Donor Funding to Domestic Budgetary Support Transition of National AIDS Control Programme in India

The National AIDS Control Programme (NACP) of India for its fourth phase had budgeted a resource envelope of Rs 143 billion ($2.70 billion) for a period of 5 years from 2012 to 2017. The resource envelope of NACP in India has been dominated by donor support over several of its phases. The donor funding provided support particularly over three phases of NACP of the programme to create capacity to ensure effective implementation of the programme. During first three phases of planning of NACP the funding gaps were sufficiently large and within the mandate of MDGs various donor partners supported the programme. 

Even though the projections of US based National Intelligence Council issuing a controversial projection that India would have 25 million HIV (about 5% of adult population) by 2010 (HIV/AIDS: India's Many Epidemics by Jon Cohen published in Science 23 April 2004), it did not discourage developing strong links with the international community. On this the then Health Minister Shatrughan Sinha publicly criticized U.S. Ambassador Robert Blackwill and Microsoft CEO Bill Gates for referencing the figures, saying, “I fail to understand how people holding such important positions can stand on our soil and say that India will have 25 million sufferers of AIDS by 2010.” As contrary to this the estimated number of people living with HIV/AIDS in 2011 was 2.08 million and not 25 million.

The resource envelope of NACP funds remained dominated by donor support over its three phases of programme implementation. However, since 2010 many donors started adjusting their allocations globally to encourage transition away from reliance on external resources, especially countries where the national economy could potentially support a greater share of HIV funding. DFID, USAID, Gates Foundation and Global Fund started strategizing using this approach.

The sum total of all sources of funding to finance various components of the programme refers to as the resource envelope. In India the NACP programme had following components of resource envelope:

Direct Budgetary Support (DBS): The Government's financial allocations to the Central plan for financing requirements of NACP. The Planning Commission/Niti Ayog aggregates and puts forward the demand by various administrative Ministries in a consolidated form to the Finance Ministry for the budgetary support required from the Government. This demand is vetted and then approved by the Finance Ministry. In the context of HIV/AIDS, budgetary support for NACP also includes funds allocated under NRHM for meeting expenditures for Establishment, Blood Safety, Condom Promotion and STD.

External Aid Component (EAC): This includes funds received from GFATM grants (various rounds), pooled funds comprising from the World Bank, DFID, USAID, Bilateral and UNDP. These funds are routed through the government treasury system. This component of resource envelope is pool fund that provides funds to GOI with the objective of facilitating faster disbursement. 

Extra-budgetary Support (EBS): This refers to financial assistance from various Development Partners and such as World Bank, DFID, USAID, GFATM, Gates Foundation grants to NGO. EBS funds are directly provided by donor agencies to various implementing agencies to support technical assistance and some components of the programme.

India started developing implementation plan for NCAP IV phase in 2011 and embarked on strategic plan for better integration of services and various components expected to bring in economies of scale and state level share of funding. Also around that time the fiscal position of the government had considerably improved with real GDP growth touching 10 per cent.  The government had also come with a promise to increase allocations to the health sector. Government’s resolve to increase allocations to health sector, declining prices of ARV medications and reducing the burden, high prevention focus of earlier phases leading to lesser burden, and past success stories and policy level interventions from government and judiciary creating higher ownership paved the way for increasing domestic budgetary support to the programme.

The government budgetary support increased from 9 percent during NACP II to 75 percent of total resources during NACP IV as can be seen from the following graph. The EAC component decreased from high of 91 percent to 24 percent of total budget during NAVP IV.

Government Budgetary Support NACP in India (%)  

Our paper entitled "Donor Funding to Domestic Budgetary Support Transition of National AIDS Control Programme (NACP) in India" coauthored with Dr K Sudhakar discusses the implications of this decision in terms of whether the budget promises were held and whether the integration challenge delivered the results. The paper discusses the way forward and suggests higher ownership of the programme should be instituted at the state level, particularly after financial devolution and speeding up the pace of integration to ensure it becoming a part of general health system.

Bhat, Ramesh and Sudhakar, K, Donor Funding to Domestic Budgetary Support
Transition of National AIDS Control Programme (NACP) in India (February 26, 2017). Indian Institute of Management Udaipur Research Paper Series No. 2012-2171274. Available at SSRN: https://ssrn.com/abstract=2924228