Understanding the Pattern of Consumption Expenditure and Health Spending in India

Abstract

This paper examines the pattern of Monthly Per Capita Consumption Expenditure (MPCE) by socio-economic and demographic characteristics of households using unit data from 64th Round of National Sample Survey, India, 2007-2008. Household consumption expenditure is analysed with respect to food, non-food items, health and education. The results indicate that the share of health expenditure in India constitutes over five per cent of total consumption expenditure and it increases with age, economic status and educational level of the head of household. Medicine is the largest share of the total Out of Pocket (OoP) health expenditure. Around two-thirds of the households incurred catastrophic health expenditure. State differentials in OoP expenditure on health are large, possibly linking household expenditure to per capita income and share of public spending on health.