India’s Public Healthcare System in Different Dimensions: An Econometric Review across Major Indian States from 1981-2015

Abstract

The objective of this paper is to take a closer look at the liaison between the two focus variables viz. growth and public healthcare expenditure, and the associated implications for public health infrastructure development and related health inequality. We make use of panel cointegration and causality in a Vector Error Correction Mechanism (VECM) framework using panel data from 1981-2015. Though reducing health inequalities is an important policy agenda, till now research on health inequality has been mostly concentrating on the developed countries and there is a very scant literature in the Indian context and herein lies our contribution to the existing literature. India, being a developing country, now has comprehensive datasets for some socio-economic health indicators like, — Life Expectancy Rates, Infant Mortality Rates, Total Fertility Rates, etc. and their related disparities. Hence, research on health inequalities could be instrumental in drawing attention to the health of socio-economically vulnerable groups. In this endeavour, we have tried to examine the inequality in two crucial health related variables, ‘life expectancy at birth’ and ‘infant mortality rates’ for 23 major states in India. To do this, we have used the tool of the Concentration Index (CI), a frequently used indicator of the socio-economic inequality of health. To give more tangible policy directions on the position of public healthcare infrastructure vis-à-vis health inequalities, we have used Euclidean distance function approach to construct a public health infrastructure index (PHII) across 23 major states in India for two terminal time points i.e. 2005-06 and 2014-15. This index will be serving as a measure for evaluating the variations in the inter-state performance in public healthcare infrastructure and related implications thereof.