Impact of Health on Productivity Growth in India

Health is a very essential component of human development because healthy workers are more productive. Using the conventional growth accounting method the study first estimates the aggregate TFP growth for the Indian economy. It examines the impact of health on TFP growth for the Indian economy. It has been observed that TFP growth in India has been fluctuating in nature. Granger Causality tests show that there is a one way relationship between health as captured by life expectancy at birth and TFP growth for Indian economy. The regression analysis reveals that improvement of health condition as measured by life expectancy at birth in India affects TFP growth positively and significantly. Therefore, the study suggests that government should invest more to deliver better health care facilities which would further help in enhancing the productivity of the economy.