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Devolution of financial powers, Punjab
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Subject Area="Management structures and systems." Objective="Effective decentralised management of funds."
Details for Reform Option "Devolution of financial powers, Punjab"

Background: As traditional administrative procedures regarding release, utilisation and control of funds can be time consuming and inefficient, services at health facilities are sometimes hampered due to delays in the repair and maintenance of the infrastructure or equipment. Actions: To overcome the routine obstacles involved in these administrative procedures, functional autonomy is decentralised to the hospital in charge by allocation of adequate financial powers to staff. (i) For local repair of equipment and other related expenses:Senior Medical Officer (SMO) is authorised to spend: - Up to INR 2000 without a quotation from approved sources. From INR 2000 to INR 5000 with a single quotation by approved source/ manufacturer/public sector undertakings. From INR 5000 to INR 10,000 with minimum three quotations called by a committee comprising of Deputy Medical Commissioner(DMC), SMO and two specialists. Above INR 10,000 with sanction by headquarters. (ii) For necessary single sanction – Single sanction is the spending power at a time for emergency purposes. It varies according to the officer in charge as well as to user charge collection per month. User charge- Less than INR 50,000 More than 50,000 SMO- Up to INR 5000 Up to INR 10,000 DMC Up to INR 10,000 Up to INR 15,000 Civil Surgeon Up to INR15,000 Up to INR25,000 (iii) For stationery: spending power varies according to the bed strength of the hospital as follows-. 30 bedded hospital- Upto INR 500 per month. 50 bedded hospital Upto INR 750 per month. 100 bedded hospital Upto INR 1000 per month.

Cost Only issue of the government order is needed to implement the power as financial autonomy is based on the revenue collected from the user fees.
Place One hundred and fifty four hospitals in Punjab, including Community Health Centres, Sub divisional hospitals and District hospitals.
Time Frame Approximate time from planning to implement the reform is one year.

Administrative flexibility: Decentralised administrative power helps in making speedy decisions at the lower level. Efficiency: Resources are efficiently managed as per requirements of the health facilities.


None perceived.


Government Orders.

Who needs to be consulted

State government.



Sustainable,but political will is necessary to make the process successfully sustainable.

Chances of Replication

Replicable, devolution of financial and administrative powers has been already proven successful in Haryana.


Devolution of administrative powers helps the corporation to revamp the healthcare facilities structurally as well as functionally.


Submitted By

Dr. Anuradha Davey, Research Consultant, IRMS, September, 2005.

Status Active
Reference Files
PHSCMFA017850-74 dated 23.10.2001.doc GO:PHSC/MFA/01/7850-74 dated 23.10.2001.
PHSCGMFA044855-93 dated 02.09.2004.doc GO: PHSC/GMFA/04/4855-93 dated 02.09.2004.
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