Examining the effect of removing banknotes and implementing Goods and Services Tax on access to healthcare in India

Abstract

This paper explores the effect of the banknote ban and GST, which were implemented within a span of 8 months in 2016-2017, on self-reported illnesses and healthcare consumption in India. The findings show that the increasing trend of self-reported illness from 1995-96 to 2014, reversed in 2017-2018. The reduction in healthcare consumption between 2014 and 2017-2018 is primarily within the private care sector rather than public care, indicating economic duress induced by the banknote ban and GST as its cause. The reduction in self-reported illness and healthcare consumption is more prolonged among the occupationally vulnerable. The reduction in reporting of illnesses, healthcare consumption, and out-of-pocket expenditure on health continued even after one-and-half years of the banknote ban; this may also have been exacerbated later by the implementation of GST. Data indicate that the condition of public healthcare deteriorated between 2014 to 2018. As a result, even though the weaker sections’ access to private healthcare diminished, they could not turn to public healthcare either, resulting in a reduction in overall healthcare consumption. The findings of this paper call for a robust, functioning, affordable public healthcare system in India for greater crisis resilience.