Health
Health Sector Overview in India
After gaining independence in 1947, India embraced the welfare state approach, reflecting global trends at the time. The nation’s leaders envisioned a robust national health system where the government would play a pivotal role in setting priorities, funding, and providing essential health services to the population. In 1943, the Bhore Committee was established by the Indian government to evaluate and suggest enhancements to the Indian Public Health System. By 1946, the committee highlighted the severe impact of malnutrition and preventable diseases on the nation’s human resources, noting that the economic and social losses were staggering. Unfortunately, this warning has largely gone unheeded by India’s leadership, as reflected in three critical issues: the persistently low investment in the health sector, with only about one percent of GDP allocated over the years; the rapid, unregulated growth of the private health sector; and the subsequent erosion of the government’s role in stewardship and governance. It wasn’t until the Alma Ata Declaration of the World Health Assembly in 1978, which aimed for “Health for All” by the year 2000, that a formal healthcare policy was introduced.
In recent years, India has often boasted about its healthcare achievements. However, a comprehensive international survey has revealed a contrasting reality. When compared to six other developed and developing countries, including the US, UK, China, Brazil, and Singapore, India’s healthcare system ranks poorly across most indicators. One of the most striking findings is that, despite having 10.8 lakh beds—the second-highest among the countries surveyed—there is still less than one bed per 1,000 people in India. This is in stark contrast to the UK’s bed-patient ratio of 3.9 beds per 1,000 people, surpassing the WHO’s recommended standard. Experts argue that India’s large population cannot be used as an excuse, particularly when considering that China, with a similar population, has 40.63 lakh beds and meets the WHO’s standards.
The National Human Rights Commission and Social Justice, established by a distinguished group of jurists and human rights activists under the leadership of Shri Ravinder Kumar, is committed to safeguarding civil, political, economic, social, and cultural rights across India. The organization is currently active in 10 states, driven by a team of young, dynamic, and dedicated activists.
Key Facts & Figures
India’s health policy and planning have been significantly shaped by the central government, particularly through the Ministry of Health and Family Welfare and various committee recommendations. The implementation of these policies follows a programmatic approach within India’s five-year plans. The central government is responsible for designing national health programs, while state governments are tasked with implementing them. However, there is a clear distinction between the responsibilities of central and state governments in providing health services.
State governments fully finance hospital services and primary healthcare facilities. On the other hand, family welfare programs are entirely funded by the central government, and national disease control programs are financed through a 50:50 cost-sharing arrangement. However, in practice, states often end up covering about 75 percent of the costs, including all administrative expenses, such as staff salaries. The central government contributes slightly over 40 percent of the total expenditure on medical education and research, leaving states to finance the majority of curative care services.
Private sector spending on healthcare in India is substantial, with the National Health Accounts matrix showing that 71 percent of the health budget is contributed by the private sector, and households alone account for 68.8 percent of this expenditure. Government policies have facilitated the growth of the private healthcare sector, particularly for curative services, by investing in medical education, offering subsidies, tax exemptions, and providing soft loans to establish hospitals. Despite lower public spending on healthcare, the government plays a crucial role in planning, regulating, and shaping the delivery of health services, which is essential for achieving equity and reducing health disparities. Over time, the public health system has expanded across the country, now comprising 137,311 subcenters, 22,842 Primary Health Centers (PHCs), 3,043 Community Health Centers (CHCs), 4,048 hospitals, and a workforce of 345,514 (as of 2001-02). The National Health Policy 2002 and the National Common Minimum Program (CMP) 2004 both emphasize the need to significantly increase public sector spending on health.
The Ministry of Health and Family Welfare also directly implements certain schemes, such as the Central Government Health Scheme (CGHS) and various national disease-control programs, in collaboration with state governments. A substantial portion of the Ministry’s budget is allocated as grants-in-aid to states for implementing these national health programs. Although the size of the central health budget has grown considerably, the proportion of the budget transferred to states has decreased from nearly 57 percent to 44 percent, indicating the central government’s increasing role in health service delivery.
To address the challenges of inequity, inequality, and budget deficits in the healthcare sector, the Indian government has introduced a mix of mandatory social health insurance, voluntary private health insurance, and community-based health insurance schemes. Social security for medical emergencies is not new to India; it has long been a tradition for villagers to pool resources to support households with sick patients. Modern health insurance in India was revamped in 1972 when the insurance industry was nationalized. The Insurance Regulatory and Development Act (IRDA) of 1999 further opened the market to private and foreign entrepreneurs. However, health insurance penetration remains low, with only about four to six percent of Indians covered under any form of health insurance. The commercial insurance market accounts for just two percent of total health expenditures, making it a relatively minor player in India’s healthcare ecosystem.
For the majority of Indians, public healthcare remains inaccessible due to distance, financial constraints, or a lack of confidence in the system. In developing countries like India, healthcare has often been a neglected issue, and addressing this will require significant policy and systemic changes.