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Raising concerns over the reduction of allocation under the Budget Estimates (BE) for the Ayush Oushadhi Gunvatta Evam Utpadan Samvardhan Yojana (AOGUSY) under the Ministry of Ayush, the Parliamentary Panel on Health and Family Welfare recommended to the Ministry of Ayush to set up a monitoring and implementation mechanism to ensure better fund utilisation.
The Parliamentary Standing Committee on Health and Family Welfare, in its 174th report on Demands for Grants 2026-27 of the Ministry of Ayush, expressed serious concern that there has been substantial reduction of BE allocation to AOGUSY at the RE stage in last five years highlighting the issue of low utilization of funds as recurring phenomena.
It noted that the Ministry has not taken adequate corrective measures despite a precautionary observation of the Committee in its earlier report, and instead, attributed the shortfall to procedural and operational difficulties faced by the grantee institutions.
"The Committee believes that such procedural bottlenecks, inadequate implementation support and delays in procurement processes indicate systemic deficiencies that require stronger institutional oversight and facilitation by the Ministry," said the Panel headed by Member of Parliament Prof. Ram Gopal Yadav.
The budgetary allocation to AOGUSY has seen consistent reduction from the BE to Revised Estimate (RE) stage from 2022-23 to 2025-26, and further reduction in the actual expenditure except for the year 2022-23, according to the data reviewed by the Panel.
In 2022-23, the BE was Rs. 23.50 crore, which came down to Rs. 20 crore in the RE stage with a reduction of 14.89%, while the actual expenditure at the end of the fiscal year was Rs. 19.05 crore.
In 2023-24, the BE was Rs. 20 crore, which came down by 38.7% to Rs. 12.26 crore in RE stage and further reduced to Rs. 11.59 crore in actual expenditure. The BE was Rs. 25 crore, reduced 20% to Rs. 15 crore in RE stage, and actual expenditure of Rs. 13.92 crore in 2024-25.
In the year 2025-26, the BE was Rs. 27 crore, which was reduced 34.25% to Rs. 17.75 crore in RE stage, and the actual expenditure stood at Rs. 17.50 till January 31, 2026. The BE for the scheme during the fiscal year 2025-26 is Rs. 27 crore.
"The Committee, therefore, recommends that the Ministry of Ayush institute a robust monitoring and implementation mechanism for the AOGUSY scheme, including periodic review of fund utilisation, streamlined procurement procedures, and capacity-building support for grantee institutions to ensure timely execution of projects under the scheme," recommended the Panel.
"The Ministry must put in place a comprehensive financial planning framework to prevent repeated reduction of Budget Estimates at the Revised Estimates stage and to enhance the absorptive capacity of implementing agencies," it added.
The Panel also observed that there is a gap between financial outlays and corresponding physical or regulatory outcomes as only three out of the five funded pharmacies have progressed from infrastructure upgradation to the stage of WHO-GMP certification.
It opined that despite substantial financial allocation, delays in regulatory compliance may hinder the timely achievement of the scheme’s objective of ensuring international quality standardisation in Ayush drug manufacturing.
"In this regard, the Committee recommends that the Ministry should develop a technical mentorship mechanism including pre-audit inspections for institutions that remain at the “in-process” stage," it added.
It further recommended that the introduction of targeted capacity-building programmes for pharmacists, technicians, and other technical staff working in the pharmacies so as to ensure that human resource capabilities keep pace with the upgraded infrastructure and technological investments made under the scheme.
The scheme is aimed to regulate Ayurveda, Siddha, Unani, and Homoeopathy (ASU&H) medicines in India, utilising the framework provided by the Drugs & Cosmetics Act, 1940 and its associated rules. Its objectives include enhancing India's manufacturing capabilities and exports of traditional medicines, and infrastructural and technological upgradation and institutional activities in public and private sector for standardisation, quality manufacturing and analytical testing of Ayush drugs and materials.
It also aims to strengthen regulatory frameworks at Central and state level for effective quality control, safety monitoring and surveillance of misleading advertisements of Ayush drugs.
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