Rural–urban differentials in out-of-pocket health expenditure and resultant impoverishment in India: evidence from NSSO 71st Round


In low- and middle-income countries including India people often face the problem of affordability and access to health care, especially the poor and vulnerable. A high share of out-of-pocket (OOP) expenditure in total health expenditure puts a catastrophic burden on population and pushes them below the poverty line. Therefore, the present paper seeks to examine the level of economic burden and the resultant impoverishment of OOP expenditure among different socio-economic variables, separately for rural and urban areas in India. The current paper uses the cross-sectional data from the National Sample Survey Organisation (NSSO) 71st (Key indicators of social consumption in India: health, 71st round (January–June 2014). Ministry of Statistics and Programme Implementation, Government of India, New Delhi, 2014) round. Results reveal that in urban areas, the incidence of OOP health expenditure is concentrated towards poorer consumption groups, whereas in rural areas, it is pro-rich, especially at higher threshold levels. Rural population spent a higher proportion of consumption expenditure on health care, whereas average per capita health expenditure is higher in urban areas. Results also show that 8.1 and 7.9% population in rural and urban areas, respectively, fell below the poverty line due to OOP health expenditure. The poverty deepening is much higher in rural areas as compared to urban areas. Among different socio-economic variables, Muslims, Other Backward Classes, and casual labour have a higher burden of OOP health expenditure and poverty impact, especially in urban areas. We conclude that the unavoidable and extensive dependence on OOP health expenditure leads to poverty, thus making a strong case for the implementation of universal health coverage.

This is a preview of subscription content, access via your institution.

Fig. 1


  1. 1.

    National Rural Health Mission (NRHM) is a flagship programme started by the government of India in 2005 to provide accessible, affordable and quality health care to the rural population in India.





National Sample Survey Organisation


Low- and middle-income countries


Consumption expenditure surveys


Mean positive gap


Concentration index


Consumer price index


Monthly per capita consumption expenditure


Total consumption expenditure


Scheduled tribes


Scheduled castes


Other backward classes


Gross domestic product


National rural health mission


Publicly financed health insurance


Rajiv Aarogyasri health insurance scheme


Chief Minister’s comprehensive health insurance scheme


Rashtriya Swasthya Bima Yojana


  1. Banerjee AV, Banerjee A, Duflo E (2011) Poor economics: a radical rethinking of the way to fight global poverty. Public Affairs 

  2. Baru RV (2013) Challenges for regulating the private health services in India for achieving universal health care. Indian J Public Health 57(4):208

    Google Scholar 

  3. Baru R, Acharya A, Acharya S, Kumar AS, Nagaraj K (2010) Inequities in access to health services in India: caste, class and region. Econ Polit Wkly xlv(38):49–58

    Google Scholar 

  4. Berman P, Ahuja R, Bhandari L (2010) The impoverishing effect of healthcare payments in India: new methodology and findings. Econ Polit Wkly 45(16):65–71

    Google Scholar 

  5. Bonu S, Bhushan I, Rani M, Anderson I (2009) Incidence and correlates of ‘catastrophic’ maternal health care expenditure in India. Health Policy Plan 24:445–456

    Article  Google Scholar 

  6. Bredenkamp C, Mendola M, Gragnolati M (2010) Catastrophic and impoverishing effects of health expenditure: new evidence from the Western Balkans. Health Policy Plan 26:349–356

    Article  Google Scholar 

  7. Commission P (2013) Press note on poverty estimates, 2011–2012

  8. Fuller MF, Lury DA (1977) Statistics workbook for social science students. Phillip Allan

  9. Garg CC, Karan AK (2008) Reducing out-of-pocket expenditures to reduce poverty: a disaggregated analysis at rural-urban and state level in India. Health Policy Plan 24:116–128

    Article  Google Scholar 

  10. Ghosh S (2010) Catastrophic payments and Impoverishment due to Out-of-Pocket health spending: the effects of recent health sector reforms in India

  11. Ghosh S (2014) Equity in the utilization of healthcare services in India: evidence from National Sample Survey. Int J Health Policy Manag 2:29

    Article  Google Scholar 

  12. Gulliford M, Figueroa-Munoz J, Morgan M, Hughes D, Gibson B, Beech R, Hudson M (2002) What does’ access to health care’mean? J Health Serv Res Policy 7:186–188

    Article  Google Scholar 

  13. Gupta RP (2016) Health care reforms in India-e-Book: making up for the lost decades. Elsevier Health Sciences, New York

    Google Scholar 

  14. IRDA (2016) Annual Report 2015-16. Insurance Regulatory and Development Authority of India (IRDAI), Hyderabad, India

    Google Scholar 

  15. Joe W (2014) Distressed financing of household out-of-pocket health care payments in India: incidence and correlates. Health Policy Plan 30:728–741

    Article  Google Scholar 

  16. Karan A, Selvaraj S, Mahal A (2014) Moving to universal coverage? Trends in the burden of out-of-pocket payments for health care across social groups in India, 1999–2000 to 2011–12. PLoS One 9:e105162

    Article  Google Scholar 

  17. Karan A, Yip W, Mahal A (2017) Extending health insurance to the poor in India: an impact evaluation of Rashtriya Swasthya Bima Yojana on out of pocket spending for healthcare. Soc Sci Med 181:83–92

    Article  Google Scholar 

  18. Kruk ME, Goldmann E, Galea S (2009) Borrowing and selling to pay for health care in low-and middle-income countries. Health Aff 28:1056–1066

    Article  Google Scholar 

  19. Kumar K et al (2015) Socio-economic differentials in impoverishment effects of out-of-pocket health expenditure in China and India: evidence from WHO SAGE. PloS One 10:e0135051

    Article  Google Scholar 

  20. Ladusingh L, Pandey A (2013) Health expenditure and impoverishment in India. J Health Manag 15:57–74

    Article  Google Scholar 

  21. Mahapatro M (2015) Equity in utilization of health care services: perspective of pregnant women in southern Odisha, India. Indian J Med Res 142:183

    Article  Google Scholar 

  22. NHA (2016) National health accounts 2013–14. Ministry of Health and Family Welfare, Govt. of India, New Delhi

    Google Scholar 

  23. NSSO (2014) Key indicators of social consumption in India: health, 71st round (January–June 2014). Ministry of Statistics and Programme Implementation, Government of India, New Delhi

    Google Scholar 

  24. Powell-Jackson T, Acharya A, Mills A (2013) An assessment of the quality of primary health care in India. Econ Polit Wkly 48:53–61

    Google Scholar 

  25. Pradhan M, Prescott N (2002) Social risk management options for medical care in Indonesia. Health Econ 11:431–446

    Article  Google Scholar 

  26. Prinja S, Chauhan AS, Karan A, Kaur G, Kumar R (2017) Impact of publicly financed health insurance schemes on healthcare utilization and financial risk protection in india: a systematic review. PloS One 12:e0170996

    Article  Google Scholar 

  27. Ranson MK (2002) Reduction of catastrophic health care expenditures by a community-based health insurance scheme in Gujarat, India: current experiences and challenges. Bull World Health Organ 80:613–621

    Google Scholar 

  28. Reddy KS, Patel V, Jha P, Paul VK, Kumar AS, Dandona L, Healthcare LIGfU (2011) Towards achievement of universal health care in India by 2020: a call to action. Lancet 377:760–768

    Article  Google Scholar 

  29. Registrar General I (2011) Census of India 2011: provisional population totals-India data sheet Office of the Registrar General Census Commissioner, India Indian Census Bureau

  30. Roy K, Howard DH (2007) Equity in out-of-pocket payments for hospital care: evidence from India. Health Policy 80:297–307

    Article  Google Scholar 

  31. Selvaraj S, Karan AK (2009) Deepening health insecurity in India: evidence from national sample surveys since 1980s. Econ Polit Wkly 44(40):55–60

    Google Scholar 

  32. Singh S, Badaya S (2014) Health care in rural India: a lack between need and feed. S Asian J Cancer 3:143

    Article  Google Scholar 

  33. Swarup A, Jain N (2011) Rashtriya Swasthya Bima Yojana Innovative 259

  34. Wagstaff A, Doorslaer EV (2003) Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993–1998. Health Econ 12:921–933

    Article  Google Scholar 

  35. WHO (2010) World Health Report, 2010: health systems financing the path to universal coverage World Health Report, 2010: health systems financing the path to universal coverage

  36. WHO (2015) World health statistics 2015. World Health Organisation, Geneva

    Google Scholar 

Download references

Author information



Corresponding author

Correspondence to Ramna Thakur.

Ethics declarations

Data availability

Data set has been purchased from the Ministry of Statistics and Programme Implementation (MOSPI) for the purpose of analysis.

Conflict of interest

The authors have no conflict of interest.

About this article

Verify currency and authenticity via CrossMark

Cite this article

Sangar, S., Dutt, V. & Thakur, R. Rural–urban differentials in out-of-pocket health expenditure and resultant impoverishment in India: evidence from NSSO 71st Round. Asia-Pac J Reg Sci 3, 273–291 (2019).

Download citation


  • Out-of-pocket
  • Burden
  • Impoverishment
  • Rural
  • Urban