This policy paper attempts to examine the resource transfer processes and utilization of funds for health at the district level in two select districts of Odisha. The findings provide insights to improve the fund flows at the district level which is the main implementation unit for health services.

Budget preparation is an important health sector concern. More funds for the health sector will not achieve universal health coverage (UHC) unless well-functioning financial management systems are in place and the funds are utilized efficiently. The way the budgets are formulated and budget allocations are made has a direct bearing on the performance of the health sector.

Understanding the budget formulation process, prioritization, the level and nature of public expenditure, allocation, and utilization patterns are crucial to increasing the efficiency of public spending. Though prioritization of expenditure is a political process rather than purely a technical exercise, understanding of these issues will help influence the process to enhance health system performance. In India, the annual budget for the union government is prepared by the finance ministry with support from other ministries and passes through –the preparation phase, parliamentary approval, execution, and auditing.