Public Expenditure Benefit Incidence on Health: Selective Evidence from India

Lekha Chakraborty,Yadawendra Singh,Jannet Farida Jacob

Working Paper No. 2012-111, December 2012

National Institute of public finance and policy


Effectiveness of public spending still remains relatively an elusive empirical issue. This preliminary analysis is an attempt on the topic, using benefit incidence methodology, at the subnational government level in health sector of India. The results revealed public health system is ‘seemingly’ more equitable in a few States, while a regressivity in pattern of utilization of public health care services is observed in other States. Both these evidences were to be considered with caution, as the underdeveloped market for private inpatient care in some states might be the factor for disproportionate crowding-in of inpatients, which made the public health care system looked ‘seemingly’ more equitable. However, the ‘voting with feet’ to better private services seems evident only for the affordable higher income quintiles. Results also suggest that polarization is distinctly evident in the public provisioning of heath care services, more related to the inpatient services than the ambulatory services.