Non-communicable Diseases and Their Macroeconomic Impact in India

Non-communicable diseases now account for two-thirds of the total mortality in India and are projected to account for an estimated 75% of the total mortality by 2030. Cardiovascular diseases, cancer, respiratory diseases, and diabetes are the country’s leading causes of death. Taken as a whole, NCDs have a sizeable economic effect at the household, local, and national levels. Using a macroeconomic model, this study estimates that in the years between 2015 and 2030, NCDs will result in macroeconomic costs that total $3,158 per capita, equivalent to a 7% annual tax on the country’s gross domestic product. It also discusses the expected effects of the Covid-19 pandemic on the NCD burden and its macroeconomic impact.

Non-communicable diseases (NCDs) currently account for a dominant share of morbidity and mortality in India. This disease burden impedes economic growth by reducing labour supply, decreasing productivity and income, and diminishing savings and investment (as a result of both reduced earnings and higher medical expenditure). In this paper, we estimate India’s potential macroeconomic losses due to NCDs from 2015 to 2030 using a model that incorporates labour, human capital, and the effects of spending on treating NCDs into a human capital-augmented production function.