Thread by @Artha__Global

Speaking at a #webinar on the Indian Health Financing Landscape, @CafeEconomics makes the following observations relating to 1) #FiscalCapacity 2) #PoliticalEconomy 3) #Federalism (1/n)

@dvararesearch @IndiaSpend

India's #PublicHealthExpenditure is well predicted by its income, however compared to neighbours and other #LMICS, its public health spending is lower. This is despite India's Tax/GDP ratio gradually rising over the years. (2/n)

The post-reform Indian fiscal agenda has been to switch away from #PhysicalCapital to #HumanCapital with increased reliance on the private sector to generate employment. Job growth however has been inadequate and the state's approach to #HumanCapital has been compensatory (3/n)

Given the constitutional mandate, Indian states assume a dominant responsibility in health financing. However, recent #StateBudgets suggest that education has gained more fiscal prominence in state budgets than health (4/n)

Even though, there is very limited scope for discretionary spending in the Indian budget, as Tax/GDP ratio rises, the state must commit a larger share (say one third) of this increase to #PublicHealth. (5/n)

While cash transfers and vouchers may work efficiently in well regulated, competitive markets, they can be price distortionary when there are monopolistic tendencies. Instead the state might consider investing in better systems such as #WASH. (n/n)