Public Health being a state subject, the primary responsibility of ensuring availability of healthcare services in the primary health centres/district hospitals is that of the respective State/UT governments. Under the National Health Mission (NHM), support is provided to the States/UTs for strengthening their healthcare delivery system including for health human resource on contractual basis and drugs to facilitate States/UTs to provide accessible, affordable and quality healthcare services to all those who access public health facilities, based on the requirement posed by the States/UTs in their Programme Implementation Plans. The Government has developed and released Indian Public Health Standards (IPHS) for PHCs, CHCs and District Hospitals so that all facilities provide certain essential services for that level.

The NHM funds can be used to strengthen facilities to IPHS standards. An incentive of upto 5% additional funding under the NHM is provided to those states that introduce free generic/essential drugs. The Government has also developed and issued operational guidelines for Free Drugs Service Initiative to provide guidance to the States.