Government expenditure on healthcare has nearly tripled over the last decade to ₹3.85 lakh crore in 2022-23, according to the latest National Health Accounts (NHA) estimates released by the Union Health Ministry. The report shows government health expenditure increased from ₹1.30 lakh crore in 2013-14 to ₹3.85 lakh crore in 2022-23, representing a substantial increase in public investment in the health sector. The share of government health spending in the country's Gross Domestic Product (GDP) rose from 1.15 per cent in 2013-14 to 1.43 per cent in 2022-23, with the figure standing at 1.48 per cent according to the new GDP series with base year 2022-23. The report, prepared by the National Health Accounts Technical Secretariat (NHATS) under the National Health Systems Resource Centre, marks the tenth edition of health expenditure estimates based on the System of Health Accounts (2011) framework and reflects a sustained increase in public investment since 2013-14. As per the ministry, GHE as a share of General Government Expenditure (GGE) rose from 3.78 per cent to 4.89 per cent during this period, indicating a greater prioritisation of health in public spending.
The increased public spending has contributed to a substantial decline in out-of-pocket expenditure incurred by households on healthcare. According to the report, out-of-pocket expenditure as a share of total health expenditure fell from 64.2 per cent in 2013-14 to 43.4 per cent in 2022-23, indicating reduced financial burden on people seeking treatment. In per capita terms, Government Health Expenditure increased nearly 2.7 times from ₹1,042 in 2013-14 to ₹2,786 in 2022-23. The share of government health expenditure in total health expenditure increased from 28.6 per cent in 2013-14 to 43.7 per cent in 2022-23. The ministry attributed this reduction to sustained public health initiatives and expanded financial protection measures aimed at improving access and affordability of healthcare services. Between 2013-14 and 2022-23, the share of out-of-pocket expenditure in total health expenditure declined significantly by nearly 21 percentage points, from 64.2% to 43.4%, reflecting the government's commitment to Universal Health Coverage (UHC) and financial risk protection.
During the COVID-19 pandemic period, health expenditure reached 1.84 per cent of GDP in 2021-22 due to emergency response measures, implementation of Emergency COVID Response Packages (ECRP-I and II) and the nationwide vaccination programme. The pandemic period saw out-of-pocket expenditure as a share of total health expenditure decline further to 39.4 per cent. As per a government official, the Union government implemented the world's largest COVID vaccination programme and rolled out Emergency Response and Health System Preparedness Packages (ERCP 1 and 2) to strengthen the public health system. The ministry noted that government spending on healthcare saw a major rise during this period, reflecting the government's commitment to emergency healthcare response and universal coverage initiatives. The report highlighted that this trend is aligned with ongoing efforts towards Universal Health Coverage and a more equitable healthcare system.
The report highlights significant growth in social security expenditure on healthcare, with the share increasing from 6 per cent in 2013-14 to 9.9 per cent in 2022-23. This includes government-funded health insurance such as the AB PM-JAY, medical reimbursements to government employees, and social health insurance programmes. The share of private health insurance in total health expenditure has also increased, from 3.4 per cent to 9.2 per cent, clearly indicating improved health-seeking behaviour due to awareness and the population's purchasing power. Private health insurance expenditure stood at ₹81,012 crore (9.19% of government health expenditure). Within government health expenditure, the Union government's share is about 36.3%, while state governments contributed 63.7%, amounting to 4.89% of general government expenditure. Primary healthcare expenditure by the government more than doubled from ₹0.5 lakh crore in 2013-14 to ₹1.4 lakh crore in 2022-23. Additionally, GHE as a share of General Government Expenditure (GGE) increased from 3.78 per cent to 4.89 per cent during the same period. The Ministry of Health and Family Welfare stated that these overall trends demonstrate a consistent strengthening of India's public healthcare financing system over the past decade, with accelerated progress during and following the COVID-19 period.
Despite the significant increase in public health spending, healthcare costs remain high for working-class families. As per Dr Rajeev Jayadevan, a public health expert, nearly 300 to 400 million working-class Indians - including drivers, gig workers, and shopkeepers - form a 'Missing Middle' segment that faces challenges. They do not qualify for Ayushman Bharat poverty-line safety nets but cannot afford skyrocketing commercial insurance premiums. For this massive segment, a single major medical emergency still threatens to become a catastrophic financial disaster despite rising trends in public health funding. The NHA estimates describe the flow of funds across public and private sectors, with households contributing 56.44% of current health expenditure (including insurance), enterprises accounting for 8.84%, NGOs making up 0.51%, and external donors contributing 0.33%. The latest NHA estimates report of 2022-23 is the 10th in the series commencing from 2013-14, with the NHA providing a robust framework to understand and analyse health expenditure trends.
