NATIONAL LAW INSTITUTE UNIVERSITY,

BHOPAL

ECONOMICS – I

TOPIC: AYUSHMAN BHARAT AND ITS

IMPLICATIONS ON PPC

SUBMITTED TO: Prof. Rajesh Gautam

SUBMITTED BY: Rounak Doshi
(2019BALLB90)
ACKNOWLEDGMENT
This project has been made possible by the unconditional support of many people. I would like to
acknowledge and extend my heartfelt gratitude to Prof. Rajesh Gautam who helped me throughout the
development of this project into a coherent whole by providing helpful insights and sharing his brilliant
expertise. I would also like to thank the officials of Gyan Mandir, NLIU for helping me in finding the
appropriate research material for this study. I would also like to extend my gratitude towards University’s
authority. I would also like to thank my friends and family who helped me in successful completion of this
project.

: Rounak Doshi
(2019BALLB90)
TABLE OF CONTENTS
 INTRODUCTION
 STATEMENT OF PROBLEM
 HYPOTHESIS
 RESEARCH OBJECTIVES
 LITERATURE REVIEW
 METHOD OF STUDY
 AYUSHMAN BHARAT YOJANA
 National Health Protection Scheme
 Health and Wellness Centres
 Progress and Statistics
 Outreach
 PRODUCTION POSSIBILITY CURVE
 Assumptions of PPC
 Characteristics of PPC
 Rotation of PPC
 HEALTH and ECONOMY
 EFFECT of HEALTHCARE SCHEME on PPC
 LEGAL IMPLICATIONS
 OBAMACARE
 AYUSHMAN BHARAT VS OBAMACARE
 CONCLUSION and SUGGESTIONS
 BIBLIOGRAPHY
INTRODUCTION
Economics is derived from the Greek word ‘oikos nomos’. If we split this term into two parts (oikos-
Household, nomos- Management), then we can derive all the economics comprises and we may also
understand the whole phenomena of this.

Economy is the system that provides livelihood to the people of a country, so basically it is the sum total of
all the sectors of an economy.

Ayushman Bharat or Pradhan Mantri Jan Arogya Yojana1 is a healthcare scheme launched by the
government of India on 23rd September 2018. It is initiated under the Ministry of Health and Family Welfare.
It aims at making interventions in primary, secondary and tertiary health care systems, covering both
preventive and promotive health, to address healthcare integrally. This scheme was launched by the
government of India for the purpose of providing better healthcare facilities to the people of the country.

Production Possibility Curve (PPC) is a graphical representation that shows the different possibilities of two
goods that can be produced with the given resources and technology available in a given period of time.

PPC can be shifted in leftward and rightward direction both. Leftward shift is caused due to underutilisation
of resources and rightward shift takes place due to growth of resources i.e. adoption of technology and
“better health” of the work force of a country.

The scheme of ‘Ayushman Bharat” has its implications on the Production Possibility Curve. As the better
healthcare facilities are provided, it leads to improvement in capability and ability of the work force, which
further leads to increase in production and thus a rightward shift in PPC. PPC will be projecting out curve,
since more versatility, in courses of administrators and support available, for several other designs will allow
various options for source utilization. Also, in a country like India, human resource is the most
comprehensive resource and thus advancement in human resource will always show a positive impact on the
economy.

The core team of Ayushman Bharat consists of Prime Minister Mr. Narendra Modi as an Advisor, Mr. Indu
Bhushan as the CEO and Dr. Dinesh Arora as the Deputy CEO.

1
https://mera.pmjay.gov.in/search/login
STATEMENT OF PROBLEM
The main focus of the project is on understanding the concept of Ayushman Bharat Yojana and Production
Possibility Curve and thus relating them together. Further, focus would be on showing the effect of
Healthcare Facilities on PPC.

HYPOTHESIS
Health and Economics are not mutually exclusive. The quality of health always affects the economy of a
country and PPC of its economy. The standard of health per se has its own implications on the work force
which can further cause substantial change in the economic position of a country. The scheme of Ayushman
Bharat has implications on law as well.

RESEARCH OBEJECTIVES
 To understand the inclusiveness of health and economy.
 To interpret the scheme of Ayushman Bharat Yojana and thus relating it to economy.
 To comprehend the effect of Health on Economy.
 To analyse the developments in economy due to better healthcare facilities.

LITERATURE REVIEW
 Ayushman Bharat Yojana and Production Possibility Curve are referred by many scholars in their
respective literature. In making of this project, several books and sources were referred such as-
Microeconomics by Jeffrey M. Perloff, Introductory Economics by V.K. Ohri and T.R. Jain,
Principles of Microeconomics by N. Gregory Mankiw, The Hindu: Newspaper.
 According to the texts stated above, PPC shows the probabilities of two goods which can be
produced with the given resources and technology available at a particular period of time. Texts say
that health has its effects on Economy and law has effect on health.

METHOD of STUDY
Doctrinal Method of research is used while making this project.

AYUSHMAN BHARAT YOJANA

Pradhan Mantri Jan Arogya Yojana (PMJAY) or National Health Protection Scheme (NHPS) or Ayushman
Bharat Yojana is a scheme launched with the collaboration of centre and state. The scheme aims at providing
healthcare facilities to the needy people who can’t afford the medical expenses in this modern world of
capitalisation and globalisation.

The scheme is devised by integrating multiple schemes including Senior citizen health Insurance Scheme
(SCHIS), Rashtriya Swasthya Bima Yojana, Employees' State Insurance Scheme (ESIS), Central
Government Health Scheme (CGHS).

The Central Government Health Scheme (CGHS) was begun under the Indian Ministry of Health and Family
Welfare in 1954 with the goal of giving extensive therapeutic consideration offices to Central Government
representatives, beneficiaries and their wards dwelling in CGHS secured urban communities.

The programme directs at making intercessions in primary, secondary and tertiary medical care systems. It is
a composition of two major health initiatives namely, Health and Wellness centres and National Health
Protection Scheme (NHPS).

National Healthcare Protection Scheme

 It will cover over 10 crore poor and vulnerable families (approx. 50 crore beneficiaries) providing
coverage up to Rs. 5 lakh per family per year for secondary and tertiary care hospitalization.
 Benefits of the scheme are available across the country and a recipient covered under the scheme will
be allowed to take cashless benefits from any public or private empanelled hospital across the country.
 It will be a qualification put together plan with privilege chose with respect to the premise of
hardship criteria in the SECC database. It will focus about 10.74 crore poor denied provincial families
and distinguished word related classification of urban laborers' families according to the most recent
Socio-Economic Caste Census (SECC) information covering both country and urban.
 One of the center standards of Ayushman Bharat - National Health Protection Mission is to give co-
usable federalism and adaptability to states.
 For giving strategy headings and cultivating coordination among Center and States, it is proposed to
set up Ayushman Bharat National Health Protection Mission Council (AB-NHPMC) at pinnacle level
Chaired by Union Health and Family Welfare Minister. States would need State Health Agency (SHA)
to execute the plan.2

Health and Wellness Centres

2
https://economictimes.indiatimes.com/hindi/wealth/personal-finance/ayushman-bharat-free-health-insurance-important-
facts/articleshow/65435087.cms?from=mdr
Rs 1200 crore are assigned for 1.5 lakh wellbeing and health centres, Under this 1.5 lakh, focus will be on
arrangement to give far reaching wellbeing care, including to non-transmittable illnesses and maternal and
kid wellbeing administrations, aside from free fundamental medications and indicative services. The
legislature will overhaul existing Public Health Centres to Wellness Centres. The welfare plan has been
taken off on August 15, 2018. Further, Contribution of private part through Corporate Social Responsibility
(CSR) and altruistic establishments in receiving these focuses is additionally envisaged. The rundown of
Services to be given at Health and Wellness Centre include:

 Pregnancy care and maternal health services

 Neonatal and infant health services
 Child health
 Chronic communicable diseases
 Non-communicable diseases
 Management of mental illness
 Dental care
 Geriatric care emergency medicine.3

Progress and Statistics

25 States and all Union territories acknowledged the plan with the exception of four states: Delhi, Odisha,
West Bengal and Telangana. More than 10 lakh individuals have taken advantage of the plan till May 2019.
By 26th March 2019, in excess of 825,000 e-cards had been produced and there was a push to enroll
progressively private emergency clinics to the plan. Cygnus Sonia Hospital in Nangloi, Dr. Shroff's Charity
Eye Hospital and Cygnus MLS Super-Speciality Hospital were the first three private hospitals to join the
scheme. "In the first 100 days, 6.85 lakh patients have been provided hospital treatment. 5.1 lakh claims
have availed of the scheme, for which payment has been released. This averages 5,000 claims per day for the
first 100 days. Over 50 crore people for secondary and tertiary care hospitalisation has been benefited
through a network of 16,000 government as well as private hospitals. 62.58% of the Indian population has to
foot their own healthcare bills and most find it unaffordable, which is where the cashless and paperless
scheme hopes to step in.

Outreach
3
https://www.pmjay.gov.in/
The government planned a lot of things to provide this facility to maximum people. Ayushman Bharat
Scheme has its own Website, Contact Number and a Mobile Application.

Website: https://www.pmjay.gov.in/
Contact Number: 14555/1800 111 5654

Mobile Application: Ayushman Bharat (PM-JAY)

PRODUCTION POSSIBILITY CURVE

4
https://www.pmjay.gov.in/
Production Possibility Frontier or Transformation Curve or Production Possibility Curve (PPC) is a
graphical portrayal of the potential outcomes of two merchandise that can be created with the innovation and
assets accessible in a specific timeframe.

Here, the red line in the graphical representation reflects the maximum utilization of resources.

Now, if any point i.e. Q lies outside this curve then it is called Growth of Resources that takes place due to
adoption of new technology along with good health of the work force and if any point i.e. P lies inside the
curve then it is called Under-utilisation of resources which takes place due to any natural calamity or poor
health condition of the work force. Point R represents the maximum utilization of resources.

Production Possibility Curve

Assumptions of PPC

 Country should produce only two goods.

 Ceteris Paribus (other things remain constant) must be there.
  There should be some scarcity of resources.

Characteristics of PPC

 PPC falls in downward slope.

 PPC is Concave in shape. It is so because of rise in Marginal Opportunity Cost (MOC). MOC is
rising because we have limited resources, also our production technology degrades with time, thus
production of every next unit of a commodity will cost more to the producer, hence we sacrifice at an
increasing rate which further leads to rise in MOC.

Rotation of PPC

Rotation in PPC takes place when there is a change only in the production of one good. Suppose, there are
two goods A & B, then following rotation will take place:

 In graph on the left side, upward rotation reflects an increase in production and downward
rotation reflects a decrease in production.
 In graph on the right side, rightward rotation reflects an increase in production and leftward
rotation reflects a decrease in production.

HEALTH and ECONOMY

Health, as defined by the World Health Organization (WHO), is "a state of complete physical, mental and
social well-being and not merely the absence of disease or infirmity”5. Health might be characterized as the
capacity to adjust and oversee physical, mental and social difficulties all through life.

The role of health in economic development is analysed via two channels: the direct labour productivity
effect and the indirect incentive effect. The labour productivity theory asserts that individuals who are
healthier have higher returns to labour input. The incentive effect is borne of the theoretical literature, and
individuals who are healthier and have a greater life expectancy will have the incentive to invest in education
which can further give better returns in future. Education is the driver of economic growth, and thus health
plays an indirect role. Representing the synchronous assurance of the key factors development, training,
fruitfulness results demonstrate that the backhanded impact of wellbeing is certain and noteworthy.

As stated earlier, PPC is affected by the health of the work force. So, we need to understand the meaning of
work force. Work Force is defined as the people who are willing to work and are actually working and
contributing to the economy.

Now, as the health of an individual improves, so he/she can serve the economy in a more better way, his/her
productivity automatically increases and thus leads to a rightward shift in PPF.

Even, economy also affects the health. Country with a better economy has more resources as compared to a
country with degraded economy, thus it can apply more resources on healthcare facilities of the country.
With more resources on medical facilities, a country can produce and purchase more advanced medical
technology which results in improvement in the health of the people.

So, both economy and health are not mutually exclusive and per se an indispensable part of each other.

EFFECT of HEALTHCARE SCHEME on PPC

The programme of Ayushman Bharat was launched with an objective of providing medical facilities to the
needy people of the country. The sponsorship of the scheme is shared by the Centre and State in a ratio of
5
https://www.who.int/
3:26. Due to this scheme, many under privileged people are dispensed with quality healthcare facilities. This
improvement in health of the work force causes increase in production and improvement in efficiency. Thus,
it causes a right ward shift in Production Possibility Curve (PPC).

So, we can say that strategy of Ayushman Bharat has a positive effect on PPC and our economy. But, if the
policy is misused then it can cause very big harm to our economy because government is applying a lot of
resources on this policy and if the fund is not provided to the right people then it can lead to waste of
resources and degradation of health which will cause a leftward shift on PPF.

Here, goods A and B are taken to show an example:

Rightward Shift Leftward Shift

LEGAL IMPLICATIONS
Public health law focuses on the nexus between law, public health and the legal tools applicable to public
health issues. Though there have been consistent interventions to address public health concerns in the past,
there exists a need for a contemporary framework to appropriately use modern legal tools for complex health

6
https://www.pmjay.gov.in/
challenges. We identify a checklist of imperative indicators to assess whether public health legislations
would be an effective form of intervention to bring about the desired social change.7

Under the Union Budget 2019 Rs 64,559 crores has been allotted to the ministry of health and family
welfare, which contributes to 2.32 per cent of the total budget and 0.34 per cent of the country’s GDP.

Under the ministry of health and family welfare, allocation of budget is made for two separate departments.
One department directly focuses on enhancing health and family welfare and another focuses on health
research. Of the total amount, Rs 62,659 crore have been allocated for health and family welfare department,
whereas Rs 1,900 crore have been set aside for research.

About half of the amount allocated will be spent on National Health Mission (NHM) with about Rs 32,995
crore, which is Rs 2,312 crore more than the year 2018-19 (revised estimates). Of this overall amount, Rs
27,039 crore will be spent on Rural Health Mission, and Urban Health Mission will get Rs 950 crore. The
remaining amount allocated under National Health Mission will be spend on tertiary care programs and for
enhancing health and medical education.

The Pradhan Mantri Jan Arogya Yojana (PMJAY) will receive Rs 6,400 crore as compared to Rs 2400 crore
in 2018-19 budget. This amount will be utilized in providing free medical services to the needy people.

OBAMACARE
National Health Protection Scheme or Ayushman Bharat Yojana is an idea which is somewhere borrowed
from the USA’s medical scheme known as ‘Obamacare’. The scheme is known as Patient Protection and

7
https://www.researchgate.net/publication/41396440_Public_health_law_in_India_A_framework_for_its_application_as_a_tool
_for_social_change
Affordable Care Act (ACA) enacted by the 111th United States Congress. It is also known as Affordable
Care Act, Health Insurance Reform, Healthcare Reform.8

The ACA incorporates arrangements to produce results from 2010 to 2020, albeit most produced results on
January 1, 2014. It changed the Public Health Service Act of 1944 and embedded new arrangements on
reasonable consideration into Title 42 of the United States Code. Few zones of the US social insurance
framework were left immaculate, making it the most clearing human services change since the order of
Medicare and Medicaid in 1965.

Under Obamacare, it is compulsory for every American citizen to buy health insurance program. The
government will subsidize the premiums for those who cannot afford to pay. 

Later on in 2017, US President Donald Trump’s government came up with the idea of American Healthcare
Act,2017 but the bill, which was passed by the United States House of Representatives, was not by
the United States Senate. If it had been passed then it would have partially repealed the Patient Protection
and Affordable Care Act (ACA).

AYUSHMAN BHARAT v/s OBAMACARE

Ayushman Bharat is being touted as the biggest social insurance plot on the planet. The plan intended to give
need-based human services advantages to those living beneath the neediness line. The plan is stand-out in
8
https://www.thehindu.com/opinion/op-ed/falling-short-on-most-counts/article25229975.ece
both degree and desire. Thinking about its size and extension, Ayushman Bharat, conversationally known as
Modicare, has been contrasted with the Affordable Care Act otherwise called Obamacare. The Patient
Protection and Affordable Care Act, was propelled by previous US president Barack Obama in 2010. Given
the fundamental goal of both the projects is to give complete human services advantages to the individuals
who couldn't bear the cost of it, a correlation between the two is justified insofar to the degree they prevail
with regards to meeting the desires and satisfying the expressed destinations.

Scheme
Both the two plans expect to give human services to low pay bunch families and people through protection
strategy. Under Obamacare, it is mandatory for each American native to purchase medical coverage
program. The administration will finance the premiums for the individuals who can't bear to pay. Then
again, Modicare is totally free. The recipient families don't have to enroll in light of the fact that they will be
recognized from Socio-financial and Caste Census (SECC), 2011 information9.

Individual Mandate
Obamacare has made it obligatory for everybody to settle on medical coverage plot. There was an
arrangement for punishment in the event that one doesn't choose the program. This arrangement made
venture return proportion for youthful white collar class sound Americans low since they needed to pay a
great deal for protection while advantages to them were least. The Trump organization later revoked this
segment. Presently, youthful sound working class has begun to haul out of the plan. Then again, Modicare
has no such impulses and full premium is being paid by the administration in this manner the low salary
families would not need to endure the increasing expense of premiums.10

Benefits

The advantage of Modicare is constrained to a protection front of Rs 5 lakh on auxiliary and tertiary
treatment while Obamacare has no such breaking points. Under Obamacare, patients won't need to pay a
solitary additional penny to the clinic paying little mind to the expense of the treatment.

Beneficiaries
Regarding number of recipients, Modicare turns out as an unmistakable victor. The quantity of individuals
secured under Obamacare till 2016 is 2.40 crore11 while Modicare expects to give Rs 5 lakh medical

9
https://secc.gov.in/
10
https://tfipost.com/2018/10/modicare-obamacare-02/
11
https://rightlog.in
coverage spread to 50 crore individuals, which is about 40 percent of the number of inhabitants in the nation.
Obamacare is a general plan while Modicare is constrained to 10 crore families. In any case, in the event that
we pass by the quantity of recipients, at that point Modicare far surpasses Obamacare. According to the
administration sources, Modicare will likewise be universalized to right around 25 crore families inside the
following couple of years.

Cost

The taxpayers’ money spent on Obamacare is far more than the amount spent on Modicare. According
to Congressional Budget Office, Obamacare will cost 1760 billion dollars in the next ten years while
Modicare will cost 1.7 billion per year. The welfare programs are funded through taxpayer’s money and if
the US government is spending this much on healthcare then other expenditures will definitely be curtailed.

Federal Cooperation

In India almost all states and union territories, except Delhi, Kerala, Odisha and Telangana have opted for
Modicare while majority of the states in America have not opted for expansion of Obamacare. Therefore, on
one hand Modicare is one of the finest examples of federal cooperation while Obamacare increased the rift
along Red and Blue lines. American states are divided along partisan lines in the implementation of
Obamacare while Modicare further strengthened the Indian Union.

CONCLUSION and SUGGESTIONS

The conclusion that can be drawn after all the study of the project is that our hypothesis was correct. After
the proper analysis of the topic, we can conclude that health and economy are not mutually exclusive.
We can deduce that health of the work force substantially affects the economy of a country and also affects
the PPC. The standard of health also affects the monitory position of an individual as well. After applying
the doctrinal method of study, this can be easily deduced that Production Possibility Curve is immensely
affected by the Healthcare Facilities available in a country.

Ayushman Bharat Scheme has helped in improving the medical facilities available in our country by
providing financial aid to the under privileged people in times of medical need.

Thus, we can conclude that our presupposition was totally correct.

I would like to suggest that government should use this policy in a long run and should try to enhance its
features. Also, I would suggest that all those states which are not a part of the scheme must also join it.
Central government came up with this scheme for improving health of the people which would help in
development of economy. Both Central Government and State governments must keep the politics aside and
should work together.

BIBLIOGRAPHY
BOOKS

 Microeconomics by Jeffrey M. Perloff

  Introductory Economics by V.K. Ohri and T.R. Jain
 Principles of Microeconomics by N. Gregory Mankiw

NEWSPAPERS

 The HINDU
 The Times of India
 Naidunia
 Dainik Bhaskar

WEBSITES

 https://www.brainly.in
 https://www.rightlog.in
 https://www.pmjay.gov.in
 https://www.mera.pmjay.gov.in
 https://economictimes.indiatimes.com
 https://www.wikipedia.org
 https://www.jagran.com
 https://www.businesstoday.in
 https://www.indiamoney.com
 https://www.thehindu.com
 https://www.news18.com
 https://www.investopedia.com
 https://www.thebalance.com