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Will a Universal Health Coverage Policy be fiscally sustainable for India? New evidence and implications

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  • Muttur Ranganathan, Narayana

Abstract

This paper analyses the fiscal sustainability of India’s recently proposed Universal Health Coverage Policy (UHCP) over the period 2005-2100. Public expenditure on UHCP is calculated by combining the age profiles of public and private health consumption expenditure in the framework of National Transfer Accounts. Fiscal sustainability of UHCP is determined by using the concept and measure of Generational Imbalance in Generational Accounting. In general, the results show that India’s current fiscal policies are not sustainable in both the Baseline and UHCP expenditure scenarios. However, other things being the same, fiscal sustainability of public expenditure on the UHCP is attainable in both the policy scenarios if the income elasticity of public expenditure on social welfare and health expenditure is less than unity. These new results offer evidence and strengthen the arguments for implementation of proposed UHCP by justifying its fiscal sustainability.

Suggested Citation

  • Muttur Ranganathan, Narayana, 2016. "Will a Universal Health Coverage Policy be fiscally sustainable for India? New evidence and implications," MPRA Paper 69668, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69668
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    References listed on IDEAS

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    1. Indrani Gupta, 2015. "Financing for Health Coverage in India: Issues and Concerns," Working Papers id:7008, eSocialSciences.
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    3. Andrew Mason & Ronald Lee, 2011. "Introducing age into national accounts," Chapters, in: Ronald Lee & Andrew Mason (ed.), Population Aging and the Generational Economy, chapter 3, Edward Elgar Publishing.
    4. Ronald Lee & Andrew Mason (ed.), 2011. "Population Aging and the Generational Economy," Books, Edward Elgar Publishing, number 13816.
    5. Auerbach, Alan J. & Kotlikoff, Laurence J. & Leibfritz, Willi (ed.), 1999. "Generational Accounting around the World," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226032139, December.
    6. Alan J. Auerbach & Laurence J. Kotlikoff & Willi Leibfritz, 1999. "Generational Accounting around the World," NBER Books, National Bureau of Economic Research, Inc, number auer99-1, July.
    7. Alan J. Auerbach & Laurence J. Kotlikoff & Willi Leibfritz, 1999. "The Methodology of Generational Accounting," NBER Chapters, in: Generational Accounting around the World, pages 31-42, National Bureau of Economic Research, Inc.
    8. Planning Commission, 2011. "High Level Expert Group Report on Universal Health Coverage for India," Working Papers id:4646, eSocialSciences.
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    More about this item

    Keywords

    Universal Health Coverage; Public health expenditure; Fiscal sustainability; National Transfer Account; Generational imbalance; Generational Accounting; India;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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