Building a Resilient Health Sector in India

• 22 Apr 2026

This editorial is based on “A major health challenge” which was published in The Hindu business line on 21/04/2026.This editorial examines the multidimensional evolution of India's health sector, highlighting critical digital and infrastructural advancements while addressing stagnant financing and the rising NCD burden.  

For Prelims:Ayushman Bharat Digital Mission,BioE3 Policy,PM-ABHIM, PM-JAY. 

For Mains: Current development in India’s Health Sector, key issues and measures needed. 

India’s health sector stands at a critical inflection point, shaped by the dual burden of infectious diseases and rapidly rising non-communicable disorders. A 2023 Lancet study estimates over 100 million Indians live with diabetes, while 130 million more are pre-diabetic, indicating a vast preventive health challenge. Public health expenditure stays around 2% of GDP, while India is expanding flagship schemes such as Ayushman Bharat. With one of the world’s youngest populations, strengthening healthcare delivery will determine whether India converts its demographic dividend into a healthy human capital advantage and move towards a resilient healthcare ecosystem. 

How is India Building a Resilient Healthcare Ecosystem? 

• Interoperable Digital Health Ecosystem: India’s transition towards an interoperable digital health grid reduces information asymmetry and enhances care continuity across fragmented public and private providers.  
  • This digital architecture democratizes healthcare access by establishing a foundational data infrastructure that enables longitudinal, predictive health monitoring.  
  • Under the Ayushman Bharat Digital Mission (ABDM), over 800 million Ayushman Bharat Health Accounts (ABHA) have been generated to date to track patient histories.  
    • Furthermore, the integration of over 4.85 lakh health facilities into the Healthcare Professionals Registry ensures a verifiable, data-backed clinical ecosystem nationwide. 
  • Also, Teleconsultation services at Ayushman Arogya Mandirs (AAMs) enable access to specialist care closer to home, addressing issues of physical access, provider shortages, and continuity of care.  
    • As of October 2025, over 41 crore teleconsultations have been conducted. 
• Comprehensive Primary Care & Preventive Health: Shifting from selective to comprehensive primary care directly targets the escalating burden of non-communicable diseases by enabling early screening at the grassroots.  
  • This decentralization of healthcare delivery minimizes out-of-pocket expenditure by treating conditions proactively before they lead to complex tertiary complications.  
  • Over 1.8 lakh Ayushman Arogya Mandirs are now operational, specifically focusing on screening the estimated one in four Indians affected by metabolic dysfunction.  
  • Since 2017, India has significantly expanded large-scale health screening and early detection efforts.  
    • Around 41.5 crore people have been screened for hypertension, with 7.1 crore diagnosed and 5.7 crore notified.  
    • For diabetes, 41.3 crore individuals have been screened, leading to 4.7 crore detections and 3.4 crore under treatment. 
• Demand-Side Financial Risk Protection: Demand-side financing through publicly funded health insurance insulates vulnerable demographic cohorts from catastrophic health shocks and incentivizes private medical infrastructure in Tier-2/3 cities.  
  • This fiscal consolidation in healthcare actively shifts the national paradigm from out-of-pocket expenditure dominance to pooled, equitable risk mechanisms.  
  • The PM-JAY is aimed to target the bottom 40% of the Indian population, covering 120 million people, providing an annual ₹5 lakh financial safety net per eligible household.  
  • As of February, 2026, a total of 11.69 crore hospital admissions have been authorised under the scheme, including 6.74 crore admissions in private hospitals. 
• State-Capital Convergence in Indigenous MedTech: Strategic state-capital convergence in domestic medical manufacturing mitigates severe supply chain vulnerabilities and cements India’s positioning as a resilient hub for therapeutic goods.  
  • By aggressively incentivizing the local production of active pharmaceutical ingredients (APIs), the state is strategically decoupling its critical health tech reliance from volatile global imports.  
    • 3 bulk drug parks have been approved and are at various stages of development in the States of Andhra Pradesh, Gujarat, and Himachal Pradesh, through their respective State implementing agencies. 
  • The Scheme for Promotion of Research and Innovation in Pharma MedTech (PRIP) seeks to strengthen India’s pharmaceutical and medical technology ecosystem by moving beyond generic manufacturing towards innovation-driven growth. 
  • The PLI scheme for medical devices aims to boost domestic manufacturing and attract investment. It has generated ₹12,000+ crore in sales (including ₹5,800+ crore in exports) and attracted ₹1,000+ crore in investments.  
• Deeptech and Biomanufacturing Integration: Fostering a localized Deeptech and biomanufacturing ecosystem accelerates precision medicine capabilities and fortifies national epidemic preparedness through indigenous innovation.  
  • This regulatory and infrastructural push transitions the pharmaceutical sector from high-volume generic manufacturing to high-value, patent-driven biomedical research.  
  • The recent BioE3 policy framework actively targets expanding India's bio-economy to a $300 billion valuation by the year 2030.  
    • Additionally, ICMR's active deployment of the i-Drone network and AI-driven clinical registries is effectively optimizing cold-chain vaccine and blood logistics in challenging geographical terrains. 
  • In the Union Budget 2026–27, the government proposed the Biopharma SHAKTI initiative with an outlay of ₹10,000 crore over five years to position India as a global biopharmaceutical manufacturing hub and strengthen domestic production of biologics and biosimilars. 
• Decentralized Epidemiological Surveillance: Building a decentralized, tech-enabled genomic and epidemiological surveillance grid ensures predictive modeling and rapid containment of emerging zoonotic or climate-sensitive threats.  
  • This proactive infrastructure transitions public health administration from reactive crisis management to continuous, data-driven systemic resilience.  
  • The PM-ABHIM initiative allocates ₹64,000 crore to structurally establish integrated public health laboratories across all administrative districts.  
  • GenomeIndia has completed whole genome sequencing of 10,000+ Indians, creating a diverse genomic database to advance healthcare, research, and sustainable development. 
    • Under the Department of Biotechnology’s UMMID initiative, NIDAN Kendras have been set up to address genetic disorders through prenatal testing, newborn screening, and counselling for at-risk mothers.. 
• Expansion of Medical Human Capital: Aggressively expanding medical education infrastructure rectifies the historical skew in doctor-population ratios and addresses the severe geographical maldistribution of clinical talent.  
  • This human capital investment is an absolute necessity for operating and sustaining the massive physical infrastructure being built under overarching federal health missions.  
  • The number of medical colleges has increased from 387 in 2014 to 810+ as of December 2025.  
  • The strategic establishment of 157 new nursing colleges co-located with existing medical colleges is explicitly aimed at closing the allied healthcare workforce deficit. 
• Strategic Global Health Diplomacy: Leveraging health diplomacy as a core foreign policy instrument enhances India's strategic soft power while securing reciprocal access to global medical supply chains.  
  • This outward-looking posture establishes India as the reliable pharmacy of the Global South and builds crucial bilateral convergences on healthcare regulatory standards.  
  • India's leadership in hosting the WHO Global Centre for Traditional Medicine in Gujarat aims to integrate evidence-based AYUSH practices with global clinical standards.  
    • Additionally, by supplying over 50% of the global demand for various fundamental vaccines, India continually reinforces its status as a critical node in international health security. 
• Medical Value Travel and Holistic Wellness (HEAL in India): India is positioning itself as a global healthcare hub by integrating traditional Ayush systems with modern medicine to offer cost-effective, high-quality care.  
  • This "One Earth One Health" approach leverages world-class infrastructure and specialized visas to attract international patients, boosting the medical economy. 
  • For instance, between January and November 2025, over 4.5 lakh foreign tourists visited India for medical treatment, as per provisional data. 

What are the Key Issues Associated with India’s Healthcare Ecosystem? 

• Stagnant Public Health Financing: Stagnant public health funding fundamentally constrains the state's ability to transition from reactive crisis management to proactive, universal health coverage.  
  • This chronic macroeconomic underinvestment creates structural bottlenecks that explicitly prevent the scaling of essential primary care and specialized medical infrastructure.  
  • Despite the National Health Policy targeting a 2.5% of GDP spend by 2025, combined public spending lingers under 2% in early 2026.  
  • Furthermore, the Union government’s allocation for health has declined drastically from 0.37% (2020-21 Actual Expenditure) to 0.29% (2025-26 BE), shifting an unsustainable fiscal burden directly onto state governments. 
• Catastrophic Out-of-Pocket Expenditure: The overwhelming reliance on private capital for routine healthcare severely exacerbates domestic inequalities, turning medical emergencies into acute socioeconomic crises.  
  • This regressive financing architecture continuously undermines poverty alleviation efforts by forcing vulnerable demographics into severe distress financing.  
  • Recent 2026 economic data indicates that out-of-pocket health expenditure still constitutes a staggering 39% of India's total health expenditure.  
    • Consequently, exorbitant medical costs push millions below the poverty line annually, with severe medical events consuming up to 80% of household savings. 
• Rural-Urban Infrastructure Asymmetry: A severe geographic maldistribution of clinical assets creates a highly inequitable healthcare landscape that deeply disadvantages India's massive rural demographic.  
  • The concentration of advanced diagnostic and tertiary care facilities in metropolitan mega-hubs effectively denies timely, life-saving medical interventions to the hinterland.  
  • Notably, 73% of public hospital beds in India are located in urban areas, although 69% of the population resides in rural areas. This significantly disadvantages the rural population’s healthcare access 
    • Recent rural health statistics highlight this spatial crisis, revealing a nearly 34% vacancy rate in critical health worker posts at sanctioned primary centers. 
• Escalating Non-Communicable Disease Crisis: The epidemiological transition toward metabolic and lifestyle-driven diseases presents a multi-decade threat to India's demographic dividend and workforce productivity.  
  • The existing healthcare architecture remains heavily skewed toward infectious disease management, lacking the holistic, long-term care frameworks required for chronic disease mitigation.  
  • For instance, a new study published in Lancet estimates that 101 million people in India, 11.4% of the country's population, are living with diabetes. 
  • NCD-related morbidities and lost workforce productivity are projected to collectively cost the Indian economy trillions by 2030. 
• Digital Health Adoption and Literacy Gaps: While India is rapidly deploying sophisticated digital health public goods, a systemic lack of digital health literacy among marginalized populations restricts inclusive technological adoption.  
  • This creates an exclusionary digital divide where the targeted beneficiaries of seamless health data integration remain disconnected from its clinical advantages.  
  • The Ayushman Bharat Digital Mission has successfully generated over 800 million Ayushman Bharat Health Accounts by early 2026.  
    • However, real-world utilization remains critically low among vulnerable groups. A national survey in 2021 found only 10% of users engaged with the ABHA platform, despite 60% being aware of it. 
• Fragmented Cancer and Critical Care Networks: The systemic neglect of comprehensive oncology infrastructure, from localized early screening to palliative care, results in artificially high national mortality rates.  
  • The extreme centralization of advanced immunotherapy and specialized critical care units severely limits intervention efficacy for economically disadvantaged and rural patients.  
  • Despite recent expansions, grassroots screening coverage remains highly suboptimal nationwide, leaving severe diseases undetected until reaching advanced, largely untreatable stages.  
  • The ongoing initiative by NITI Aayog to build a database of over 20,000 cancer profiles underscores the desperate clinical need to deploy AI-driven early detection to bypass this diagnostic bottleneck. 
• Deficits in Allied Healthcare Human Capital: The aggressive expansion of physical medical infrastructure and hospital beds is systematically undermined by a chronic deficit in specialized allied healthcare professionals.  
  • This severe talent scarcity inflates operational costs, heavily reduces the quality of localized care, and prevents newly established facilities from operating at optimal capacity.  
  • Estimates indicate a shortage of over 6 million allied and healthcare professionals in India, across diagnostics, imaging, rehabilitation, and clinical support.  
    • Despite forming nearly 60% of the healthcare workforce, these roles remain significantly understaffed.  
  • This crisis is further exacerbated by the continuous emigration of skilled nurses and technicians, alongside persistent instructional shortages in expanding regional medical colleges. 
• Inefficient Fiscal Transfers and Cess Utilization: Administrative bottlenecks and a lack of ring-fenced financial governance severely dilute the macroeconomic impact of centrally collected health revenues.  
  • A Comptroller and Auditor General (CAG) report released in February 2026 flagged a ₹43,426 crore gap in the transfer of health cess to the  Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN). 
    • The systemic failure to fully deploy dedicated health cesses limits the rapid expansion of critical national missions and specialized clinical infrastructure across regional states.  
• Fragmented Procurement and Supply Chain "Drug Failures": The public healthcare system is frequently paralyzed by centralized procurement delays, leading to "stock-outs" of essential medicines and forcing hospitals to make expensive, non-competitive local purchases.  
  • This administrative friction not only inflates the cost of public care but also leads to quality compromises where drugs are sometimes administered before safety reports are finalized to meet immediate patient demand. 
  • For instance, a Comptroller and Auditor General of India audit flagged systemic gaps in drug availability, procurement, and quality in Delhi government hospitals, highlighting inefficiencies in the Central Procurement Agency.  
    • Between 2016–17 and 2021–22, hospitals had to procure 33–47% of essential drugs independently due to delays in supply. 
• Zoonotic Hotspots and Fragmented "One Health" Surveillance: India’s rapid urbanization and high livestock density create a fertile ground for zoonotic diseases, yet the integrated monitoring of human, animal, and environmental health remains functionally siloed.  
  • Despite the launch of the National One Health Mission (NOHM), the delay in real-time data sharing between veterinary and human health departments often means outbreaks are only detected after significant human transmission has occurred.  
    • This "reactive" rather than "proactive" stance leaves the healthcare ecosystem vulnerable to localized spillovers evolving into larger public health crises. 
• Escalating Antimicrobial Resistance (AMR) and Stewardship Gaps: The unchecked use of high-end antibiotics in both human medicine and the poultry sector is rapidly eroding the efficacy of "last-resort" drugs, pushing India toward a post-antibiotic era. 
  • While the National Action Plan on AMR 2.0 (2025–2029) has introduced "Red Line" packaging to curb over-the-counter sales, enforcement at the community pharmacy level remains highly inconsistent.  
  • This regulatory lag, combined with environmental contamination from pharmaceutical hubs, creates a reservoir of "superbugs" that complicates routine surgeries and neonatal care. 

What Measures are Needed to Strengthen India’s Healthcare Ecosystem? 

• Implementing a "Health-in-All-Policies" (HiAP) Governance Model: Health resilience requires a radical shift where every ministerial department, from Urban Development to Agriculture, is mandated to evaluate the clinical impact of their policy outputs.  
  • This inter-sectoral convergence addresses social determinants like air quality, sanitation, and nutritional security, which currently drive the bulk of India’s metabolic disease burden.  
  • Such a framework would move the national health discourse beyond hospital-centric curative care toward a systemic, whole-of-government wellness philosophy. 
• Architecting a Hybrid Health-Financing "Public-Private" Pooled Fund: To bridge the persistent funding gap, India should establish a sovereign health wealth fund that pools CSR contributions, health cesses, and private philanthropic capital under a unified developmental mandate.  
  • This "blended finance" mechanism could provide low-interest credit for Tier-2 and Tier-3 city hospital expansions and incentivize the manufacturing of high-end medical diagnostics.  
  • By de-risking private investment in under-served geographies, the state can ensure that quality tertiary infrastructure is no longer an urban-exclusive luxury. 
• Transitioning to Value-Based Care and Outcome-Linked Reimbursements: The current "fee-for-service" or "per-procedure" payment model must be replaced with a value-based reimbursement system that rewards healthcare providers for long-term patient recovery and chronic disease stabilization.  
  • Under schemes like PM-JAY, linking hospital payouts to clinical outcomes rather than just admissions would curb "supplier-induced demand" and unnecessary surgeries.  
  • This shift incentivizes hospitals to prioritize preventative follow-ups and holistic patient management, effectively reducing the national rate of medical readmissions. 
• Scaling "Medical-Legal-Social" Integrated Primary Centers: Primary health centers should be reimagined as community hubs that integrate clinical care with legal aid for health rights and social support for government scheme enrollment.  
  • This multidimensional approach addresses the "access-to-justice" gap where marginalized patients are often denied entitled benefits due to bureaucratic friction or lack of documentation.  
  • Transforming Ayushman Arogya Mandirs into such integrated nodes would ensure that the social vulnerabilities of a patient are treated alongside their biological symptoms. 
• Decentralizing the "MedTech Supply Chain" via Regional Clusters: India must move beyond "bulk drug parks" to create specialized MedTech "Silicon Valleys" focused on indigenous manufacturing of high-value components like MRI magnets, semiconductors for ventilators, and robotic surgical tools.  
  • By creating regional clusters that co-locate research universities with manufacturing units, India can decouple its critical health infrastructure from volatile global logistics and currency fluctuations.  
  • This fosters a self-reliant ecosystem where "Designed in India" medical devices cater specifically to the tropical climate and cost-sensitive realities of the Global South. 
• Professionalizing the "Public Health Management Cadre" (PHMC): To optimize administrative efficiency, India needs a dedicated, non-clinical Public Health Management Cadre that separates clinical duties from specialized healthcare administration and logistics.  
  • This ensures that trained doctors focus exclusively on patient care while professionals with expertise in epidemiology, health economics, and supply chain management handle the systemic operations.  
  • Professionalizing health governance at the district and state levels would eliminate the "administrator-doctor" friction and significantly improve the absorptive capacity of allocated health budgets. 
• Democratizing Precision Medicine through Genomic Democratization: Integrating affordable genomic sequencing into the routine diagnostic workflow at public hospitals would allow for targeted, precision therapies for cancer and rare genetic disorders.  
  • By utilizing the data from the "Genome India" project, the healthcare system can transition to "personalized prevention," identifying individuals at high risk for specific metabolic conditions based on their genetic markers.  
  • This high-tech intervention, if democratized, would leapfrog traditional diagnostic delays and significantly reduce the long-term cost of managing chronic, late-stage pathologies. 
• Institutionalizing a Unified "One Health" Surveillance Framework: India must integrate human, animal, and environmental health surveillance into a singular, real-hearted data grid to preemptively manage zoonotic spillover and antimicrobial resistance.  
  • By merging the National Centre for Disease Control (NCDC) protocols with veterinary and ecological monitoring, the state can shift from reactive outbreak management to predictive pandemic prevention.  
  • This necessitates the deployment of AI-driven bio-surveillance at high-risk interfaces like livestock markets and fragile Himalayan ecosystems to detect pathogens before they jump species. 
• Mainstreaming "Antimicrobial Stewardship" via a Circular Biosecurity Framework: To combat the escalating "silent pandemic" of drug-resistant pathogens, India must move beyond voluntary guidelines to a mandatory stewardship model that regulates the entire lifecycle of antimicrobials.  
  • This involves enforcing "Prescription-Only" compliance through digital tracking of high-end antibiotics (the WHO 'Watch' and 'Reserve' categories) to eliminate over-the-counter misuse in human medicine. 
  • Simultaneously, the framework must mandate stringent "effluent discharge standards" for pharmaceutical manufacturing clusters to prevent active pharmaceutical ingredients (APIs) from leaching into water bodies and creating environmental resistance hotspots. 

Conclusion: 

Strengthening India’s health sector requires a paradigm shift from fragmented curative interventions to a cohesive, data-driven, and preventive ecosystem. By bridging the rural-urban infrastructure divide and institutionalizing a "One Health" governance model, India can mitigate the escalating burden of metabolic and non-communicable disorders. Achieving the target of 2.5% GDP spend is not merely a fiscal goal but a prerequisite for securing the nation’s demographic dividend. Ultimately, a resilient healthcare framework will serve as the foundational pillar for India’s transition into a high-income, developed economy by 2047. 

Drishti Mains Question

"The epidemiological shift toward non-communicable diseases (NCDs) poses a significant threat to India’s human capital." In light of this statement, evaluate the necessity of transitioning from a "fee-for-service" to a "value-based" care model.

 

FAQs

1. What is the primary cause of high Out-of-Pocket Expenditure (OOPE) in India?
A heavy reliance on private healthcare capital and inadequate public health insurance coverage for routine outpatient care.

2. How does the BioE3 policy impact the health sector?
It promotes high-value biomanufacturing and precision medicine, aiming to scale India’s bio-economy to $300 billion by 2030.

3. What is the "One Health" approach?
An integrated strategy that links human, animal, and environmental health to monitor zoonotic spillover and antimicrobial resistance.

4. What are Ayushman Arogya Mandirs?
Rebranded Health and Wellness Centres (HWCs) focused on providing comprehensive primary care and decentralized NCD screening.

5. Why is the Public Health Management Cadre (PHMC) being proposed?
To separate clinical duties from professional administrative and logistics management, enhancing the efficiency of health governance. 

UPSC Civil Services Examination, Previous Year Questions (PYQs) 

Prelims

Q. Which of the following are the objectives of ‘National Nutrition Mission’? (2017)

1. To create awareness relating to malnutrition among pregnant women and lactating mothers.  
2. To reduce the incidence of anaemia among young children, adolescent girls and women.  
3. To promote the consumption of millets, coarse cereals and unpolished rice.  
4. To promote the consumption of poultry eggs.  

Select the correct answer using the code given below:    

(a) 1 and 2 only    

(b) 1, 2 and 3 only    

(c) 1, 2 and 4 only     

(d) 3 and 4 only    

Ans: (a)

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Mains

Q. “Besides being a moral imperative of a Welfare State, primary health structure is a necessary precondition for sustainable development.” Analyse. (2021)