Ninety percent of the money supposedly being spent in the health sector never ever reaches the people it is meant for. Most of it is spent on the bureaucracy at the Ministry of Health and to please people in donor agencies.

More than Rs 5 billion is invested in the health sector every year by agencies like the Norwegian NORAD, Japanese JICA, German GTZ and American USAID. Almost 90 percent of that is spent on expensive cars, sophisticated equipment and travel expenses, paying foreign consultants, administrative costs and daily allowances.

Professor Ritu P Gadtola says almost 90 percent of the aid meant for health does not reach the people it is meant for, but as there is no transparency, we are unable to do a complete study of the problem. Public health expert Anandaballav Joshi says most of the health budget is spent on paying the salaries of over 37,000 employees at the health ministry and on seminars, workshops and publicity. Two years ago, a government committee recommend immediate downsizing, but nothing has come of it. The health ministry has more employees than any other ministry.

Most district hospitals are in a very bad state, the central support they receive barely lasts three months. There is no use even talking about the state of the health posts. The state provides them barely any support, while the number of people seeking their services is increasing daily. The health ministry has made no effort to reform this sector. A high-ranking health ministry official said only a third of the health budget should be spent on administrative costs, while the remaining two-thirds should be spent on the targeted people.
Donor agencies are also accused of not following these recommendations. Less than 10 percent of their total expenditure ever reaches the people it is meant for. They bring consultants from their own countries and pay them very high salaries, meaning most of the money goes back where it came from. The Norwegian Heart and Lung Association is said to have spent over Rs 10 million on just preparing human resources to battling tuberculosis. A foreign consultant could earn a basic salary of $4,500 per month, while a local consultant is available for about Rs 70,000. Besides, foreign consultants get other facilities as well. Nepal gets the most aid in the health sector, compared with other South Asian countries. Successive governments have said that they would provide health for all by 2000. That date has now been pushed to 2015.