The DOTS strategy has been demonstrated to overcome most of the short-comings of self-administered chemotherapy such as low cure rates, high relapse and fatality rates, drug resistance etc. There are several benefits from successful application of the DOTS strategy. The objective of this study was to estimate the direct economic benefits by the reduction in the prevalence of TB and deaths averted on account of DOTS. The methodology adopted has been the comparison of the two scenario “with DOTS” and “without DOTS” and deriving the benefits and calculating the discounted value of the contributions of the DOTS by applying the discount rates ranging from 5% to 16%. The estimates are generated by using the marginal productivity of labour and the deaths averted by DOTS among future workers in each age-sex-area category. The discounted value of the contributions of the future workers among the deaths averted in one year due to DOTS, the remaining years of their productive life are considered as the economic benefits of the deaths averted. The total benefits due to DOTS have been estimated as % of G.D.P. in 1993-94 and annualized benefits due to DOTS as % of G.D.P. The potential benefits are derived by using the most reliable 1993 estimates from survey of causes of deaths.

The potential benefits of successful DOTS in India are divided into two broad categories (I) Pure social welfare increasing effects of DOTS which do not generate direct tangible economic benefits. These would include reduced suffering of TB patients, quick and sure cure from the disease, lives saved, disability reduced for dependents and non-workers suffering from TB, the poverty alleviation, the psychic benefits of living in a more healthy way. (ii) Direct tangible economic benefits by improving the efficiency and productivity due to reduction in prevalence of disease and deaths and release of the hospital beds by averting hospitalization of TB patients.

The method of calculation is based on the estimates of population for the base year 1993-94 by age-sex-area as well as of the workers and sectors. Aggregative macro-economic studies and estimates of productivity differentials are used to calculate rural/urban, adult/child, young adult/old adult and male/female workers output gains. These are applied to two groups ‘with DOTS’ and ‘without DOTS’ and the benefits in the improvements likely to occur ‘with DOTS’ have been estimated.

The benefits are based on twin optimistic assumptions: a) DOTS will succeed in tackling pulmonary TB in India (b) DOTS will reach about 90% of TB patients with full instantaneous coverage. It is envisaged to implement DOTS in a phased manner over a few years. As per the findings of the analysis the potential economic benefits of DOTS to the Indian economy is estimated to be around 4% of GDP in real terms or US $ 8.3 billion during 1993-94. The economy gets a return of more than 16% per annum. Since the present value of all future costs attributable to DOTS is likely to be less than 4% of GDP, DOTS can effectively help step up India’s future economic growth. Phasing in of DOTS over time reduces value of the economic benefits. The longer the period of phasing, the lower is the discounted value of the benefits. Even with 10 years of phasing and 16% of discount rate all future benefits of DOTS turn out to be 2.1% of G.D.P. Projected incremental costs to the government for successful DOTS implementation throughout India are of the order of US $ 200 million per year, compared to the tangible economic benefits of at least US $ 750 million per year exceeding by several folds of the financial costs.