CAG flags serious lapses in Ex-servicemen Contributory Health Scheme

CAG flags serious lapses in Ex-servicemen Contributory Health Scheme, calls for reforms

The audit found inadequate geographical coverage of empanelled Health Care Organisations, forcing beneficiaries to travel long distances for referral treatment

By Dalip Singh

Updated - December 19, 2025 at 11:15 AM.

Shortages of medicines, ageing ambulances and underutilisation of capital funds were also highlighted.

New Delhi, The Comptroller and Auditor General (CAG) on Thursday tabled a performance audit report in Parliament highlighting gaps in the implementation of the Ex-servicemen Contributory Health Scheme (ECHS), including inadequate healthcare infrastructure, manpower shortages, delays in payments and uneven availability of empanelled hospitals.

C&AG’s Audit Report No. 27 of 2025, Union Government (Defence Services–Army), covering the period from 2018-19 to 2022-23, was presented in both the Lok Sabha and the Rajya Sabha. The audit, as per a release issued after presenting the report in parliament on Thursday, examined the functioning of key stakeholders involved in the scheme, including the Department of Ex-servicemen Welfare, Adjutant General’s Branch, Central Organisation ECHS, Regional Centres, Polyclinics, Service Hospitals, Station Headquarters and Principal Controllers of Defence Accounts.

The ECHS aims to provide comprehensive, cashless and capless healthcare to ex-servicemen and their dependents through a nationwide network of polyclinics for outpatient services and service, government and empanelled private hospitals for specialised and inpatient treatment.

Access remains limited

The audit found inadequate geographical coverage of empanelled Health Care Organisations (HCOs), forcing beneficiaries to travel long distances for referral treatment. It also flagged the skewed distribution of empanelled hospitals within certain Regional Centres. The Ministry of Defence informed the auditor that corrective measures had been initiated by simplifying the empanelment process and expanding the HCO network.

Staffing gaps persist

The report noted that, despite an increase in the number of ex-servicemen, the categorisation of polyclinics—which determines their size and manpower—has not been revised since the scheme’s inception in 2003. Manpower authorisation at the Central Organisation, Regional Centres and polyclinics has also remained unchanged, aggravating shortages. The Ministry said a sanction was accorded in November 2024 to add 1,357 personnel to 23 new and 50 upgraded polyclinics.

Aging ambulances flagged

The CAG further noted a shortage of medicines for polyclinics, equipment deficiencies, the continued use of old ambulances, and operational issues with mobile medical units. The Ministry said procurement of medicines would now be done for six months instead of three, and proposals had been initiated to replace 31 ambulances categorised as Beyond Economic Repair or downgraded. Persistent underutilisation of capital budgets was also flagged, despite land being available at several locations for the construction of polyclinic buildings. Acceptance in Principle has been accorded for the construction of permanent buildings for 48 polyclinics, the Ministry said.

Funding gaps flagged

Delays in payments to empanelled hospitals and reimbursements to beneficiaries due to shortages under Medical Treatment Related Expenditure (MTRE) allocations were another major concern. These delays resulted in recurring carried-forward liabilities, empanelled hospitals opting out of the scheme, and financial hardship for retired personnel. The Ministry said it had taken up the matter for a one-time allocation of sufficient funds to reduce or eliminate such liabilities.

The audit also identified scope for improvement in the verification of emergency admission reports, the installation of kiosks at empanelled hospitals, and the functioning of Station ECHS Vigilance Teams.

Action plan outlined

Based on its findings, the CAG made several recommendations, including securing adequate MTRE funding as a one-time measure, expediting infrastructure creation at polyclinics, hiring additional contractual manpower, reviewing remuneration for contractual staff and medical specialists, revising polyclinic categorisation, fast-tracking construction of approved polyclinics, expanding empanelment of hospitals, replacing outdated ambulances and ensuring vigilance teams are functional across all station headquarters.

Published on December 19, 2025