Are Better Health Outcomes Related to Social Sector Public Expenditure? – Evidences from a Panel Data Study of Indian States

The paper tests the contribution of social sector expenditure on the infant mortality rate at sub national level in India using a balanced panel analysis covering period from 2000–01 to 2015–16. Using fixed effect and random effect models paper investigated whether higher budgetary spending on social sector favorability affected the IMR in the various states of India. The paper also used dynamic panel analysis using gretl software and estimated the results eliminating unobserved heterogeneity. The results indicated weak relationship between health outcomes captured by level of IMR and social sector expenditure. The paper found evidence of reduction of IMR across Indian states and reduction in inequalities across Indian states. The level of IMR is significantly correlated with per capita income indicating that route to better health outcome seems to be through better income levels.