India is a complicated democracy and its digital divide separates the rich from the poor. A recent rise in the gap between these two groups is becoming more and more obvious as multinational firms try to tap into the new wealth created by an emerging middle class.

With so many issues unaddressed about poverty and the lack of opportunities for the poor, poverty in India has made a drastic turn by taking a closer look at healthcare. The working model for this experiment was the state of Rajasthan, a state that has been consistently showing less growth than others in India for the last seven years.

In a remarkable show of sticking to policy guidelines, the state’s poverty declined a whopping 20% in the same period. Even more surprisingly, poverty levels have dropped a full 10 percentage points from 2009-10 to 2011-12.

One analyst has referred to the drastic turnaround in the state as a "paradox of poverty," The Business Standard reports.

When economists compared poverty initiatives between Rajasthan and other countries, the differentiating factor was a sizeable reduction of medical costs, said Samit Sharma, Rajasthan Medical Services Corporation (RMSC) managing director. The state’s medical programme translates into drugs and basic diagnostic tests offered free of charge for local residents.

Sharma explained that approximately 2.1 million people in the state would go “below the poverty line” (BPL) due to skyrocketing medical costs: "Healthcare is the second most important cause for rural indebtedness. Twenty-four per cent of all (in-patients) get pushed below the poverty line because of debt incurred in order to meet the treatment expenses. And 40 per cent of all patients borrow money to meet hospitalisation expenses."

With no nationalised insurance plans, and no help from employers who hire manual labour on daily wages, the poor in India have to fend for themselves. Often, communities or local organizations pool their money, which is used for hospital expenses and other emergencies.

The free healthcare approach in this state solves two problems affecting those in poverty. The primary goal of the programme is to provide healthcare services to those who cannot afford it. And the ensuing benefit is that they are not overburdened with medical costs that pull them down into poverty. The figures show that more people are “above the poverty line” (APL). So that means Rajasthan has done its job of using healthcare to decrease poverty in the state.

According to a source close to the story, "Rajasthan may not have big growth numbers to show, may not have attracted mega investment proposal, and it is not a state whose development model is studied and talked about. But by doing the basics right, the state has brought the cost of living down, making it easier for people to live a decent life here," reports The Business Standard.