In the Review, we summarise the economic and policy developments in India; monitor global developments of relevance to India; and showcase the pulse of the economy through an analysis of high-frequency indicators and the heat map.
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This is more so in rural areas. Insurance cover, public health are issues.
The Covid-19 pandemic has redefined our health policies and strategies. It laid bare the inter-linkages between the healthcare systems, its availability, adequacy and affordability.
At the core is the cost implication and impact on households over hospitalisations and healthcare interventions. The cost impact is most acute for those who bear it entirely out-of-pocket.
The worrisome and perhaps unsustainable aspect of healthcare financing is the rising out-of-pocket (OOP) expenditure for households. Per the December, 2023 study by the National Insurance Academy (NIA), over 50 per cent (in 2020) of healthcare expenses are borne directly by individuals. It signifies a substantial reliance on out-of-pocket payments.
So to finance their healthcare expenditure, people either have to dip into their savings or borrow. Not being able to easily finance their health expense would result in some section of the ailing population foregoing treatment, or resorting to desperate financing.
RURAL-URBAN DIVIDE
A close examination of the data from the National Sample Survey (NSS) rounds of household consumption expenditure survey spanning from 1999-2000 to 2022-2023 unveils an intriguing narrative.
Hospitalisation expenditure is showing a rising trend in rural households. Monthly per capita consumption expenditure (MPCE) on hospitalisation has risen from 1.37 per cent of the total in 1999-2000 to 2.36 per cent in 2022-23. In urban areas, the increase over this period is from 1.44 per cent to 1.91 per cent (see table). Lack of medical facilities and specialised manpower have forced people in rural areas to rush to urban and semi-urban centres and cities for medical treatment.
Apart from the treatment and hospitalisation expenses, expenditure also has to be incurred on transportation, food and lodging. With better medical facilities, urban households’ share out of their MPCE in hospitalisation expenses is comparatively lower, except during 1999-2000, and it ranges between 1.44 per cent and 1.96 per cent.
It is also interesting that non-hospitalization expenses (i.e., OPD expenses on medicine, X-ray, ECG, pathological tests, doctor’s fees, and other medical expenses) consumed a much larger share of households’ MPCE in both rural and urban areas, with rural households being more disadvantaged.
Perhaps the frequency at which expenses are carried out for non-hospitalisation interventions is a factor. It hovered around 4.72 per cent in 1999-2000 to 4.77 per cent in 2022-23 with a slight dip in 2009-10 for rural households. It stood at 3.62 per cent in 1999-2000 and at 4.00 per cent in 2022-23, with a slight dip in 2009-10 in urban areas.
Cumulatively, it implies that rural households spent about 5 per cent to more than 7 per cent of their total monthly expenditure on hospitalization and non-hospitalisation expenses. It is lower for urban households at 5 per cent to less than 6 per cent of their monthly expenditure.
This variation could be explained by the fact that generally rural households have a lower per capita income and they have to incur travel expenses when they go to urban centres for treatment where medical facilities are better. The rising medical cost would further dent rural households’ budget.
Moreover, health insurance coverage in the rural areas is much less compared to urban areas. The NIA Report revealed that across age groups the “health protection gap” is in the range of 65-90 per cent in rural areas.
A VIABLE STRATEGY
Lowering the burden of medical expenses, especially out-of-pocket expenses, on households warrants a holistic approach for both the rural and urban households.
Public health spending in India has been abysmally low at below 3 per cent of the GDP. In the developed countries, it is between 6-10 per cent of the GDP.
There is a need to gradually raise it. Strengthening and supplementing the existing medical facilities and manpower in the rural areas will go a long way in reducing medical expenses.
Health insurance penetration in the country is not only inadequate but premiums have been on the rise. The government induced health insurance products through various schemes is limited in it reach.
According to the NITI Aayog Report of 2021, about 40.5 crore are the “missing middle” individuals who are not covered under any health insurance schemes. Insurance companies have so far been shying away to expand their coverage in rural areas.
IRDAI on May 10, 2024, issued a master circular directing insurance companies to do a certain percentage of business compulsorily towards meeting rural, social sector and motor third party obligations. Under this the general and health insurers would be allocated gram panchayat.
Every individual possesses a fundamental right to healthcare. Customised health insurance products along with improved public healthcare facilities will definitely contribute in lowering the burden of the households.
All stakeholders need to play a pro-active role. Any initiative aiming to reduce out-of-pocket expenditure is a step forward to prevent households from catastrophic healthcare expenditure.
Baruah is Associate Fellow at National Council of Applied Economic Research (NCAER); Wankhar is a retired govt officer. Views expressed are personal.
Background:
Fertility histories are subject to measurement errors such as incorrect birth dates, incorrect birth orders, incorrect sex, and omissions. These errors can bias demographic estimates such as fertility rates and child mortality rates.
Objective:
We focus on births missing in fertility histories. We estimate the prevalence of such omissions and study their associated factors.
Methods:
We leverage a panel survey (the India Human Development Survey) where the same women were interviewed in two waves several years apart. We compare data across waves and identify omitted births. Omissions in the second wave are modeled as a function of several child, mother, household, and survey interviewer variables. Models are fit separately to omissions reported alive or dead in the first wave.
Results:
We conservatively estimate the prevalence of omissions at 4%. A large majority of omitted births are those of dead children, especially infants, with children in poorer households at greater risk of being omitted. For children alive in wave 1, female children are much more likely to be omitted in wave 2 compared to male children. Interviewers can detect respondent behaviors associated with omissions.
Conclusions:
Omissions in fertility histories are non-ignorable. They do not randomly occur but affect some population sub-groups and some interview contexts more than others.
Contributions:
We investigate the understudied but important phenomenon of omitted births in fertility histories. We bring attention to possible biases in demographic estimates. We shed light on the survey process and propose strategies for minimizing the bias through improved survey design.
To maximise India’s youth-driven economic potential, it must boost women’s participation in labour force
The often-quoted expression “demographic dividend” connotes the potential economic growth that can result from shifts in a population’s age structure. It implies the economic benefits resulting from a larger share of the working-age population.
Changes in a country’s population age structure can significantly have a positive effect on its economic performance, provided there is adequate and sufficient investment in human capital to leverage the productivity associated with it.
According to the Economic Survey of 2018–19, the share of India’s young population (below 19 years) has already started declining and is projected to drop from a high of 41per cent in 2011 to 25 per cent by 2041. Thus, the prospective demographic dividend will peak around 2041, with the share of the working-age population (20–59 years) expected to reach 59 per cent. This is expected to boost economic productivity, which occurs when people in the workforce are relatively outnumbered by dependents.
Women now constitute almost half of the country’s population. A similar trend is observed in the working-age population, reflecting an equal gender proportion in the working-age population. However, everything is not smooth sailing on the employment front.
Economic participation among women
Considering all economic activities, the share of young women (15–29 age group) in economic activity (Worker Population Ratio) was only about 19 per cent, while it was almost three times higher at 54 per cent for young men in 2022.
WPR is defined as the percentage of employed persons in the population. It is no different among the adult working population. Only 38 per cent of women (30-59 age group) are engaged in any economic activity, while it was 86 per cent for men.
It also revealed that about a quarter of adult women are engaged in domestic duties, while it is a meagre 0.6 per cent for men. As one understands, domestic duties, especially in one’s own household, are unpaid work. Thus, not only do women participate less in economic activities, but it is also unpaid for a quarter of those employed.
A similar trend was observed in the labour force participation rate (LFPR), which is defined as the percentage of the population in the labour force (i.e., working, seeking, or available for work) in the population. Women in the age group of 15–29 show an LFPR of 22 per cent as compared to their male counterpart at 61per cent.
It cannot even be argued that the lower LFPR among young women could be due to their involvement in education activities or skill upgrading, as no similar trend is observed among young men. Further, LFPR for women in the age group of 30-59 was at 39 per cent as compared to 86 per cent for men in the same age group.
Thus, WPR and LFPR for men in the age group of 15–29 years is almost three times that of women in the same age group, and it is more than twice in the age group of 30-59 years. The stark disparity is too obvious to ignore. This deep-rooted gender disparity will not only result in the under-utilisation of human capital but also paint an unreliable picture of employment.
Seizing the opportunity
It is without doubt that women are the most “underutilised asset” in the country. The optimal “demographic dividend” would heavily depend on their participation in productive and gainful economic activity. With women constituting almost half the population, their participation in economic activity will not only stimulate various economic activities leading to increased personal and household income but also push consumption levels.
The multiplier effect will lead to overall enhanced economic prosperity. To this end, it is necessary to create an environment that supports women’s education, especially higher and technical education, skills and capacity building, and upgradation. Both the government and private sector should be called upon to work on a road map.
The country’s economic growth would be greatly boosted if the transformative potential of the working-age population, including women, was properly harnessed and tapped. It is also aligned with the Sustainable Development Goals (SDGs) of Quality Education (Goal 4), Gender Equality (Goal 5), Decent Work and Economic Growth (Goal 8), and Reduced Inequalities (Goal 10). This should be one of the visions for “Viksit Bharat 2047.”
We owe it to the women of this country.
Nijara Deka and Palash Baruah are associate fellows at the National Council of Applied Economic Research (NCAER), New Delhi
Based on the NSSO’s data, a man spent an average of 74 minutes a day on childcare whereas a female spent a disproportionate length of 134 minutes a day on the same.
Furthermore, care given to other family members is so gender-defined that irrespective of any other paid activity, women spend a definite length of time in unpaid activities, specifically caregiving activities. About 40 per cent of women between 15 and 29 years of age are involved in caregiving activities as against only 12 per cent of men of the same age group. Among those outside the workforce — women neither looking for a job nor currently working — about 29 per cent do unpaid care activities as against only 7 per cent of men. This indicates how unpaid caregiving services have impacted the employability of women. Household responsibilities keep women outside the workforce, and the case is completely contradictory for unemployed men.
This data, though, does not prove that women’s engagement in unpaid caregiving work is the most likely contributor to their lower participation in the workforce.
It is undeniable that having a young child substantially decreases women’s autonomy over their own time. At the same time, it has a normatively less effect on men’s activities and time. This caregiving has been even costlier, both physically and emotionally, when it comes to daily wage earners, which adds an additional worry of having an unattended young child.
“Demographic dividend”, which is expected to boost economic productivity, occurs when there are more working people than dependents. While India should potentially soon reap the benefits of its demographic dividend, a recent study titled The Other Half of the Demographic Dividend by Sonalde Desai suggests that the actual rate would likely be significantly less than anticipated. She observes that the dependency ratio of the non-working-age population to the working-age population is more than double if the differences in worker population ratio are considered. Women constitute half of the country’s population. The India Employment Report 2024 also highlights the likelihood of young women (in the age group of 15 to 29) not being in employment, education, or training is higher at 48 per cent, which is almost five times that of men (at 10 per cent) in 2022. Also, a young woman spent six times more than the young man in unpaid activities as a share of the time spent in all activities.
The share of young men (15-29 age group) involved in economic activity (Worker Population Ratio or WPR) was 54 per cent, while that of young women of the same age group was only about 19 per cent. Thirty-two per cent of non-student young women who are in the workforce as against 97 per cent of non-student young men, according to the India Employment Report 2024. Consequently, the Worker Population Ratio (WPR) and Labour Force Participation Rate (LFPR) of males are approximately three times greater than those of women in the 15–29 age bracket, and over twice as great in the 30-59 age bracket.
Learn from these states
Tackling gender inequality in the workforce may result in a notable increase in economic output as well as the empowerment of women economically. Providing childcare might enhance their agency, aid in their pursuit of greater economic parity, and, as a result, greatly boost the economy. The National Crèches Scheme and the Palna Scheme under the Mission Shakti Project of the Ministry of Women and Child Development gave state governments the option to establish standalone crèches or convert Anganwadi centres into crèches in addition to the MBA. The Assam, Karnataka, Odisha, and Haryana state governments have begun to take action. The central government wrote to the states in November 2017 — four months after the deadline of MBA — requesting them to frame and notify rules for companies to set up the creche facility. Yet, only Karnataka had notified the maternity benefit rules as of May 2020. Tamil Nadu announced the regulations in January 2021, followed by Haryana in July 2023. The Shops and Establishments Act of Maharashtra has the clause. The following chart highlights the number of creches under the National Creche Scheme and also displays the states notified in the MBA. Central data maintenance is not available for the crèches operated by private NGOs and those covered by the MBA.
Childcare is neither a market commodity nor a social programme but a right of women. Empirical evidence proves a direct correlation between access to childcare and women’s labour force participation. The expansion in the caregiving economy not only gives greater opportunities to mothers but also creates formalised jobs for women to be engaged in the care economy. Apart from the crèche facilities, day-boarding is also an underexplored option as a solution. The model is prevalent only in big cities and is still at a nascent stage. It can actually provide a better panacea for all-round child development and, at the same time, build a holistic childcare ecosystem, which can support a working environment for women.
We have the national minimum standards and protocols for crèche facilities, as well as acts and amendments that establish the requirements of the childcare infrastructure. But the implementation of this requires some initiatives at the local level too. Some states have already taken up initiatives in this direction, which can be followed to create a well-thought-out strategy and a fiscal plan for implementing them in other states.
Nijara Deka is Associate Fellow, National Council of Applied Economic Research. Views are personal.