Do the poor benefit from public spending on healthcare in India?

Debashis Acharya, Girija Vaidyanathan, VR Muraleedharan, DS Deenadayalan, Umakant Dash

This study addresses a set of related questions in public policy: How well are we spending the public resources on health care? Are the benefits of public spending reaching the poor? Is public spending on health care becoming more or less pro-poor over time? What factors might be contributing to the pro-poor or pro-rich nature of public spending and their distributions? The present study is motivated by these questions and attempts to provide evidence from the states of Tamil Nadu and Orissa over the period 1995 to 2004. The study emplys the data sets of the National Sample Surveys (NSS) carried out in 1995-1996 and 2004 and a modified version of the methodology of BIA and Decomposition Analysis (DA) to answer the above research questions. Overall, the study has provided many insights into the pattern of utilisation of public facilities (for in-patient, out-patient and maternity services) in rural and urban areas of Tamil Nadu and Orissa. The two broad definitive findings of this study are: 

  • Public spending on healthcare in Tamil Nadu has become much more pro-poor by 2004-­05 than it was a decade earlier (1995-­96).  This is true of all three services considered in this study.     
  • Public spending on health care in Orissa has become more pro-­poor for out-­patient services, but continues to be pro-­rich (although to a much lesser extent) for in-­patient and maternity services over the same period.    
Financing India