In a significant breakthrough, the long-standing dispute between Punjab’s Aam Aadmi Party (AAP)-led government and the Bharatiya Janata Party (BJP)-led central government over the branding of health and wellness clinics (HWCs) was finally resolved on Tuesday. This development led to the release of an initial instalment of ₹123 crore in National Health Mission (NHM) funds, crucial for Punjab’s healthcare infrastructure.

The disagreement stemmed from Punjab’s decision to rebrand these government-funded clinics as Aam Aadmi Clinics (AACs), displaying Chief Minister Bhagwant Mann’s photo. Objecting to this, the Centre withheld funds for over a year, impacting healthcare financing in the state. However, the funds were unlocked after Punjab agreed to rename these clinics as Ayushman Arogya Kendra and remove Mann’s photo, a senior health department official confirmed.

The first instalment of ₹123 crore, part of a larger ₹765 crore NHM fund allocation due to Punjab for the 2024-25 financial year, was released on Tuesday evening, following Punjab’s adjustments in the clinic branding. According to officials, the Centre will now carry out its own branding on the HWCs, solidifying the compromise between the two administrations.

Union Health Minister Jagat Prakash Nadda played a key role in the resolution. His discussions with Punjab Health Minister Dr. Balbir Singh reportedly smoothed over the remaining differences. Initially, the Centre proposed renaming the clinics as Ayushman Arogya Mandir, which the Punjab government countered, preferring the term “Kendra” over “Mandir.” This linguistic adjustment was accepted by the central authorities, reflecting a collaborative spirit, sources close to the deliberations indicated.

Despite the Centre’s stance, Punjab will retain Chief Minister Mann’s photo in state-funded health facilities. This distinction allows Punjab to maintain some degree of localised branding while complying with the Centre’s guidelines for NHM-funded clinics.

This resolution comes after significant financial strain on Punjab. In February 2023, the Centre halted NHM funds, citing the state’s unilateral rebranding of HWCs as AACs. As a result, Punjab had to redirect more than ₹700 crore from its own budget to maintain healthcare operations over the past 18 months. A senior Punjab health official noted that the withheld amount included ₹621 crore, the Centre’s share under the agreed 60:40 funding arrangement with Punjab for NHM programs.

Since the launch of the AAC initiative in 2017, Punjab has established 881 Aam Aadmi Clinics to enhance access to primary healthcare, with around 600 of these originally falling under the Centre’s HWCs. The resumed funding will now support these facilities under their new branding as Ayushman Arogya Kendra, marking an important step forward for Punjab’s healthcare system and its partnership with the central government.