ECONOMIC GROWTH, PUBLIC HEALTH EXPENDITURE AND AIR POLLUTION: A PANEL ANALYSIS OF INDIAN STATES

This study investigates the relationship between fine particulate matter (PM2.5) air pollution and economic growth and labour productivity in India. Over the past decade, India has experienced rapid economic growth and wide-scale urbanization alongside a deterioration in air quality. Rising pollution levels may negatively affect the health of the workforce, consequently reducing the overall output and productivity of industries. Rise in illness incidences puts strain on the healthcare system, therefore prompting an increase in healthcare expenditure. Using state-level data from 2014 to 2024, this paper examines the relationship between PM2.5 concentration and economic indicators, including Net State Domestic Product (NSDP) and the Index of Industrial Production (IIP). Using these economic indicators as proxies for industrial and state-level activity, this study aims to establish if higher pollution levels can be associated with slower or negative economic growth.