Page 152 - GHES-3-3

Global Health Economics and
Sustainability
A comparative analysis

Table 5. Factors determining COVID‑19 case fatality rate while Sikkim, Kerala, and West Bengal showed poor fiscal
discipline during the COVID-19 period. Nagaland had the
Indicators Coeff p‑value highest underutilization of resources, shown in the lowest
Intercept 2.5540 0.00*** actual-to-budgeted health expenditures.
THS_THE 3.3640 0.20 The Theil U-statistic, representing fiscal marksmanship
THS_CHE 0.1084 0.84 or discipline, showed that during the COVID-19 period,
THS_RHE −8.6570 0.11 India showed disciplined revenue but indiscipline in
PopDensity 0.0002 0.01*** capital expenditure. Madhya Pradesh, Nagaland, Odisha,
Avg_THE −0.2547 0.00*** Rajasthan, and Goa excelled pre-COVID-19. In contrast,
THE_2018 0.0000 0.26 Delhi, Sikkim, Uttarakhand, Meghalaya, and Tripura
Adj. R 2 0.24 performed poorly in total health expenditure. During
p-Value 0.06 COVID-19, Mizoram, Punjab, Himachal Pradesh,
Jharkhand, and Maharashtra excelled, while Nagaland,
Note: Data source: Union and state budget documents. Goa, Sikkim, Kerala, and West Bengal struggled.
Abbreviations: CFR: Case fatality rate; PopDensity: Population density;
Avg_THE: Average health expenditure during the COVID-19 period; During the pandemic, Gujarat, Madhya Pradesh, and
THE_2018: Total health expenditure in 1 year lag period (2018 – 2019); Uttar Pradesh exhibited superior fiscal discipline in capital
THS_THE: Theil’s statistic for total health expenditure; THS_CHE:
Theil’s statistic for capital health expenditure; THS_RHE: Theil’s expenditure, while Telangana, Meghalaya, and Assam
statistic for revenue health expenditure; ***Significant at 1% level. excelled in revenue expenditure. The analysis revealed
disparities in fiscal discipline across states, particularly
variable. With a positive coefficient, an increase in average during the pandemic, with Mizoram showing significant
health expenditure correlates with a decrease in CFR. deviation in capital expenditure. Despite no discernible
The coefficient of −0.2547 suggests that a unit increase in geographical pattern in maintaining fiscal discipline,
average health expenditure is associated with a significant an intriguing paradox emerges in the pre-COVID-19
reduction in CFR. Moreover, the change in average period where better-performing states are not part of
health expenditure accounts for 25% of the variation the prosperous state group. Nonetheless, during the
in CFR, highlighting its substantial explanatory power. COVID-19 crisis, Maharashtra, as the sole prosperous
In this analysis, fiscal marksmanship indicators do not state, exhibited superior fiscal discipline despite facing a
significantly influence CFR. substantial COVID-19 caseload.
The data in Figures 2-5, as well as Table 2 clearly show
4. Discussion that states with already high expenditure levels tend to
Several studies established a link between health exhibit higher values of Theil’s statistic, indicating greater
expenditure and socioeconomic factors (Onofrei et al., fiscal indiscipline. For instance, Delhi stands out in high
2021; Jakovljevic et al., 2016). Such causal relationships expenditure and Theil’s statistic values, particularly in
were a matter of broad attention by health economists in total health and revenue expenditures; however, fiscal
the mainstream seminal literature on health spending. It indiscipline in capital expenditure on health was primarily
is crucial to analyze India’s dynamics within the broader observed in states with lower average health expenditure as
context of the emerging markets and its health expenditure a proportion of their state budget. This situation suggests
trajectories (Jakovljevic et al., 2022). This study evaluated that these states are underfunding their health sectors,
the fiscal responsibility of Indian states in terms of medical emphasizing the imperative to increase health financing in
and public health spending during pre-COVID-19 and such regions.
COVID-19 periods. While regression analysis found no significant

Most states experienced increased health spending connection between fiscal marksmanship and CFR,
during the pandemic (Balajee et al., 2020; United it did reveal a noteworthy positive impact of health
Nations, 2020), with deviations from fiscal indicators expenditure on the CFR during COVID-19. This finding
mainly observed in the capital component. Analyzing the suggests that factors beyond fiscal indicators are crucial
actual-to-budgeted health expenditure ratio for Indian in socioeconomic well-being, potentially involving “civil
states during pre-COVID-19 and COVID-19 periods society” variables and administrative/allocative efficiency
demonstrated that the states of Gujarat and Maharashtra (Khan et al., 2020).
have balanced fiscal management. Arunachal Pradesh Simply spending more during emergencies does not
had the highest deviation in the pre-COVID-19 period, necessarily translate to better health outcomes (Sachs

Volume 3 Issue 3 (2025) 144 https://doi.org/10.36922/ghes.2920