The Hindu Business Line : ‘Gujarat households spend 24% of annual income on health’

Ahmedabad, Sept. 12 An average Gujarati household spends 24 per cent of its annual income on health, according to a recent survey conducted by Max New York Life Insurance and National Council for Applied Economic Research (NCAER).

The surveyors developed an index for determining the level of financial preparedness against medical expenses or unforeseen medical emergencies. According to the survey, conducted across 23 States in the country, Gujarat stands fifth in the rankings with a health index of 0.70, slightly higher than national index score of 0.547, which means that many Indian households borrow to meet their health expenses.

The survey, released by the company’s officials here today, also found that for an average household income of around Rs 76,640, annual health expenses in Gujarat were Rs 18,486, or 24 per cent of the household income. The average household income in the country was Rs 62,114 and health expenses Rs 23,237, or 37 per cent.

The survey, titled ‘How Indians earn, spend and save’, highlighting the need for financial literacy in the country, found that, among the households in Gujarat facing major sickness in the recent past, 63.1 per cent of the people surveyed exhausted their own life savings and 22.8 per cent depended on loans from family and friends.

Overall percentage

Despite this, the overall percentage of households having insurance was found to be just 3.64 per cent.

Mr Debashis Sarkar, Senior Director and Chief Marketing Officer of Max New York Life, said the survey showed that Indians, whether urban or rural, poor or rich, primarily saved money out of their household income for emergencies, to educate children, to cater for old age and to buy a house. However, the instruments they choose to save are not appropriate.

The survey shows that 25.5 per cent of the households keep their savings at home and 57.5 per cent in bank deposits. Also, health expenses are clubbed with emergencies and are not addressed separately.

The survey covered 342 towns and almost 2,000 villages across 250 districts. The sample size included 63,016 households, equally divided between rural and urban areas.

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