Government Health Spending Nearly Triples in a Decade as Out-of-Pocket Medical Costs Fall Sharply in India

The report shows that Government Health Expenditure increased from approximately ₹1.30 trillion in 2013–14 to ₹3.85 trillion in 2022–23, marking a substantial rise in public investment in the healthcare sector. Over the same period, government health spending as a share of Gross Domestic Product rose from 1.15 percent to 1.43 percent, while its share in Total Health Expenditure increased from 28.6 percent to 43.7 percent.

A major structural shift highlighted in the findings is the steep reduction in Out-of-Pocket Expenditure, referring to direct household spending on medicines, hospitalisation, and treatment. This share declined from 64.2 percent of Total Health Expenditure in 2013–14 to 43.4 percent in 2022–23, indicating improved financial protection for patients and expanded access to public healthcare services.

The Ministry attributed this decline to strengthened public health infrastructure and expanded welfare initiatives, including the rollout of more than 180,000 Ayushman Arogya Mandirs, which provide free medicines, diagnostics, and primary healthcare services closer to communities across the country.

The report also cited data from the National Statistical Office’s 80th round survey, which indicated a reduction in household medical spending, including a zero median out-of-pocket expenditure for outpatient care at public health facilities. Officials noted that medicines and health supplements continue to represent the largest component of household medical costs, prompting expanded free drug distribution schemes, increased availability of low-cost medicines through Jan Aushadhi Kendras, AMRIT pharmacies, and strengthened price regulation mechanisms.

During the COVID-19 pandemic, government health expenditure saw an additional surge, reaching 1.84 percent of GDP in 2021–22 to support emergency response measures and the nationwide vaccination programme.

Public investment in primary healthcare has also shown strong growth, more than doubling from ₹0.5 trillion in 2013–14 to ₹1.4 trillion in 2022–23. Per capita government health spending increased from ₹1,042 to ₹2,786 over the same period, reflecting improved fiscal commitment to healthcare delivery.

Spending on social security for health, including Ayushman Bharat Pradhan Mantri Jan Arogya Yojana and other government-funded insurance schemes, rose from 6 percent to 9.9 percent of Total Health Expenditure during the decade.

The findings underscore a decisive shift toward expanded public healthcare financing and reduced financial burden on households, signalling a gradual strengthening of India’s healthcare system and social protection framework.