India's Healthcare Expenditure Less than GDP, Needs to be Increased, Says Ex RBI Gov

India’s healthcare sector is witnessing a remarkable transformation, with government spending reaching a historic 2.1% of GDP in FY23, up from 2.2% in FY22 and just 1.6% in FY21. This surge in expenditure underscores the nation’s commitment to public healthcare and universal health coverage, but what does it mean for the average Indian?  

The numbers tell a compelling story. Government health expenditure (GHE) has climbed steadily, from 1.2% of GDP in FY14 to 1.84% in FY21-22. Meanwhile, total health expenditure (THE) in 2020-21 hit a staggering ₹7,39,327 crore, equating to 3.73% of GDP and a per capita spend of ₹5,436. Most importantly for households, out-of-pocket expenditure (OOPE)—the share of healthcare costs paid directly by individuals—has dropped dramatically, from 64.2% in FY14 to 47.1% in FY20. This reduction signals significant financial relief for millions of families.  

Primary healthcare is also gaining momentum, with its share in total healthcare expenditure increasing from 51.1% in FY14 to 55.2% in FY19. The government’s emphasis on grassroots healthcare services, driven by the National Health Policy, 2017, is reshaping how Indians access medical care. By prioritising preventive and promotive care, the policy reduces dependency on expensive secondary and tertiary treatments.  

This revolution in healthcare has been bolstered by initiatives like the National Health Account (NHA) estimates, which provide a detailed picture of spending patterns, and social health insurance schemes that cover millions of Indians. Increased budget allocations further highlight the government’s intent to make quality healthcare more accessible.  

But here’s the catch: despite these strides, India’s healthcare spending still lags behind global benchmarks. To truly transform the system, experts argue for sustained investments in infrastructure, skilled healthcare workers, and technological advancements.  

The stakes are high. With growing demands and an ever-evolving healthcare landscape, India must continue to innovate and invest. The future of healthcare is here—but it’s up to the government, private sector, and citizens to ensure it’s a future where quality care is a right, not a privilege.