Govt healthcare spending triples to ₹3.85 trillion in a decade

India's public spending on healthcare has nearly tripled over the past decade, driven by increased government investment as part of a sustained push toward universal health coverage.

Government healthcare expenditure rose to ₹3.85 trillion in 2022-23 from ₹1.30 trillion in 2013-14, according to the latest National Health Accounts (NHA) estimates released by the Union health ministry on Wednesday.

The NHA report showed that government health expenditure as a share of gross domestic product (GDP) increased from 1.15% in 2013-14 to 1.43% in 2022-23, underscoring increased public investment aimed at improving access to healthcare and reducing the out-of-pocket expenditure burden on individuals and families.

"Over the past 10 years, the efforts of the Union government, specifically during the Covid pandemic, were noteworthy. To manage the challenge posed by the Covid pandemic, the government rolled out the world's largest Covid vaccination programme. Also, the Union government implemented the Emergency Response and Health System Preparedness Packages (ERCP 1 and 2) to strengthen the public health system required to address the needs posed by the pandemic," a government official said on the condition of anonymity. "Given these additional spending by the government, government health expenditure as a percentage of GDP for 2021-22 was then calculated as 1.84% and proportionately the out-of-pocket expenditure (OOPE) reduced to 39.4% as a share of total health expenditure.”

The data highlights a sharp increase in the government’s role in financing healthcare. Government health expenditure as a share of total health expenditure rose from 28.6% in 2013-14 to 43.7% in 2022-23. This shift underscores the important role of public financing and signals that policy efforts are moving towards a more affordable, equitable, and accessible healthcare system for all, the report added.

For 2022-23, total health expenditure is estimated at ₹8.81 trillion (3.37% of GDP and ₹6,373 per capita). This includes all current and capital expenditures from public and private sources. Within government health expenditure ( ₹3.85 trillion), the Union government’s share is about 36.3%, while state governments contributed 63.7%, amounting to 4.89% of general government expenditure.

Public health experts said that despite falling out-of-pocket expenditure share falling, healthcare costs remain high.

"While the drop in out-of-pocket expenditure as a share of total spending is positive, absolute household costs remain considerable because overall healthcare expenses and inflation have surged over the decade," said Dr Rajeev Jayadevan, a public health expert.

"More critically, nearly 300 to 400 million working-class Indians—like drivers, gig workers, and shopkeepers—form a 'Missing Middle.' They are squeezed from both sides: they do not qualify for Ayushman Bharat poverty-line safety nets, yet they cannot afford skyrocketing commercial insurance premiums. For this massive segment, a single major medical emergency still threatens to become a catastrophic financial disaster despite the rising trends in public health funding,” Dr. Jayadevan said.

"Government health expenditure (GHE) is heading towards National Health Policy (NHP) 2017 goals. National Health Accounts is a time-series data estimated annually on the actual expenditure made by the government, private and all other sources on health. The latest NHA estimates report of 2022-23 is the 10th in the series commencing from 2013-14. The NHA provides a robust framework to understand and analyse the trend of health expenditure. The sustained and focused efforts of the government in the health sector are evidenced by the rising trends of government health expenditure,” the official cited earlier said.

According to the report, with a higher share of public spending, out-of-pocket expenditure (OOPE) by households declined significantly from 64.2% of total health expenditure in 2013-14 to 43.4% in 2022-23 ( ₹3,82,629 crore). The ministry said the decline reflects the impact of public health schemes and insurance programmes aimed at reducing financial stress on families. Private health insurance expenditure stood at ₹81,012 crore (9.19% of government health expenditure).

Of the current health expenditure (CHE)—which covers operational costs net of capital spending—the Union government’s share is ₹88,721 crore (11.57%) and the state governments' share is ₹1.63 trillion (21.22%). Households contribute 56.44% of current health expenditure (including insurance), enterprises account for 8.84%, NGOs make up 0.51%, and external donors contribute 0.33%.

Total pharmaceutical expenditure (including prescribed, over-the-counter, and in-patient drugs) accounted for 29.6% of current health expenditure, while traditional, complementary, and alternative medicine (TCAM) made up 3.5%.

The report noted that per capita government health expenditure increased nearly 2.7 times during the decade to ₹2,786 from ₹1,042. Primary healthcare spending by the government also more than doubled over the decade, rising from ₹50,000 crore in 2013-14 to ₹1.4 trillion in 2022-23.

Social security expenditure on healthcare—including spending under schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana—increased from 6% to 9.9% of total health expenditure. Concurrently, the share of private health insurance rose from 3.4% to 9.2%, suggesting higher insurance penetration and improved healthcare awareness.

The NHA estimates describe the flow of funds across public and private sectors. They are prepared by the NHA Technical Secretariat under the National Health Systems Resource Centre (NHSRC) using the globally accepted System of Health Accounts 2011 framework.