Author: Kavya Goyal, Prestige Institute Of Management


India has a population of 1.3 billion which is the second-largest population of the world. It has been predicted by the UN that India will have the world’s largest population by the year 2024. India has earned the reputation of being one of the fastest-growing economies during the two decades, it is the world’s fifth-largest economy by nominal GDP and third-largest by purchasing power parity. However, the country has to face the challenges with several issues which include maintaining good health. it spends 1.2 % of its GDP on Healthcare sector which is lowest in the world. In the 12th Five Year Plan, the government has increased the spending on health care. And in February 2020, Finance Minister announced certain reform on healthcare which includes an increase in expenditure on the health care services. After that Health Minister; Dr. Harsh Vardhan has also accounted to increase the public expenditure from 1.15% to 2.5% of GDP BY 2025.


Health system is the combination of resources, organization, finance and management culminates in the delivery of health services to the population. The definition of Health Sector Reforms is given by WHO I.e., it is a sustained process of fundamental changes in policy and institutional arrangements guided by government and designed to improve the functioning and performance of health sector and ultimately the health status of the population. The Healthcare system in India is very poor as the government spend only 1.2 % of its GDP on healthcare services, it leads to inflation as the private sector provides health service  in  the  high  cost,  in  result  patients  do  not  have  sufficient  money  to  afford medical treatment in private hospitals and if they anyhow hospitalized, it pushes them into lifelong debts or below the poverty line. Public spending on medical treatment, Public Health and Family Welfare in India is much below than what is required. The gap between the actual and required spending is larger than the relatively low-income states. Some steps have been taken by the government to cure weak health services.

Health Status Of India:

The health status of India has the three most important features I.e. :

  1. Low level of public spending- The  amount  to  be  spent  on  the  health  services  are  low since the Republic of India. Priorly, it was 1℅ of the GDP of the country and the Public expenditure elasticity concerning GDP was 0.94%. Then it was increased to 1.2 per cent of GDP since 2009-10.
  2. Poor Health Status-India has recorded very  poor  quality  of  preventative  care  and  the poor health status of the population.
  3. High OOP-it is around four times higher than the public spending on health care. The inadequate level of Public Health provision has focused the population to seek Private Health Services resulting in high over OOP spending.

The constitution of India guarantees free Health Care services for its citizens, yet, the private Healthcare sector has been the primary source for most of the households in urban and rural areas of India. But most of the hospitals are run by the private sector and the government doctors run their private clinics. Those people who go to the public sector  hospitals,  because  they  can’t  afford  to  pay  the  high  charges  in  the  private hospitals, remain untreated because of lack of facilities and experienced doctors.

New Health Care Reforms:

Health  Minister;  Dr.  Harsh  Vardhan  has  announced  to  increase  public  Healthcare spending from existing 1.15 % of GDP to 2.5 % by 2025 in September 2020. He also stated  that  because  of  the  present  pandemic,  the  15th  Finance  Commission  has concurred that healthcare spending must be raised in the next five years.

Before him, the Finance Minister; Nirmala Sitharaman has announced in February 2020 about Rs. 69000 crores for the health sector in the 2020-21 Budget with 6400 crores for Centre’s flagship health insurance scheme I.e. Prime Minister Jan Arogya Yojana. She also stated that there will be an increase in Investments in grass-root health institutions. There will implementation of National Digital Health Blueprint. One of the major focus will  create  different  blocks  in  all  the  district  hospitals  for  infectious  diseases.  Also, strengthening of public health labs and surveillance network of the country.


Now the government is taking measures to improve the conditions of healthcare management in the country. To implement all these schemes will take a lot of efforts and it also requires a high budget. The government need to focus on other healthcare professionals like physicians from Ayurveda, Siddha, Homoeopathy and Unani background and nurses but also need to emphasis that the quality of healthcare services shall not be compromised. The government and the private sector both together have to improvise the healthcare sector of our country as it is the biggest need of today’s time.



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