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It is estimated that, despite considerable investment in this priority sector, the public health infrastructure in India - including over 150 000 facilities - can serve no more than 20% of the Indian population.  There have been numerous attempts to understand and analyze the causes underlying the failures of the health policies - most of which focused the role of public and private institutions in the provision of health care. This particular PEP research project, however, aimed to identify the role that households play in determining their health status, as well as the macroeconomic effects this decision can generate. In terms of methodology, the researcher used a CGE modeling framework to simulate the effects of complete tariff liberalization in the presence / partial withdrawal / complete absence of health subsidy. The results show that 1) complete subsidization of health reduces overall disparity by favoring rural (vs urban) households and 2) withdrawal of health subsidy leads to domestic re-allocation of poverty pushing down the wage rates in agricultural sector (i.e. for rural households). Find out more about the researchers' findings through the PEP publication below:

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