The most recent ‘Fiscal Health Index’ (FHI) released by NITI Aayog has placed West Bengal,once the country’s leading economy, in the lowest tier. The observation based on key elements like quality of expenditure, revenue mobilization, fiscal prudence, debt index, and debt sustainability reflects the poor macroeconomic stability of the state. With high debt, large interest payment, weak revenue generation and reliance on non-tax revenue, the state is facing critical challenges on fiscal sustainability.
There is little scope to argue that the fiscal strain directly compromises the healthcare ecosystem. Over the years West Bengal has received substantial financial support from the Central Government through the National Health Mission (NHM), Prime Minister-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), Finance Commission and so on. A careful analysis of the allocation, release and expenditure of NHM for the past fifteen years reveals persistent under-utilization of funds with high unspent balances carried forward from the previous years. Furthermore, the state’s own health sector allocation continues to be around 5-6 per cent which is well below the National Health Policy 2017 recommendation of at least 8 per cent of the budget to health.
The recurring concern has been the gap between approved resources and their translation into measurable improvements in service delivery, infrastructure, workforce strengthening, and public health outcomes. Unlike NHM, which largely finances recurring health services to achieve universal access to equitable, affordable and quality healthcare by strengthening health systems and capacities, PM-ABHIM focuses on long-term capital expenditure filling the critical gaps in strengthening public health laboratories, critical care infrastructure, disease surveillance systems, and emergency response mechanisms. The estimates of the latest National Health Account highlight a significant healthcare burden for West Bengal.
Per capita out-of-pocket expenditure (expenditures directly made by households at the point of receiving health care) reaches Rs 4183 as compared to the national figure of Rs 2767, accounting for 62.3 per cent of the total health expenditure well above the national estimate of 39.4 per cent. Until June 2026, when the newly elected Government led by Chief Minister Suvendu Adhikary signed the Memorandum of Understanding to implement the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY), West Bengal was effectively the only State outside the flagship national healthcare framework which aims to provide health insurance and financial protection to the underprivileged. A health-sector assessment for the Sixteenth Finance Commission by the National Health Systems Resource Centre indicates that West Bengal faces an alarmingly high infrastructure deficit of Rs 8,337 crore and a service delivery gap exceeding Rs 1,500 crore undermining the health-system resilience of the state.
Financial indiscipline, administrative misgovernance and we ak accountability which persisted over much of the past fifteen years have led to fragmented planning, inadequate investment in public health infrastructure, delayed reforms, and the diversion of scarce fiscal resources away from long-term health system strengthening. In this context, the Sixteenth Finance Commission (for the award period 2026-31) sets a strategic opportunity to catalyze a fundamental transformation of West Bengal’s health system.
Decisive shift towards a performance- and compliance-driven fiscal framework in place of specific, segmented central grants mandates a stronger institutional efficiency which had long been ignored by the previous Government in the state. Strengthening local governments, accelerating digitalization, improving real-time monitoring, and ensuring transparent and efficient use of public resources for future healthcare in West Bengal built on greater economic resilience and social justice will advance India’s vision of becoming a developed nation by 2047.
(The writer is former Principal Advisor, Ministry of Health and Family Welfare, Government of India.)