By Varshith SV
India’s healthcare industry, currently valued at approximately $372 billion, is projected to grow to nearly double to over $638 billion by 2030, driven by advancements in medical technology, increased public awareness, and government initiatives like Ayushman Bharat.
Yet, the country faces a daunting challenge: bridging the gap between its potential and the reality of fluctuating healthcare funding. Despite an 11 per cent average annual increase in expenditure by the Department of Health and Family Welfare from 2012-13 to 2022-23, its share of the Union Government's overall spending remains stagnant, persistently hovering below 2.5 per cent.
The National Health Policy of 2017 envisioned government health expenditure reaching 2.5 per cent of GDP, but the reality has been sobering - estimated at just 1.4 per cent in 2019-20. This gap between aspiration and allocation underscores the hurdles in realising India's healthcare potential. While allocations like Rs 90,659 crore in 2024-25 signify a 13 per cent rise, the numbers still fall short of the sector's monumental needs.
Implications of Budget Constraints
Healthcare infrastructure in India paints a stark picture of inequality and inadequacy. With just 0.6 hospital beds per 1,000 persons against the recommended two, rural and underserved areas remain critically underserved. These disparities impact not only access to care but also the quality of outcomes, often leaving patients vulnerable to delayed or substandard treatment. For instance, many Primary Health Centres (PHCs) lack the basic infrastructure or skilled workforce to function effectively, let alone address complex health challenges.
"Fluctuating and low budget allocations challenge the maintenance of robust healthcare services, especially in rural areas, a balanced and sustained financial strategy is critical for equitable access and better health outcomes," highlighted Reny Varghese, COO, Zynova Shalby Hospital, Mumbai.
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Despite an 11 per cent average annual increase in expenditure by the Department of Health and Family Welfare from 2012-13 to 2022-23, its share of the Union Government's overall spending remains stagnant, persistently hovering below 2.5 per cent.
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Strategies for Bridging the Gaps
Addressing these systemic challenges demands a multi-pronged approach. Public-Private Partnerships (PPPs) can play a pivotal role in augmenting infrastructure and expertise. Encouraging private equity investments can infuse much-needed capital into underfunded segments, while leveraging technology - such as telemedicine and AI-driven diagnostics - can enhance efficiency and reduce costs.
"Digital tools and targeted investments can help streamline healthcare delivery, while long-term financial planning, combined with technology-driven solutions, can mitigate the impact of fluctuating allocations," stated Varghese.
Furthermore, prioritising preventive care and emergency preparedness can minimise long-term costs and improve health indicators. A data-driven approach to fund allocation ensures optimal utilisation of resources where they are most needed.
The Way Forward
To achieve its 2030 healthcare goals and position itself as a global leader, India must prioritize sustained and impactful healthcare funding. Recommendations include a consistent rise in the health budget to at least 2.5 per cent of GDP, incentivizing state-level investments, and fostering innovation through public and private collaboration.
The upcoming Union Budget presents a critical opportunity to address these gaps. By ensuring adequate and stable funding, India can build a robust healthcare ecosystem capable of delivering equitable and high-quality care, ultimately contributing to the nation’s economic growth and well-being.
As the industry pins its hopes on the next fiscal allocation, one thing is clear: a healthy nation is the foundation for a thriving economy.
