16. Health Expenditures Across Major States of India: Issues of Convergence and Equality

Health expenditure in India has become an important policy variable so far as the concept of social sector development is concerned. The distributional aspect of such expenditure is again another important side of the overall development of a country or state. The present paper tries to examine whether the major states of India are converging in terms of per capita health expenditure out of the state-wise capital expenditure provided by the central government in the head of medical and public health for the period 1990–1991 to 2009–2010. If they are found to be converging, then the study further explores on whether there is falling tendency of the dispersion and inequality of health expenditure across the states. Using the data of Reserve Bank of India on Capital Expenditure of different states and Barro and Sala-i-Martin (1992) method of convergence, the study reveals that there is absolute β convergence and σ results show the tendency of divergence among the states. The health expenditure concentration and inequality has been quantified by Gini coefficient and Theil index which show that there is rising inequality up to 2003–2004 and then the phase towards equality starts.