Towards a healthier, more equitable and innovative Indian healthcare sector

Rishabh Bindlish, MD & Partner, Co-leads Boston Consulting Group Healthcare practice in India and Ayushi Shukla, Senior Knowledge Analyst, BCG highlight that the government needs to pave the way for a healthier, more equitable future with strategic investments and policy reforms

- Rishabh Bindlish, Ayushi Shukla

In the past few years, the Indian government has strengthened its focus and allocation to healthcare. The Union Health Ministry received an allocation of about Rs 90,650 crores in the recent budget of 2024-25, a 12.5 per cent increase over 2023-24. Specific highlights of the budget for the sector include an increase in outlay for research and development and for the Ayushman BharatPradhan Mantri Jan Arogya Yojana (PM-JAY), the government's universal health coverage scheme, which saw a 10 per cent budget increase to Rs 7,300 crores. Other announcements include benefits for cancer patients and changes in custom duty for components of X-Ray machines to encourage local manufacturing and competitiveness.

There is, of course, more to be done to address the sector's urgent needs and reshape India's healthcare and pharma landscape.

Strengthen health infrastructure and reach

Currently, India's health expenditure stands at 2.1 per cent of GDP and it has to increase to at least 2.5 to 3 per cent of GDP. Higher expenditure would be pivotal to strengthening healthcare infrastructure, particularly in rural and underserved areas, and fulfilling the increasing demand on healthcare resources in the country amidst an ageing population, increasing disease burden and a growing incidence of NCDs and lifestyle diseases.