The Economic Survey tabled by Finance Minister Nirmala Sitharaman in Parliament on Friday revealed that health expenditure in India surged to $61 billion in FY25. This growth, at a compound annual growth rate (CAGR) of 18%, marks a significant increase from $32 billion in FY21.
“Health is a crucial component of human capital and a valuable asset for a prosperous and stable economy. It boosts productivity, reduces healthcare needs, enhances life expectancy, and supports social development,” stated the Economic Survey.
The Survey emphasized the importance of health as India emerges as an economic powerhouse driven by its youthful population. Government initiatives, including preventive measures, universal access to high-quality healthcare, strengthened public health infrastructure, and advancements in medical education, have collectively contributed to making healthcare in India more accessible and affordable for all.
Citing the latest National Health Accounts, the Survey showed that Total Health Expenditure (THE) has been on an upward trend since FY19. In FY22, THE was estimated to be $90.4 billion (3.8% of GDP and $66.02 per capita at current prices). The share of capital expenditure in THE increased from 6.3% in FY16 to 12.7% in FY22, signaling broader and better health infrastructure.
The Survey noted that increased government spending on health has significant implications for reducing financial hardship endured by households. Between FY15 and FY22, the share of Government Health Expenditures (GHE) rose from 29.0% to 48.0%. Notably, the share of out-of-pocket expenditure (OOPE) declined from 62.6% to 39.4% during the same period.
These developments underscore the government’s commitment to improving healthcare access and affordability, positioning India for a healthier and more prosperous future.
