An Empirical Study on Public Health Spending in India
Authors
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Sangita Agrawal
Senior Assistant Professor (Corresponding Author), Department of Business Economics, The Maharaja Sayajirao University, Sayajigunj, Vadodara - 390 002, Gujarat
https://orcid.org/0009-0005-9976-6317
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Vrushangi Gandhi
Research Scholar, Temporary Assistant Professor, Department of Business Economics, The Maharaja Sayajirao University, Sayajigunj, Vadodara - 390 002, Gujarat
https://orcid.org/0009-0007-4326-3037
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Aditi Dave
Research Scholar, Assistant Professor, Faculty of Law, Parul University, Limda, Waghodia, Vadodara - 391 760, Gujarat
https://orcid.org/0009-0001-3794-5089
DOI:
https://doi.org/10.17010/aijer/2026/v15i2/175090Keywords:
public health spending, state income, gross domestic product, life expectancy, economic growth.JEL Classification Codes :H51, I12, I15
Publishing Chronology: Paper Submission Date : May 5, 2026 ; Paper sent back for Revision : May 25, 2026 ; Paper Acceptance Date : May 30, 2026.
Abstract
Purpose : This study examined trends, inter-state differences, and elasticity of public health spending (PHS) at the India and selected state levels, between 2012 and 2020. Second, it empirically assessed the two-stage transmission effect of economic growth on resource allocation to public health and on health outcomes.
Design/Methodology/Approach : Secondary data from official national repositories were used in a quantitative empirical design. The methodology included trend analysis, per capita expenditure analysis, total growth rate analysis, ranking, elasticity analysis, and simple linear regression to explore the connection between economic output and PHS, and between PHS and life expectancy. HAC robust standard errors were estimated as a robustness check. Andhra Pradesh and Telangana were treated as one state to maintain comparability during the study period.
Findings : PHS increased over time, but there was interstate variation. The per capita analysis indicated that an increase in aggregate spending was not necessarily correlated with an increase in per capita spending. Elasticity estimates indicated that most states responded positively to income growth. The regression estimates and HAC robustness checks confirmed a statistically significant positive association between economic output and PHS and between PHS and life expectancy.
Practical Implications : The study pointed out that population size and differences between states should be taken into account, besides aggregate expenditure, when health financing decisions are made.
Originality/Value : The research used expenditure trends, demographic adjustments, elasticity, interstate comparisons, and empirical analysis to link economic growth and longevity within a single framework.
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References
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