While the Cambridge researchers accept that "wealthier is healthier" generally, they found that even poor districts enjoy relatively good public health if they have a high literacy rate.
Literacy enables populations to understand medicine labeling, access healthcare and engage with public health programs and services.
Researchers analyzed data on income, education, and under-five and infant mortality across roughly 500 districts in India's major states, accounting for 95 percent of the total population.
Models estimate that for the typical Indian district in the early 2000s, the poverty gap would have had to be reduced by 25 percent to save one child per thousand live births, whereas a mere 4 percent increase in the literacy rate would have had the same effect.
At the state level, researchers found, literacy is the only significant predictor of public health -- even poverty gap is not a reliable predictor.
"Economic policies narrowly focused on growth are insufficient when it comes to public health in less developed countries," said Lawrence King, Professor of Sociology and Political Economy and co-author of the study, published in the journal Social Science and Medicine.
"Higher average income is a statistical red herring: it contributes to better public health mainly to the extent that it reflects high literacy and low poverty."
The researchers also found that although income inequality does not affect under-five and infant mortality rates in India, it does increase self-reported ailment, especially among women.
"Even if inequality does not lead to more children dying in India, it may generate individual stress and fray social bonds enough to undermine societal well-being."
Researchers believe the results support a "pro-poor position," meaning a focus on the most deprived in terms of income and literacy may be more effective than improving average income through general growth policies.
"Standard policy prescriptions need revision," King said. "First, non-income goods like literacy may make an important contribution to public health. Second, alleviating poverty may be more effective than raising average income levels."