The impact of macroeconomic policies on the growth of public health expenditure: An empirical assessment from the Indian states

Deepak Kumar Behera,Umakant Dash,Juan Sapena

doi:10.1080/23322039.2018.1435443

Abstract

The impact assessment of macroeconomic policies on public health expenditure is very relevant in Indian economy because of tax reform, fiscal consolidation, and expenditure policy reform. These hav...

Highlights

The health system1 finance is the most important challenge for achieving Universal Health coverage2 (UHC) in an emerging country like India (Duran, Kutzin, & Menabde, 2014)
Trends of public health expenditure and macroeconomic policies of Indian states Figure 1 analyzes the trends of PHE since 1990s vis-à-vis changing trends of macroeconomic factors such as economic growth, domestic debt, fiscal balance, central government transfer, and revenue growth of Indian states
Similar downward trends have been seen in the growth of revenue and central government transfer from 1990 to 1995, which are recognized as the potential source of fiscal space for health

Summary

Introduction

The health system finance is the most important challenge for achieving Universal Health coverage (UHC) in an emerging country like India (Duran, Kutzin, & Menabde, 2014). There is a continuous increase of fiscal gap (current expenditure minus current revenue) among the states of India, which has led to the high fiscal deficit and a large debt stock These create fiscal stress and reduce the state’s fiscal capacity to release finance for health sector (Prasad & Kishore, 2007). Using the period 1990 to 2014, the study examines the dynamic relationships between PHE and macroeconomic factors (economic growth, domestic revenue, domestic debt, fiscal balance, and central government transfer) of 15 major states of India. The result suggests policy implication for the generation of fiscal space toward health care across Indian states by improving revenue collection, enhancing tax base, and the judicious spending of central government transfer devolution in order to achieve universal health care finance.

Conclusion and policy implications

Data and methods

Findings

Conclusion and policy implication