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Journal of Economic & Social Development, Vol. - XV, No. 1, 2019 ISSN 0973 - 886X

FINANCING HEALTH EXPENDITURE IN POST-REFORM INDIA: TREND, VARIABILITY AND IMPLICATIONSSachita Nanda Sa*

In spite of India’s impressive performance on economic front in the post 1990s after adoption of new economic policy, its ranking in human development index has been very abysmal. Development of health status of the people constitutes a major determinant of development of human capital. But this sector has been grossly ignored in the planning process since decades. Even after reforms also the trend remained more or less the same. Universal coverage of health care services along with providing quality care to large sections of people is the major areas where the country has failed miserably. Making services available is a necessary condition for health service utilization. Evidence suggests that supply-side barriers are as important as the demand side factors in deterring patients from obtaining treatment. This paper examines the interstate and intra-state variations in public health expenditure in 15 major states during the period 1991-92 to 2009-10. The analysis depicts a deceleration in health expenditure in the major poor states leading to low level of human development. Thus, it is apparent that economic reforms have largely ignored the health sector.

Keywords: India, Health expenditure, Economic Reforms, Trend growth, Relative Variability, JEL Classification: I10, I18, I19

INTRODUCTIONHealth is essential for the realization of basic human needs and to attain a status of better quality of life (WHO, 2001). To attain the same, health care has emerged as a basic concern in all nations, though the problems of the developing world are radically different. The major issue in most of the Developing and third world is how best to deliver basic health care to the majority, most of whom are poor, living in remote rural and inaccessible area (Mazumdar and Guruswamy, 2009). In fact, the commission on Macroeconomics and Health of the WHO (2001) argues that the provision of better health care is the key to improve health and economic growth in developing countries. Though there has been much public debate and academic interest in India on the quality and importance of human life, but the focus has largely been on the performance of the economy as a whole and not on the level of enhancement on the quality of human life. Since the last two decades, because of the initiation of economic reforms and consequent fiscal stringency which have led in several countries to a reduction in the levels of expenditure incurred by the government on health and education which had direct adverse impact on social Indicators (Stewart, 1992; Jayarajah et al, 1996). India entered into the path of economic reforms in July 1991. Despite of India’s impressive economic performance after the introduction of economic reforms in the 1990s, progress in advancing the health status of Indians has been slow and uneven (Baru et al, 2010). Since then there have been negative projections that the adverse repercussions of associated policies may undermine the low level of human development in the country. After the initiation of economic reforms the most effected sector was the public financing of social sector and most importantly Health and Education.

* Assistant Professor in Economics, P.G Dept of Social Science, Fakir Mohan University, Balasore, Email: [email protected]

66 Sachita Nanda Sa

There have been so many studies conducted on the public expenditure on social services, most of the studies like Guhan (1995) and Prabhu (1996) stated to a decline in government allocations to social services across Indian states whereas Tulasidhar (1993) found to a similar trend in health expenditure. In the same way Sarkar and Prabhu (2001) empirically studied the real per capita social service expenditures in the 15 states from 1974-75 to 1995-96 found that the declining trend in these expenditures started even before economic reforms began in 1991. Their study revealed that there is a deceleration in real per capita state government expenditure on social services in the majority of Indian states. As against a general picture of deceleration in overall social services expenditure, the situation with respect to health was worst as compared to education. Yuko Tsujita (2005) examined social sector expenditures in fifteen Indian states between 1980-81 and 1999-2000. He found that Economic reforms did not have a major negative impact on expenditures. It is clear that state revenue procurement was sluggish from the mid 1980s which was a major determinant of social service expenditures in each state. Again, there is absolutely a dearth of research when it comes to the variations in Health expenditure. In this paper we tried to bridge that gap by analyzing the interstate and intra-state variations in public health expenditure in case of major fifteen Indian states. The rest of the paper is arranged as follows. The next section depicts the importance of the public health expenditure. Section 3 deals with methodologies and data sources. The section four is devoted to the analysis of main characteristics of public health expenditure. The fifth section reveals the explanation and discussions on the results. The sixth section or the last section finally concludes with some policy implications.

Health Financing in the Public SectorFinancing is one of the most critical determinants of how well the health sector will perform. The nature and pattern of financing to a large extent determines the effectiveness of service delivery and at the same time it defines the boundary and capability of the system to achieve its objective. In 1978, the thirtieth world health assembly decided that the main social target of governments and the World Health Organization in the coming decades should be “attainment by all citizens of the world by the year 2000 of a level of health that will permit them to lead a socially and economically productive life. In 1978, with a view to support the above stated goal, the international conference on primary health care which took place at Alma Ata adopted the declaration that primary health care was the key to obtain the target of “Health for all” by the year 2000. The above stated declaration has led most of the governments including developed and less developed countries to give much more priority to their health care system through higher allocation and better utilization of resources in order to improve the quality of health care services. India too has been attempting towards this end. To achieve the above stated goal for “health for all” WHO recommended an outlay of 6 percent of the GDP for India (Gill and Kavadi, 1999). In a developing country like India the public role in providing and financing health services assumes greater importance from the perspective of social welfare as well as ensuring equity (Guruswamy et al. 2008). The 1983 National Health Policy (NHP) was committed in providing health services to all by 2000. In 1983 health care expenditures varied greatly among the states and union territories. Although government health care spending progressively grew throughout the 1980s, such spending as a percentage of the Gross National Product (GNP) remained fairly constant. In the meantime, health care spending as a share of total government spending decreased. In 2007, according to WHO’s World Health Statistics, India ranked 184 among 191 countries in terms of public expenditure on health as a percent of GDP. During the same period, private-sector spending on health care was about 1.5 times of government spending.

67Journal of Economic & Social Development

Table-1: Pattern of Central Allocation (Total for the Country and Union MOHFW)

Period Total Plan Investment Outlay (All

Heads of Devp.) of country

Health Sector Natonal Rural Health Mission (NRHM)

Natonal Aids

Control Organi-zation

(NACO)

Health Research

Total % Outlay (Rs. in crores)Health Family

WelfareAyush 1

1 2 3 4 5 6 7 8 9 10

First Plan (1951-56)#

1960.0 65.2 (3.30)

0.1 (0.10)

65.3 3.4

Second Plan (1956-61)#

4672.0 140.8 (3.00)

5.0 (0.10)

145.8 3.1

Third Plan (1961-66)#

8576.5 225.9 (2.60)

24.9 (0.30)

250.8 2.9

Annual Plan (1966-69)#

6625.4 140.2 (2.10)

70.4 (1.10)

210.6 3.2

Fourth Plan (1969-74)#

15778.8 335.5 (2.10)

278 (1.80)

613.5 3.9

Fifth Plan (1974-79)#

39426.2 760.8 (1.90)

491.8 (1.20)

1252.6 3.1


12176.5 223.1 (1.80)

118.5 (1.00)

341.6 2.8

Sixth Plan (1980-85)#

109291.7 2025.2 (1.80)

1387 (1.3)

3412.2 3.1

Seventh Plan

(1985-90) #

218729.6 3688.6 (1.70)

3120.8 (1.40)

6809.4 3.1


61518.1 960.9 (1.60)

784.9 (1.30)

1745.8 2.9


65855.8 1042.2 (1.60)

856.6 (1.30)

1898.8 2.9

Eight Plan (1992-97)^

434100.0 7494.2 (1.70)

6500 (1.50)

108 (0.02)

14102.2 3.2

Ninth Plan (1997-02)^

859200.0 19818.4 (2.31)

15120.2 (1.76)

266.35 (0.03)

35204.95 4.09

Tenth Plan (2002-07)^

1484131.3 31020.3 (2.09)

27125.0 (1.83)

775 (0.05)

58920.3 3.97

Eleventh Plan

(2007-12)^

2156571.0 136147.0 (6.31)

$3988.0 (0.18)

140135.0 6.50

Annual Plan (2012-13)^

27127 990.00 20542.00 1700.00 660.00 30477.00

# (Actuals) ^ (Outlays) Sources: Health Information of India, 2011, CBHI, MOHFW, GoI

68 Sachita Nanda Sa

Recently India has entered into a high growth rate trajectory of 9 per cent. This high rate of growth, however, is not accompanied by a high level of social development. For example, public expenditure on health services as a percentage of Gross Domestic Product (GDP) in India is less than 1 per cent likely to be one of the lowest across the globe (Rao et al. 2005). Recently Dr. Kurian stated that the health care system in India pre–dominantly is catered to by the private sector and a minuscule contribution through external flows. Expenditure in the private sector contributes to 78.05% of total health expenditure, public sector accounts for 19.67% and external flows 2.28%. In totality, health expenditure formed 4.25% of Gross Domestic Product (GDP)1. It could be seen from various plan documents that the expenditure on health sector has declined during the post-independence period. The outlay has decreased from 3.3% in the first plan (1950-56) to 3% in the second plan, 2.6% in the third plan (1961-66), 2.1% in the fourth plan (1969-74), 1.9% in the fifth plan (1974-79) ,1.8% in the sixth Plan (1980-85) and 1.7 % in the seventh plan (1985-90) and what is more, public spending on health as a percent of GDP in India has stagnated in the past two decades, from 1990–91 to 2009–10, varying from 0.9 to 1.2 percent of GDP2.

Public expenditure on health as percent of government expenditure has been declining over the years. The total expenditure on health by the Centre, states and Union territories was Rs. 65.2 crore which was 3.33 percent of the total plan expenditure during the first five-year plan. Though the absolute figure went on increasing and swelled up to Rs 31020.3 in the tenth plan period in percentage terms it has decreased to 2.09 percent. On the other hand, expenditure on Family Welfare has been increasing at a slow and steady rate from first five-year plan to tenth five-year plan. And it was surprisingly high in the latest eleventh five-year plan which is around 6.3 percent as compared to 1.83 percent in the tenth plan period (Table-1).

Now, the proportion of health expenditure is below the average of low income countries and even sub-Saharan Africa (Audibert and Mathonnat, 2012). On the other hand private expenditure has grown from strength to strength because there is a vast demand which must be met. The government has failed to meet this demand but the private sector has served it, whatever the manner and quality.

The Table 2 clearly depicts the health status outcomes in case of India and major Indian states. It is evident that some states are well-off and performing better than the national average of health outcomes (South-Indian states, Punjab, Maharashtra, West Bengal etc.) and some states are performing very much worst (Uttar Pradesh, Orissa, Madhya Pradesh, Bihar, Rajasthan, Assam etc.) as compared to other Indian states. Like the health outcomes, in case of population growth, these under-developed states show higher exponential growth of population as compared to the developed states.

From the above table it is known that achievement in health indicators have been far less promising than expected in terms of current health status. If we look into the Mortality, Fertility and Life expectancy Indicators, it becomes clear that the IMR of under 40 per 1000 live births is seen only six out of fifteen major states that were under studied and maternal mortality remains high and continues to be high except Kerala and Tamil Nadu where it is below 100. And only in five states the fertility rate is below 2 percent. In case of life expectancy the performance of the major big states like Madhya Pradesh, Uttar Pradesh, Rajasthan, Orissa, Bihar and Assam are still below the national average.

69Journal of Economic & Social DevelopmentTa

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70 Sachita Nanda Sa

DATA AND METHODOLOGYThe data on government expenditure on health used in this exercise were compiled from Reserve Bank of India’s annual report on State Government Finances published in the Reserve Bank of India Bulletin. The data pertain to both revenue and capital expenditure, as they constitute the total expenditure on the specified sectors. State specific deflators were calculated from the series on State Domestic Product at 1980-81, 1992-93, 1999-00 and 2004-05 prices obtained from the Central Statistical Organization. The study has taken the data from 1991-92 to 2009-10 in order to examine the growth and instability of public health expenditure. Annual population figures were compiled from various reports of Selected Socio-Economic Statistics India 2006 & 2011, Central Statistical Organization, Government of India. The choice of study period is guided by the data availability for all the study variables at the time of analysis. Basically the study has taken the time series data from 1991-92 to 2009-10 for GSDP, Health Expenditure and Population. In order to avoid the price changes, the public health expenditure have been considered at constant prices with reference to 2004-05 as the base year. By using GDP deflator4 method, expenditure on current prices has been converted to constant prices. In case of states, we have used their respective Gross State Domestic product deflators5. Using data on population and state specific SDP deflators, real per capita expenditure was computed for Health Expenditure. In order to analyze the above issue of public health expenditure, the present study disaggregated the public health expenditure into three components i.e., (1) Medical and public health (2) water supply and sanitation (3) family welfare. The details component wise as well as aggregated trends of public health expenditure have been examined at both revenue and capital expenditure heads of account. Revenue expenditure mostly comprises recurrent expenditure on salaries, supply of equipment and drugs, public health programmes, medical education and training, and general operating expenses. Capital expenditure involves non-recurrent expenditure on physical assets and infrastructure, and one-time capital investment in disease control and public health programmes. Further the revenue and capital heads include both plan and non-plan items of expenditure. Plan expenditure includes expenditure incurred on different programs and scheme outline in the five year plans while non-plan expenditure includes all government expenditure on salaries, interest payment, office expenses and other day to day expenditure of the government. The analysis was confined to 15 major Indian states that accounted for 85.5 percent of area and 90 percent of population Sarkar and Prabhu (2001) and Bhat and Jain (2004).

Main Characteristics of Public Health Expenditure The mean, Standard Deviation and coefficient of variation (CV) of total health expenditure as well as Revenue and Capital expenditure on health for the years 1991-92 to 2009-10 are presented in Table 3, 4, 5 and 6 respectively. It may be observed from the table that intra- states variation for each state were lower than inter-state variations pointing to the fact that year to year variations in government expenditure within a state seemed to be relatively stable, though the magnitude of variations across states was relatively high (Table 4). The states also varied a great deal with respect to social sector attainments (Table 2). The low income states of Bihar, Uttar Pradesh, Orissa and Madhya Pradesh that had particularly low levels of social indicators also reported low levels of per capita expenditure on Health care services. But the performance of Rajasthan although impressive in case of per capita health expenditure, the social sector attainments are very low and quite similar with the above underdeveloped states. The average per capita health expenditure incurred by Kerala, Punjab, Tamil Nadu, Gujarat and Haryana during 1991-2009 were 320.73, 333.69, 322.29, 317.39 and 424.26, while Bihar and Uttar Pradesh incurred an expenditure of only 154.31 and 166.94


respectively (Table 3). Among all the major states, all the southern states have been performing well in the social sectors attainments as well as in per capital health expenditure. The low attainments states of Bihar and Uttar Pradesh recorded nearly half the levels reported in these states and even as Andhra Pradesh, Odisha and Madhya Pradesh, three other low attainment states. In Rajasthan and Haryana, the higher level of per capita health expenditure (i.e. 431.01 and 424.26) was mainly on account of higher expenditure on water supply and sanitation mainly from the capital account of health expenditure (Table 6). And among all the states Kerala has performed exceptionally better in all the social sector indicators.

Table 3: Intra-state Variations in Health Expenditure: 1991-2009

State Health Expenditure

Mean SD CV

Andhra Pradesh 271.57 79.89 29.42

Assam 249.92 78.90 31.57

Bihar 154.31 37.83 24.52

Gujarat 317.39 96.49 30.40

Haryana 424.26 140.69 33.16

Karnataka 306.77 91.65 29.88

Kerala 320.73 74.38 23.19

Madhya Pradesh 240.43 28.06 11.67

Maharashtra 275.29 53.39 19.40

Orissa 233.32 67.60 28.97

Punjab 333.69 70.39 21.09

Rajasthan 431.01 109.85 25.49

Tamil Nadu 322.29 72.96 22.64

Uttar Pradesh 166.94 50.91 30.50

West Bengal 218.68 59.50 27.21

India 275.76 69.41 25.17Sources: RBI Bulletin on State Government Finances and CSO, Govt. of India

The data indicate that as compared to initial levels, the real per capita expenditure have increased over time for all the states. However, the rate of increase varied from state to state. The variations in health expenditure were also high and more than the national average for the states like Haryana, Uttar Pradesh, Gujarat, Assam, Karnataka, Andhra Pradesh, Orissa and West Bengal respectively. On the other hand the variation was lowest in case of under developed State like Madhya Pradesh i.e. 11.67. However, the inter-state variation (CV) in case of health expenditure has increased and even more than the average of intra-state variation during 1991 to 2009, which shows significant differences in health expenditure incurred by different states (Table 4).

72 Sachita Nanda Sa

An inter-state analysis of the share of revenue and capital expenditure in total health expenditure indicated some interesting features (Table 5 and 6). It is seen that, Kerala recorded the highest proportion of revenue expenditure of total Health expenditure. Kerala was followed by Punjab, Haryana and Rajasthan. Like the total Health expenditure; in case of revenue expenditure also Bihar (129.43) and Uttar Pradesh (145.77) recorded lowest share in total revenue expenditure on Health care services. The inter-state variation in revenue expenditure was quite less than the variation in capital expenditure.

Table 4: Inter-State Variations in Health Expenditure

Year MEAN SD CV

1991 206.739 45.385 21.953

1992 214.676 50.644 23.591

1993 216.040 48.086 22.258

1994 231.543 67.342 29.084

1995 221.927 58.711 26.455

1996 232.129 68.650 29.574

1997 247.702 71.816 28.993

1998 278.296 87.833 31.561

1999 286.369 84.197 29.402

2000 294.626 89.645 30.427

2001 275.520 87.402 31.723

2002 276.329 90.127 32.616

2003 277.877 98.281 35.368

2004 290.708 105.018 36.125

2005 310.207 96.875 31.229

2006 323.028 105.745 32.736

2007 363.642 121.668 33.458

2008 414.079 133.090 32.141

2009 442.935 146.143 32.994

MEAN 284.441 87.192 30.089Source: Same as Table 3

There was no systematic pattern in the variation in the revenue expenditure of health care services. There were some states which had more variation as compared to the all India figure of (17.11%) like Andhra Pradesh, Assam, Orissa, Haryana, Kerala, West Bengal, Bihar, Gujarat, Uttar Pradesh ,Maharashtra, Rajasthan and very few states which were below the national variation, like Karnataka, Tamil Nadu, Punjab and Madhya Pradesh.


Table 5: Intra-state Variations in Revenue Expenditure on Health: 1991-2009

StateHealth Expenditure

Mean SD CV

Andhra Pradesh 236.64 66.91 28.27

Assam 246.20 70.74 28.73

Bihar 129.43 25.74 19.88

Gujarat 224.57 43.12 19.20

Haryana 304.08 70.09 23.05

Karnataka 244.55 35.15 14.37

Kerala 310.02 72.10 23.26

Madhya Pradesh 213.10 33.29 15.62

Maharashtra 264.60 49.86 18.84

Orissa 201.29 48.73 24.21

Punjab 307.53 46.86 15.24

Rajasthan 295.53 52.69 17.83

Tamil Nadu 257.22 34.13 13.27

Uttar Pradesh 145.77 28.23 19.36

West Bengal 196.52 39.91 20.31

India 228.81 39.15 17.11Sources: RBI Bulletin on State Government Finances and CSO, Govt. of India

Like the revenue expenditure, in case of capital expenditure, also there was severe inter-states variation in the share of capital expenditure of health services. In this share, Rajasthan recorded the highest proportion of capital expenditure on health care, mainly on account of higher expenditure on water supply and sanitation. Rajasthan (135.49) was followed by Haryana (120.18) and Gujarat (92.38) occupied the second and third position respectively. On the other hand Maharashtra and Kerala recorded the lowest proportion of expenditure in total capital expenditure. Some of the other developed states like Tamil Nadu (65.07); Karnataka (62.21) had fared well as compared to the all India average (46.96) of capital expenditure. Except above states, all other states were below the all India average of capital expenditure on Health care services. There was severe variation in this capital expenditure of health services, the states like Assam, followed by Punjab, Andhra Pradesh, West Bengal, Uttar Pradesh, Maharashtra, Karnataka, Madhya Pradesh registered extreme variation and lowest variation found in Kerala followed by Rajasthan, Haryana and Gujarat.

74 Sachita Nanda Sa

Table 6: Intra-State Variations in Capital Expenditure on Health: 1991-2009.

State Health Expenditure

Mean SD CV

Andhra Pradesh 16.99 27.37 161.05

Assam 25.40 44.50 175.22

Bihar 24.88 19.66 79.02

Gujarat 92.83 60.63 65.32

Haryana 120.18 77.65 64.61

Karnataka 62.21 70.08 112.65

Kerala 10.71 3.55 33.17

Madhya Pradesh 27.34 27.43 100.35

Maharashtra 10.69 12.54 117.33

Orissa 32.03 26.52 82.80

Punjab 26.16 43.82 167.53

Rajasthan 135.49 67.12 49.54

Tamil Nadu 65.07 59.65 91.67

Uttar Pradesh 21.17 25.47 120.31

West Bengal 22.15 29.12 131.47

India 46.96 31.34 66.74

Sources: RBI Bulletin on State Government Finances and CSO, Govt. of India

Towards an ExplanationThe deceleration in health expenditure of a large number of Indian states, particularly in states with low level of attainments after the introduction of economic reforms has not received the attentions by many academicians. One question that arises is what the reasons for this observable fact are? One of the factors that could have contributed to this common pattern is the fiscal crisis that the states have been facing since the mid-1980s. Sato (1988) analyzed fiscal transfers from the central government to the states between 1972 and 1984, and he was able to explain the structural reasons why the state governments had to level off or reduce social service expenditures. Fiscal transfers from the central government favored infrastructure investment especially in states with high per capita state domestic product (SDP). Meanwhile, the use of these transfers to raise state social service expenditures was restricted; therefore state governments generally did not increase social service expenditures at the cost of increased revenue deficits. Under this fiscal transfer system, states with low per capita SDP were less likely to increase social service expenditures, while states which strived to maintain high social service expenditures as a matter of state government policy were likely to experience overdraft


problems and revenue deficits. Even before the far-reaching economic reforms began in 1991, social service expenditures were particularly vulnerable to budget cuts (Harris-White 1999:303) which generally affected state government social service expenditures. An empirical study by Prabhu and Sarkar (2001) that examined the real per capita social service expenditures in the 15 states from 1974-75 to 1995-96 found that the declining trend in these expenditures started even before economic reforms began in 1991. By examining a longer time frame, their article found that economic reforms were not the turning point for changes in expenditures, although they examined only up to the mid-1990s. Rao and Sen (1993) identified the two reasons that could have contributed to the worsening of the fiscal situation of states. Those are

(1) The pressure to increase expenditure on quasi-public goods, subsidies, and transfers following the high expenditure growth at the central level and

(2) Proliferation of centrally sponsored schemes since the early 1980s that has required the states to commit resources to such schemes.

There are mainly three reasons why state government started reducing social services expenditures in the 1980s. Firstly, Because of the new overdraft scheme introduced by RBI in January 1985, the states were not allowed to maintain overdrafts with RBI for more than 7 consecutive days which enforced the states to go for borrowing from institutional and financial agencies. Moreover the cost of such funds was higher. The fiscal stringency faced by the states since the mid-1980s is similar to the situation at the Centre since mid-1991. This could have had an adverse effect on the spending on social services in real per capita terms. Secondly, state governments increased civil servant salaries and pensions in the mid-1980s following the recommendation of the Fourth Central Pay Commission. This increase coupled with rising interest payments on the states’ growing debt issues meant that development expenditures had to be reduced in order to pay for salaries and pensions in non-development expenditures. As already pointed out, most of the states started to reduce development expenditures in the mid-1980s, which means that social service expenditures specifically health and education, have been sacrificed since the mid-1980s. Thirdly, the reduction of transfers from the central government since the mid-1980s has also played a role in the decline of social service expenditures.

CONCLUSIONSDespite India’s impressive economic performance after the introduction of economic reforms in the 1990s, progress in advancing the health status of Indians has been slow and uneven. Most surprisingly, the backward states of India have been lagging behind other states in achieving the goal of “health for all”. Although all the states in India have the responsibility to spend more on health and education but unfortunately they had not given enough importance to these sectors after 1990’s and even before because of the fiscal crisis with relatively low level of political commitment to social sectors. There is interdependence between human development indicators and the level of health expenditure of the government, so the main emphasis in this paper has been examining the variations in real per capita health expenditure incurred by various state governments in India.

The analysis has revealed that there is a deceleration in per capita government expenditure on health expenditure in a majority of under developed states of India. Regarding the pattern of health expenditure, there were severe differences in the allocation of health expenditure in terms of both revenue expenditure and capital expenditure of health care services. There were also significant differences in the allocation of various components of health expenditure i.e. expenditure on

76 Sachita Nanda Sa

Medical and public health, Family Welfare and Water Supply and Sanitation. As already observed that intra- states variation for each state were lower than inter-state variations in health expenditure. Regarding the variations in health expenditure, the capital account of health expenditure showed more fluctuations in resource allocation then the revenue account. The analysis indicates varied of experience of Indian states. While southern states of Kerala, Karnataka, Tamil Nadu and Andhra Pradesh showed a constant increasing pattern of health expenditure after the introduction of economic reforms. They have continued to give high priority to finance human development; other relatively high expenditure states such as Punjab, Haryana, and Gujarat have not hesitated to slash funds for health expenditure despite none too encouraging performance on the human development front. The deceleration of health expenditure in the low income and low human development states of Bihar, Madhya Pradesh, Uttar Pradesh, Assam and Odisha implied that the cherished goals of “Health for all” remain subtle as ever. Recently these low income states have registered a steady increase in health expenditure but the WHO stated goal is far away to achieve.

References / NotesNotes1. Assistant Professor in Economics, P.G Dept of Social Science, Fakir Mohan University, Balasore, Email:

[email protected]

2. Dr N.J. Kurian “Financing healthcare in India”, The Hindu, January15, 2010

3. World Health Statistics 2012, WHO and Rao and Chaudhury (2012) “Health Care Financing Reforms in India” NIPFP, Working Paper No: 2012-100, March- 2012.

4. GDP deflator is the ratio of nominal GDP in a given year to real GDP of that year. The deflator measures the change in prices that has occurred between base year and the current year.

5. In case of GSDP deflator it is the ratio of nominal GSDP in a given year to real GSDP of that year.

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