Analysis: Financing Nutrition in India- Considering the Cost Implications

25 May 2020
Read Highlights from Event on 'Financing Nutrition in India: Cost Implications of the Nutrition Policy Landscape' co-hosted by the International Food Policy Research Institute (IFPRI) and the Accountability Initiative (AI)

The nutrition financing community in India is engaged in efforts to strengthen actions for adequate financing for nutrition. On 28 April 2020, a group of 29 participants gathered at a virtual event to discuss the latest findings of a study on how much it would have cost India to finance a set of direct nutrition interventions (DNIs) in 2019 at full scale. The event titled “Financing Nutrition in India: Cost Implications of the Nutrition Policy Landscape” was co-hosted by the International Food Policy Research Institute (IFPRI) and the Accountability Initiative (AI) at the Centre for Policy Research (CPR).

Why should we conduct costing exercises for nutrition interventions?

Despite some improvements over the last decade, outcomes of malnutrition such as stunting, anaemia, wasting, and low birth weight remain high in India (Menon et al. 2017). To address malnutrition and associated risks, the Indian government has brought together a range of nutrition efforts under the umbrella National Nutrition Mission, POSHAN Abhiyaan.  The nutrition interventions included in the overarching POSHAN Abhiyaan framework include those implemented by the Ministry of Women and Child Development (MWCD) and several interventions implemented by the Ministry of Health and Family Welfare (MoHFW). Yet, coverage of these interventions is variable across states (IFPRI Data Notes), and the exclusion of some of the poorest and most marginalised groups remains a cause for concern (Chakrabarti et al. 2019).

An important step towards ensuring adequate coverage and quality of interventions is budgeting appropriately across all levels. To this end, costing is a crucial exercise that can help policymakers estimate future funding needs and allocate resources effectively. Furthermore, costing exercises help determine gaps in allocations. Unfortunately, to date, there is limited research estimating the cost of scaling up access to nutrition interventions. Part of the problem is due to India’s planning and budgeting systems which do not always allow for local-state-wise disaggregated unit costs. Moreover, costs of delivering key interventions vary across states due to differing state capacities, geography and terrain, and supply constraints. Reliable estimates of required coverage are also limited. 

In the virtual convening on 28 April, participants discussed the key findings of the new costing study conducted by AI, CPR researchers Avani Kapur, Manan Thakkar and Ritwik Shukla. Additionally, participating organisations shared their ongoing research related to nutrition financing to develop a consensus on gaps in knowledge and key questions that could feed into a collaborative research agenda. 

What will it cost? 

Presenting the key results from the study, Ritwik Shukla said, “The overall objective of our study was to estimate the potential costs to deliver a set of DNIs at scale (i.e. 100 per cent coverage) at the union and state levels, and across departments and ministries, in 2019.” 

Building on the methodology used by Menon et al. (2016), the research found that India should have invested a minimum of ₹38,571 crore in 2019 to fully finance these 15 DNIs, at scale. This exercise excluded costs for 3-6 year old children. The highest costs were for food supplements (₹20,796 crore), followed by maternity benefits (₹9,260 crore), and health interventions (₹6,123 crore), such as the provision of insecticide treated bed nets, immunisation, and the treatment of malnourished children at nutrition rehabilitation centres. Counselling (₹1,373 crore) and the provision of micronutrient and deworming interventions (₹1,019 crore) costed the least. 

Costs were also presented by population groups, states, and ministries. The analysis suggested that the highest costs were for children aged 6-36 months, driven primarily by food supplement costs. Among states, costs were highest for the most populous states, such as Uttar Pradesh, Bihar, and Maharashtra. 

A comparison of required costs for delivering DNIs at scale with the actual allocations in 2019, suggested that the required budgets remained lower than the actual budgeted amount. In 2019-20, assuming that states contributed their share of funds (50 percent of the total allocations) for supplementary nutrition under ICDS, the total allocation stood at ₹17,654 crore. This was lower than the costs estimated, even excluding the ₹ 20,136 crores for 3-6-year olds, by over ₹2,000 crore. 

The presentation concluded with some of the methodological challenges in estimating costs particularly for interventions such as counselling. It thus concluded that it is essential for the nutrition community in India to examine the available results on costing for nutrition interventions, and to help expand its scope by contributing to obtaining better unit cost data, improving the methodology, and making the study results useful for the policy-makers.  

Identifying knowledge gaps and developing a collaborative research agenda

Following the presentation, Purnima Menon from IFPRI led a discussion on concurrent research by various participating organisations. Giving an overview of some of the big questions for nutrition financing, Saachi Bhalla from the Bill and Melinda Gates Foundation (BMGF) highlighted the importance of mapping research on public financing and looking specifically at issues of costing, fund requirements, resource availability, and utilisation and efficiency from a return-on-investment perspective. 

Vani Sethi from UNICEF shared her experience of working on financing for Anemia Mukt Bharat (AMB). They tracked AMB budgets for 14 states, and looked at allocations and bottlenecks to allocative efficiency. “Through our work on AMB, while we directly supported policy-makers, we also feel it is important to build the capacity of organisations supporting planning exercises at state and district levels through training,” she informed. 

Applauding the systems lens approach in the way data on AMB budgets had been used, Alok Ranjan from BMGF said that enabling the system to learn to make corrections is crucial for state planners. He encouraged researchers to collectively work towards initiating such feedback loops across components.

The research found that India should have invested a minimum of ₹38,571 crore in 2019 to fully finance these 15 DNIs, at scale.

Information on ongoing research and engagement with nutrition financing at the state and district levels were shared by Happy Pant from the Centre for Budget and Governance Accountability (CBGA) and Saumya Srivastava from IPE Global. 

There was consensus around the fact that researchers need to make their work on nutrition financing available and useful for the government in ways that it can contribute to the development of Annual Programme Implementation Plan. Purnima Menon noted that understanding processes related to nutrition financing is just as important as analysing cost estimates and gaps. 

The way forward

Reflecting on the discussions, Avani Kapur from AI, CPR acknowledged the need for documenting studies by various organisations on nutrition financing. The participants agreed to collate information on their financing studies, organize similar sharing and learning events and present their findings to policymakers in a pragmatic way. 

Moving forward, a policy note on costing will soon be published online by AI and IFPRI, and discussions around nutrition financing will continue. Lastly, in the context of the current COVID-19 pandemic and economic crisis, it is critical that the fiscal space for nutrition, with active attention to equity, is not lost. This is something that the nutrition financing community will continue to work towards.

Please find here the presentation that was shared during the virtual event.

This blog was jointly developed by Accountability Initiative and POSHAN teams and is cross-posted on both the websites.

The views shared belong to individual faculty and researchers and do not represent an institutional stance on the issue.