Impact on poverty in India by household expenditure on health care


– Authors are Economists Charu C. Garg and Anup K. Karan.

– In India, an average of 4.8% of total household consumption expenditure is spent on out-of-pocket health care payments, and out of this about 65–70% is spent on drugs (urban/rural variations).

– 32.5 million persons fell below the poverty line in a single year (1999-2000) because of health care expenditure.

– Out-of-pocket payments, in addition to pushing a large number of people below the poverty line, also severely affect the living status of many households already below the poverty line. The poverty deepening was higher in rural areas.

– The increase in the number of poor as a direct result of out-of-pocket expenditure for health care was in rural areas 3.5% and in urban areas 2.5% in 1999-2000.

– In general, poor states in India have lower out-of-pocket health expenditures because of low incomes, limited access to health care, lack of awareness and poor infrastructure therein.

– In rural areas and poorer states, the average share of expenditure on medicines as opposed to other health services and products is higher.


Charu C. Garg and Anup K. Karan: Reducing out-of-pocket expenditures to reduce poverty: a disaggregated analysis at rural-urban and state level in India. Health Policy Plan. (2009) 24 (2): 16-128 first published online December 17, 2008



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