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

Muttur Ranganathan, Narayana (2016): Will a Universal Health Coverage Policy be fiscally sustainable for India? New evidence and implications.

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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.

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