Transforming India’s Healthcare Landscape

India’s health sector stands at a critical inflection point, shaped by an ageing population, rising non-communicable diseases, and post-pandemic stress on public systems. While recent policy signals emphasise innovation, biopharma, and skilled health workforce, public healthcare financing and primary care remain structurally under-prioritised. Persistent high out-of-pocket expenditure and regional disparities underline gaps in access, affordability, and preventive care. A decisive shift from announcement-led reform to expenditure-backed public health strengthening is now imperative. 

What is the Current Regulatory Framework for India’s Health Sector?  

• Constitutional Basis: The Constitution of India lays the foundation for health regulation, distributing powers via the Seventh Schedule: 
  • State List (List II): "Public health and sanitation, hospitals and dispensaries" (Entry 6) is primarily a state subject. States are responsible for the delivery of services. 
  • Concurrent List (List III): Both Centre and States can legislate on: 
    • Medical education and profession (Entry 26). 
    • Prevention of the extension of infectious diseases (Entry 29). 
    • Drugs and poisons (Entry 19). 
• Fundamental Rights & DPSPs: 
  • Article 21: Interpreted by the Supreme Court to include the Right to Health as part of the Right to Life. 
  • Article 47: Directs the State to regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties. 
• Key Regulatory Bodies: The institutional framework is spearheaded by the Ministry of Health and Family Welfare (MoHFW), supported by various autonomous and statutory bodies: 

Body	Key Mandate
National Medical Commission	Replaced the Medical Council of India, regulates medical education, practice, and ethics (under NMC Act, 2019).
Central Drugs Standard Control Organization	The national regulatory body for pharmaceuticals and medical devices (under Drugs & Cosmetics Act, 1940). Approves new drugs and clinical trials.
Food Safety and Standards Authority of India	Regulates manufacture, storage, distribution, sale, and import of food articles to ensure safety.
National Health Authority	Apex body for implementing Ayushman Bharat Pradhan Mantri Jan Arogya Yojana  (PM-JAY) and the Ayushman Bharat Digital Mission (ABDM).
National Pharmaceutical Pricing Authority	Fixes/revises prices of controlled bulk drugs and formulations, enforces prices and availability of medicines.
Indian Nursing Council	Regulates nursing education and standards.

• Major Legislative Framework: The sector is governed by several critical Acts that define compliance and standards: 
  • Drugs and Cosmetics Act, 1940 (and Rules 1945): The backbone of pharma regulation. It establishes a comprehensive regulatory framework for the import, manufacture, distribution, and sale of drugs and cosmetics. 
    • Schedule M of the Drugs and Cosmetics Rules lays down Good Manufacturing Practices (GMP), in line with World Health Organization (WHO) standards. 
  • National Medical Commission Act, 2019: Reformed the medical education sector, introducing the National Exit Test (NExT) and regulating fee structures for private colleges. 
  • Clinical Establishments (Registration and Regulation) Act, 2010: Aims to register all clinical establishments and prescribe minimum standards for facilities and services.  
    • Implementation is patchy as it requires adoption by individual States. 
  • Mental Healthcare Act, 2017: Decriminalized suicide attempts and guarantees the right to mental healthcare. 
  • Epidemic Diseases Act, 1897 (Amended 2020): Empowers the government to take special measures to control the spread of dangerous epidemic diseases (heavily used during COVID-19). 
  • New Drugs and Clinical Trials (NDCT) Rules, 2019: It streamlined and modernized regulations for new drugs and clinical research. 
    • The Union Health Ministry amended the New Drugs and Clinical Trials Rules, 2019 to ease pharmaceutical research by replacing the CDSCO test licence requirement with a prior-intimation system for non-commercial research quantities, while high-risk drugs (cytotoxic, narcotic, psychotropic) remain licence-bound. 
  • The National Commission for Allied and Healthcare Professions Act, 2021: Standardizes the education and practice of allied healthcare professionals. 

What are the Key Advancements in India's Health Sector? 

• Launch of "Bio Pharma Shakti" & R&D Pivot: The government has structurally shifted focus from generic manufacturing to high-value innovation by launching the "Bio Pharma Shakti" initiative.  
  • This move aims to capture the global biologics market and reduce dependence on imported complex therapies, signaling a transition from volume to value leadership in the pharmaceutical value chain. 
  • It is expected to boost domestic production of biologics and biosimilars with an outlay of ₹10,000 crore. (Budget 2026-27) 
    • It includes expansion and strengthening of the Biopharma-focused network through the establishment of 3 new National Institutes of Pharmaceutical Education and Research (NIPERs) and the upgradation of 7 existing NIPERs and the strengthening of accredited clinical trial sites to move India up the value chain from "volume" to "value." 
• Ayushman Bharat Expansion for "The Silver Economy": In a major inclusivity drive, the government has operationalized health coverage for the elderly, decoupling eligibility from income status to address the high disease burden of the aging population.  
  • This universalization for senior citizens mitigates catastrophic health expenditure, which historically pushed millions of pensioner households into poverty. 
  • The Budget 2026-27 reconfirmed the universal health coverage for approximately 6 crore senior citizens (belonging to 4.5 crore families) under Ayushman Bharat PM-JAY.  
    • Also, The Ministry of Health and Family Welfare outlay for 2026–27 has been raised by nearly 10% compared to FY 2025–26. 
• MedTech Self-Reliance & PLI Maturity: The medical device sector is witnessing a "manufacturing moment" as Production Linked Incentive (PLI) schemes begin to deliver commercial validation, reducing import reliance for critical equipment.  
  • This strategic localization reduces healthcare delivery costs and secures supply chains against global disruptions, moving India towards becoming a MedTech export hub. 
  • As of early 2026, 22 greenfield projects have commissioned production of 55+ high-end devices (CT/MRI scanners). Further, customs duty cuts on components in Budget 2026 incentivize domestic value addition. 
• Targeted Cost Reduction in Oncology & Rare Diseases: Recognizing the financial toxicity of cancer care, the government has intervened fiscally by rationalizing customs duties, directly lowering the cost of life-saving immunotherapies.  
  • This fiscal health policy complements clinical efforts, making advanced treatments accessible to the middle class who are often excluded from state insurance but cannot afford private care. 
  • Budget 2026-27 exempts 17 cancer drugs (e.g., Ribociclib and Brigatinib) and rare disease medicines from customs duty. This is coupled with the establishment of new Trauma Centers in every district hospital. 
• Structural Shift to Outpatient & Preventive Care: The Economic Survey 2025-26 highlights a decisive pivot where outpatient care (OPD) and screenings are outpacing inpatient admissions, driven by the operationalization of Ayushman Arogya Mandirs (AAMs).  
  • This transition from "sick-care" to "wellness" reduces the long-term burden on tertiary hospitals by catching Non-Communicable Diseases (NCDs) early. 
  • Economic Survey 2025-26 notes 42.66 crore teleconsultations and over 506 crore visits to AAMs (December 2025).  
• Digitization of Immunization via U-WIN Portal: Replicating the success of Co-WIN, the full rollout of the U-WIN portal has digitized the Universal Immunization Programme (UIP), ensuring real-time tracking of mothers and children.  
  • U-WIN acts as a single source of truth by enabling QR-based anytime-accessible immunisation certificates, automated SMS reminders to reduce dropouts, and ABHA-linked integration that embeds child immunisation data into a lifelong longitudinal health record. 
  • This digital public infrastructure eliminates "zero-dose" children and creates portable vaccination records, critical for India's migrant workforce. 
    • As of early 2026, U-WIN tracks 27.7 crore vaccine doses and 7.43 crore beneficiaries. 
• Sickle Cell Anaemia Elimination Mission Acceleration: The mission to eliminate Sickle Cell Disease (SCD) by 2047 has moved from launch to aggressive implementation in tribal hinterlands, integrating genetic counseling with mass screening.  
  • This targeted bio-social intervention addresses historical health neglect in tribal belts, combining scientific screening with community-level card distribution. 
  • As of July 2025, more than 6.07 crore  screenings have been done in the 17 identified tribal dominated States. 
• Critical Care Infrastructure Overhaul (PM-ABHIM): Budget 2026 increased funding for the PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) to pandemic-proof the country.  
  • The focus is on creating a decentralized network of critical care blocks and integrated public health labs, ensuring that future outbreaks are managed at the district level rather than choking metropolitan capitals. 
  • For instance, Budget 2026 allocates ₹4,770 crore to PM-ABHIM (a 67.6% increase).  

What are the Key Issues Associated with India's Health Sector?  

• Chronic Underfunding & Public Expenditure Stagnation: Despite recent budgetary increases, India’s public health expenditure remains perilously low compared to global peers, forcing a reliance on the private sector that exacerbates inequality.  
  • This structural underfunding limits the expansion of critical infrastructure, leaving the "Right to Health" as an aspirational rather than practical reality for millions. 
  • For instance, as a percentage of GDP, the Union government’s allocation for health has declined drastically from 0.37% (2020-21 Actual Expenditure) to 0.29% (2025-26 BE).  
• The "Missing Middle" & Catastrophic Out-of-Pocket Expenditure (OOPE): While government schemes like Ayushman Bharat cover the poorest and private insurance shields the rich, the massive "missing middle" class faces financial ruin from a single hospitalization.  
  • The high cost of outpatient care and diagnostics, often uncovered by insurance, continues to drive millions into poverty annually. 
  • NHA 2021-22 indicates OOPE is still 39.4% of total health expenditure (down from 62.6% but still high). 
• Rural-Urban Divide & The "Ghost" Specialist Crisis: Primary healthcare in rural India has physically expanded but suffers from a "hollowed-out" workforce where facilities exist without function.  
  • The collapse of the referral chain means rural patients bypass local centers for urban hospitals, overcrowding tertiary care while rural Community Health Centers (CHCs) remain ghost towns. 
  • Rural Health Statistics 2022-23 reveal a shocking nearly 80% shortfall of specialists (surgeons, pediatricians) in rural CHCs, with 17,551 vacancies against the requirement. 
• The "Silent Epidemic" of Non-Communicable Diseases (NCDs): India is undergoing a rapid epidemiological transition where the burden of lifestyle diseases like diabetes and hypertension is outpacing the system's capacity to treat them.  
  • This "dual burden" of disease requires a shift from acute, curative care to long-term, expensive chronic management which the current public system is ill-equipped to handle. 
  • According to the ICMR-INDIAB-17 national cross sectional study estimates, the prevalence of diabetes and prediabetes in India is 101 million and 136 million. 
• Regulatory Failures & the "Pharmacy of the World" Reputation Crisis: India’s global standing as a reliable drug exporter faces an existential threat due to weak enforcement of Good Manufacturing Practices (GMP) and fragmented state-level regulation.  
  • Repeated instances of toxic contaminants in exported syrups have exposed a systemic lack of rigorous quality control and punitive accountability for negligent manufacturers. 
  • Recent deaths in Gambia, Uzbekistan, and in Indian states like Madhya Pradesh (2025) linked to Indian cough syrups containing Diethylene Glycol (DEG) have triggered WHO alerts and forced CDSCO crackdowns. 
• Antimicrobial Resistance (AMR)- The Superbug Time Bomb: Rampant, unregulated over-the-counter sale of antibiotics and poor infection control in hospitals have turned India into an epicenter for "superbugs."  
  • This resistance renders life-saving drugs ineffective, threatening to make simple surgeries or infections fatal and undoing decades of medical progress. 
  • ICMR (2024) findings show Escherichia coli and Klebsiella pneumoniae as dominant pathogens with alarmingly high resistance while Acinetobacter baumannii in the Intensive Care Unit (ICU) exhibits high-level resistance to several antibiotic classes. 
• Skewed Workforce Distribution & Human Resource Deficits: The headline doctor-population ratio often masks acute regional disparities, as medical professionals cluster in wealthy urban pockets leaving vast swathes of the hinterland underserved. 
  • The shortage is not just of doctors, but of critical allied health professionals like nurses and technicians who form the backbone of patient care. 
  • While India claims a 1:834 doctor-population ratio (counting AYUSH), state disparity is severe. For example, Bihar and UP lag significantly behind Kerala. 
• Digital Health Gaps & Data Privacy Concerns: The aggressive push for the Ayushman Bharat Digital Mission (ABDM) faces a "digital divide" where the lack of digital literacy and internet access excludes the most vulnerable from benefits.  
  • Despite nearly 79 crore ABHA IDs created (August 2025), actual usage for health record linkage remains low in rural areas due to internet gaps. 
  • Also, privacy concerns have emerged. AIIMS Ransomware Attack (2022), a major ransomware attack paralyzed the server infrastructure of the All India Institute of Medical Sciences (AIIMS), forcing critical services to operate manually. 

What Measures are Needed to Strengthen India’s Health Sector? 

• Operationalizing "Phygital" Comprehensive Primary Care: We need to upgrade the Ayushman Arogya Mandirs from mere physical outposts to "phygital" hubs that utilize the Unified Health Interface (UHI) for tele-specialist consultations while retaining high-touch community engagement.  
  • A strict "gatekeeping" mechanism must be enforced where tertiary care access is contingent upon primary care referral, decongesting major hospitals and shifting the focus from curative to preventive wellness. This hybrid model ensures continuity of care for chronic Non-Communicable Diseases (NCDs) by leveraging AI-assisted diagnostics at the grassroots level. 
• Leveraging Public Insurance for Quality and Cost-Efficient Healthcare: The government should move from a passive payer role to a “strategic purchaser”, using the scale of PM-JAY to enforce high-quality, cost-effective services from private providers. 
  • This involves moving away from "fee-for-service" models toward "value-based care" payments, where providers are incentivized based on patient health outcomes rather than the number of procedures performed.  
  • Such financial leverage can regulate private sector pricing transparency and standardization without heavy-handed legislative capping. 
• Legislation of a Dedicated Public Health Management Cadre: To relieve the burden on clinical specialists, India requires the creation of a specialized, non-clinical Public Health Management Cadre (PHMC) responsible solely for administration, epidemiology, and logistics.  
  • This administrative bifurcation allows doctors to focus exclusively on clinical treatment while professional managers handle supply chains, hospital operations, and data analytics.  
  • This structural reform is essential to professionalize district-level health governance and ensure efficient resource utilization during health emergencies. 
• Institutionalizing a "One Health" Governance Architecture: India must move beyond siloed human healthcare to establish a unified "One Health" surveillance grid that integrates human, animal, and environmental health data to predict zoonotic spillover events.  
  • This requires establishing statutory inter-ministerial bodies that can enforce synchronized protocols for antimicrobial resistance (AMR) containment and vector control across agriculture and urban planning sectors.  
  • Strengthening this interface is critical to creating climate-resilient health infrastructure that can withstand the dual threats of emerging pathogens and ecological degradation. 
• Task-Shifting to Allied Health Professionals (AHPs): Addressing the doctor-patient ratio requires aggressive "task-shifting" where mid-level providers, such as nurse practitioners and Community Health Officers (CHOs), are legally empowered to handle routine clinical functions.  
  • By strictly defining and expanding the scope of practice for the Allied and Healthcare Professions, the system can utilize the untapped potential of pharmacists, optometrists, and physiotherapists for primary screenings. This decentralizes care delivery and ensures that highly specialized medical talent is reserved for complex, critical cases. 
• Indigenization of the Bio-Security Supply Chain: Strengthening national health security requires reducing dependency on import-heavy supply chains by incentivizing domestic manufacturing of high-end medical devices and Key Starting Materials (KSMs) for pharmaceuticals.  
  • Policy focus must shift toward "Health Sovereignty" by creating dedicated MedTech parks and enforcing procurement mandates that favor indigenous innovation in genomics and biologics. This creates a self-reliant ecosystem capable of sustaining essential medical supplies during global geopolitical disruptions or trade blockades. 
• Urban Health Missions for Vulnerable Clusters: Unlike rural health, India’s urban primary health structure is fragmented, therefore, a dedicated Urban Health Mission targeting peri-urban slums and migrant clusters is structurally vital.  
  • This involves mapping "health vulnerability zones" within cities to deploy mobile health units and evening clinics that cater to the working-class demographic which cannot access daytime OPDs. Integrating these units with municipal surveillance helps track the epidemiological transition in high-density areas where infectious diseases spread most rapidly. 
• Digital Sovereignty and Interoperable Health Data: The implementation of the Ayushman Bharat Digital Mission (ABDM) must aggressively pursue "interoperability" to eliminate data fragmentation between private corporate hospitals and public facilities.  
  • By mandating standardized electronic health records (EHR) and creating a federated health data architecture, the state can enable longitudinal patient history tracking without centralizing sensitive data.  
    • This data-driven approach empowers policymakers with real-time analytics to dynamically allocate resources based on regional disease burdens rather than static historical estimates. 

Conclusion:  

India’s health sector demands a paradigm shift from episodic sick-care to resilient, preventive public health systems, anchored in cooperative federalism. Adequate public financing, workforce rationalisation, and primary-care gatekeeping are indispensable to reduce inequalities and catastrophic expenditure. Leveraging digital public infrastructure, indigenous innovation, and One Health governance can future-proof healthcare delivery. Ultimately, health must be treated not as social spending but as foundational economic infrastructure for India’s demographic dividend. 

Drishti Mains Question India’s health sector reflects a paradox of expanding coverage but persistent inequities.  Examine the structural architecture of India’s health system and analyse how chronic underfunding and federal asymmetries limit the effectiveness of public healthcare delivery.