Rural Healthcare Spending at the Household Level: Evidence from India’s Major States

During the period of economic reforms, the Indian economy witnessed an enormous growth with a highly skewed distribution of consumer healthcare expenses. Reduction in public expenditure on the social sector during the period of economic reforms has also adversely affected the rural poor and vulnerable sections of society. This paper attempts to examine the pattern of rural healthcare expenses at the household level and to examine the extent of inequality that prevails in the distribution of healthcare spending across different groups of people in India. Hospitalization and out-patient expenditures are analyzed separately. Gini-coefficient and Palma ratio have been used to measure the degree of inequality. Factors determining the rural healthcare expenses have been identified and examined by using econometric techniques. Consumer Expenditure Survey (CES) data for the 61st round (2004-05) and 68th round (2011-12) collected by the National Sample Survey Organization (NSSO) of India have been used. Education, rural non-farm employment, female participation in the workforce and availability of health infrastructure appear highly significant in determining rural consumer healthcare spending in Indian states. The outcome of this study highlights the need for an increase in fiscal expenditure for the improvement of public sector healthcare facilities, including manpower so that poor people can attain quality healthcare without suffering any financial distress.