Analysis of Health Spending on Indian Economic Growth Using Vector Error Correction Method

Health is an important factor in determining economic development as a healthy population leads to an increase in productivity. Poor health and short life expectancy cause a 50% difference in economic development between developing and industrialized countries. The purpose of this paper is to examine the relationship between health-related investment and Gross Domestic Product (GDP) growth. Investment in health can develop better health opportunities to strengthen human capital to increase productivity and nourish the economic performance of the country. To examine the connection between the GDP and investment in health, a vector error correction model has been employed. The study is based on secondary data where investment in health is an independent variable and the dependent variable is the GDP from 2000 to 2020 in India. According to the findings, the total impact of health spending has no discernible impact on GDP growth over the long or short term.