and $650 million from the International<br />

Development Association (IDA). Turkey ($1.4 billion), Romania<br />

($1.1 billion), and Poland ($1.1 billion) were the largest borrowers.<br />

The sectors receiving the most funding were energy and mining<br />

($1.9 billion), public administration ($1.7 billion), and health and<br />

social services ($1.2 billion).<br />

Along with funding, the Bank provides over 180 economic and<br />

technical reports every year in the Emerging Europe and Central<br />

Asia region to inform government reform efforts and prioritize its<br />

own financial support. It offers analytical support and<br />

encouragement to governments to improve labor market and<br />

social security systems and expand selected social safety net<br />

programs. The Bank is advising governments on how to fix less<br />

efficient public programs and improve social services so that<br />

their benefits reach those who need them most. �<br />

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