THE IMPACT OF PUBLIC HEALTH EXPENDITURE ON ECONOMIC GROWTH IN HARYANA

Abstract

This study examines the impact of public health expenditure on economic growth in Haryana using annual time-series data over the period 2001–2022. Economic growth is measured by State Gross Domestic Product (SGDP), while public health expenditure is decomposed into total public health expenditure, revenue expenditure on health, and capital expenditure on health. Total government education expenditure and administrative regulation research are included as control variables. The Autoregressive Distributed Lag (ARDL) bounds testing approach is employed to analyse both short-run and long-run relationships among the variables. The empirical results confirm the existence of a long-run equilibrium relationship between public health expenditure and economic growth in Haryana. Long-run estimates reveal that total public health expenditure has a positive and statistically significant impact on SGDP, indicating that sustained investment in public health enhances productivity and economic performance. However, revenue and capital health expenditures exhibit negative and significant effects, suggesting inefficiencies and allocation issues in expenditure composition. In the short run, changes in total public health expenditure stimulate economic growth, while other expenditure components exert a contractionary effect. Diagnostic and stability tests confirm the reliability and robustness of the model. The findings highlight the importance of not only increasing public health spending but also improving the efficiency and composition of health expenditure to promote sustained economic growth in Haryana. The study offers valuable policy insights for strengthening health financing and governance at the state level.