Public Expenditure Benefit Incidence on Health: Selective Evidence from India

NIPFP Working Paper 111
[PDF]

Lekha Chakraborty, Yadawendra Singh and Jannet Farida Jacob
December 2012

Abstract

Effectiveness of public spending still remains relatively an elusive empirical issue. This preliminary analysis is an attempt on the topic, using benefit incidence methodology, at the subnational government level in health sector of India. The results revealed public health system is ‘seemingly’ more equitable in a few States, while a regressivity in pattern of utilization of public health care services is observed in other States. Both these evidences were to be considered with caution, as the underdeveloped market for private inpatient care in some states might be the factor for disproportionate crowding-in of inpatients, which made the public health care system looked ‘seemingly’ more equitable. However, the ‘voting with feet’ to better private services seems evident only for the affordable higher income quintiles. Results also suggest that polarization is distinctly evident in the public provisioning of heath care services, more related to the in-patient services than the ambulatory services.

Determination of Interest Rate in India: Empirical Evidence on Fiscal Deficit-Interest Links and Financial Crowding Out

NIPFP Working Paper 110
[PDF]

Lekha Chakraborty
December 2012

Abstract

Controlling for the capital flows, using the high frequency macrodata of financially deregulated regime, the paper examined whether there is any evidence of fiscal deficit determining interest rate in the context of India. The period of analysis is FY 2006-07[04] to FY 2011[04]. Quite contrary to the debates in the policy circles, the results found that increase in fiscal deficit does not cause the rise in interest rates. Using the asymmetric vector autoregressive model, it is established that the rate of interest is affected by the reserve money changes, expected inflation and volatility in the capital flows, but not the fiscal deficit. This result has significant policy implications for interest rate determination in India. The long term and short term interest rates are analysed to determine the occurrence of financial crowding out, but fiscal deficit does not appear to be causing both shorts and longs.