Exploring the link between rural–urban health inequalities and health spending in India

We investigate the relationship between rural–urban health inequalities and state health spending in major Indian states between 2011 and 2020. We use a comprehensive set of ten health indicators and introduce a suitably defined inequality measure to analyze the pattern of inequalities. We find mixed results in the reduction of inequalities, while there are significant reductions in states like Uttar Pradesh and Assam, other states, especially Punjab, continue to face challenges. Moreover, we use responsiveness and elasticity analyses to explore the relationship between increased health expenditure and the reduction of rural–urban health inequalities. We notice a complex and non-uniform pattern in response to increased spending, where states such as Maharashtra exhibit success in reducing inequalities, concerns remain regarding the overall competence of this reduction, with Bihar showing a low response. Notably, among the indicators, antenatal care demonstrates an ideal response, whereas child stunting displays a less favorable response in most states. Our findings emphasize the need for targeted policy interventions that consider the varied effectiveness of health spending across different indicators and states, contributing valuable insights to the discourse on health equity in India.