Relation Between Per Capita Public Expenditure on Health and Income in India at Sub-National Level

Abstract

Health is considered as both a source of human welfare and a detriment to overall economic growth. The relationship between public health expenditure and economic growth is an important subject of analysis that has been in debate for years. The major concern is whether income of a nation plays a significant role in the changes happening in government health spending. In order to answer this particular question, the present study investigates the relationships between public health expenditure and income in selected 23 Indian states based on the availability of data. Variables used for the study were per capita public health expenditure, per capita state gross domestic product, per capita state’s own revenue and infant mortality rate for a period of 30 years from 1990 to 2020. For the purpose of analysis, the states were divided into economically less developed and economically developed based on the revenue earned by the selected Indian states. The analysis begins with summary statistics and pair-wise correlation followed by ordinary least squares regression. The findings of the study suggest that there was a significant positive impact of per capita gross state domestic product, fiscal capacity on per capita public health expenditure, and a negative impact of infant mortality rate on per capita public health expenditure in all the 23 Indian states. And the impact of per capita state gross domestic product on per capita public health expenditure is higher in richer Indian states than poorer Indian states.