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Ensuring inclusive healthcare—not just providing healthcare services—is essential for India’s path to prosperity. For a country like India, inclusive healthcare can eradicate poverty, enhance productivity, and lead to overall economic and social advancement.

The World Health Organization (WHO) defines health equity as the opportunity for everyone to achieve their full health potential without disadvantages stemming from social, economic, or political circumstances. In essence, healthcare should go beyond treating illnesses. It must encompass the creation of a healthy environment—access to clean air and drinking water, nutritious food, sanitation, and essential public health resources.

The health of a population is deeply intertwined with various social and economic outcomes. Good health not only benefits individuals but also creates social capital that contributes significantly to national prosperity.

The gaps in achieving inclusive healthcare in India

Healthcare analysis in India often focuses on aggregate data such as the number of doctors, infrastructure, or budget allocation. However, what is frequently overlooked is the distribution of these resources. A significant portion of India’s healthcare facilities is concentrated in urban areas, with some states enjoying far better healthcare services than others.

As noted by development economist P.S.M. Rao (The Statesman, 17 April 2025), Maharashtra has the highest number of allopathic doctors (2.10 lakh), followed by Tamil Nadu (1.49 lakh) and Karnataka (1.41 lakh). These three states account for nearly 38% of India’s doctors. This highlights a stark regional and rural-urban disparity that must be addressed through more equitable distribution of healthcare infrastructure.

High Out-of-Pocket Expenditure: A barrier to access

One of the most glaring indicators of a non-inclusive healthcare system is the high out-of-pocket expenditure. According to the Indian Brand Equity Foundation (IBEF), public spending on healthcare is projected to reach just 1.9% of GDP by FY2026. The Economic Survey 2024–25 had earlier anticipated this figure to be 2.5% by FY2025, still far below the global average of 5–6%.

India’s healthcare system is predominantly market-driven. Public healthcare is mostly limited to basic services through Primary Health Centres (PHCs) in rural areas and some secondary/tertiary institutions in major cities. In contrast, the private sector delivers the majority of secondary, tertiary, and advanced care—primarily located in metropolitan and tier-1 and tier-2 cities.

There is also a shortage of healthcare professionals. India has only 1.7 nurses per 1,000 people, and the doctor-to-patient ratio stands at 1:1,500—well below WHO recommendations.

Private sector dominance and its impact

The dominance of the private sector poses a major challenge to inclusive healthcare. For a low-income country like India, this translates into healthcare being unaffordable for large sections of the population.

Around 70% of healthcare services in India are provided by private entities. Private hospitals account for approximately 65% of inpatient care by value, while government hospitals cover just 35%. Additionally, 82% of outpatient consultations take place in the private sector, reflecting a systemic tilt that leaves the poor behind.

Corruption and unethical practices undermine the system

Another serious issue is the rampant corruption and unethical practices prevalent in the healthcare sector. Rao points out several such malpractices: unnecessary hospitalizations, over-prescription of diagnostic tests, unethical referrals, illegal prenatal sex determination, avoidable surgeries, the use of substandard drugs promoted through kickbacks, inflated ambulance charges, and revenue pressure on doctors to meet targets.

While the Medical Council of India prohibits such practices, lack of effective oversight continues to harm patients—especially the poor and vulnerable.

Healthcare as a concurrent subject: Shared responsibility

Healthcare in India falls under the Concurrent List of the Constitution, making it a joint responsibility of both the Union and State governments. While public health, sanitation, and hospitals are primarily state subjects, areas such as population control, medical education, and professional regulation fall under the purview of the central government.

National-level programmes like immunization are typically designed and funded by the Union Government, while implementation lies with the states. Therefore, both levels of government must be held accountable for systemic shortcomings in healthcare delivery.

Investing in Healthcare: A pathway to growth

India has immense potential to transform its healthcare sector, which can serve as a major engine of economic growth. As the world’s most populous nation, India must invest trillions of rupees to build a truly inclusive healthcare system.

The WHO notes that in low-income countries, every job created in the healthcare sector generates an additional 3.4 jobs in related industries. Moreover, for every dollar invested in fighting malnutrition, the return is $23—thanks to improved productivity and health outcomes. Ensuring that children not only survive but thrive is crucial for harnessing the country’s demographic dividend.

Toward a healthy and inclusive future

The healthcare sector is poised for rapid growth and can significantly contribute to India’s GDP. But for this growth to be equitable, India must move beyond insurance-based models and toward state-supported quality healthcare systems.

This includes ensuring the availability of essential services such as clean drinking water, sanitation, nutrition, immunization coverage, and reliable treatment infrastructure. Only then can India build a robust and inclusive healthcare system capable of supporting its broader aspirations of social justice, economic prosperity, and sustainable development.