Healthcare has become one of India’s largest sectors – both in terms of revenue and employment, Indian healthcare is experiencing a new wave of opportunity. The healthcare industry in India stood at US$ 61.79 billion in 2017 and is expected to reach US$ 132.84 billion by 2023. It is huge in terms of revenue and employment as the Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well as private players. Healthcare comprises hospitals, medical devices and systems, clinical trials, medical research, outsourcing, telemedicine, medical tourism, health insurance and medical equipment while providers are reinventing existing delivery models to bring healthcare closer to the patient. The healthcare market can increase three-fold to US$ 133.44 billion by 2022. India is experiencing 22-25 percent growth in medical tourism and the industry is expected to double its size from the present. The Government of India is planning to increase public health spending to 2.5 percent of the country’s GDP by 2025.
Between 1950 and 1980, the Indian healthcare facilities and personnel increased substantially but gradually due to the fast-growing population, the medical practitioners’ number fell from five per 10,000 to three per 10,000. Primary health is a major cornerstone for any country and the Indian healthcare sector is one of the fastest-growing sectors with a rising coverage for disease, services and increasing expenditure by the public. There is significant scope for enhancing healthcare services considering that health care spending as a percentage of Gross Domestic Product (GDP) is rising. Rural India, which accounts for over 70 percent of the population and health insurance is also gaining momentum in India.
But the rising population and the increase in the occurrence of chronic diseases are proving to be a big hurdle for the healthcare industry as the Indian healthcare delivery system is categorized into two major components – public and private. The public sectors are healthcare systems consisting of facilities that are run by central and state governments. The Government, i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centers (PHCs) in rural areas. The middle class of the country is growing and the industry is also growing as they are capable of affording quality healthcare. With such an increase and the better ability to pay for healthcare, the demand for healthcare services has grown from USD 4.8 Billion to USD 22.8 Billion in 2021-2022. As of today, some 50 Million Indians are able to afford western medicines as many have an annual income of more than USD 10000.
Indian public health care is severely under-financed, short-staffed, particularly rural areas particularly affected while the private sector provides the majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities. The majority of healthcare professionals happen to be concentrated around urban areas where consumers have higher paying power, leaving rural areas underserved but India’s competitive advantage lies in its large pool of well-trained medical professionals. Despite a large pool of medical staff, the fund allotment for the public health sector continues to rely on the under-financed and short-staffed. The existing health infrastructure is not enough to serve the needs of the growing population of the country and there is much that needs to be done before India’s healthcare sector gains a boost. As the industry remains still untapped, it could possibly become the engine of the Indian economy.
According to a study conducted by a private body, India will need to invest a minimum of Rs 8 lakh crore over the next 20 years to establish two million new beds while the hospital and diagnostic centers attracted Foreign Direct Investment (FDI) worth US$ 6.34 billion between April 2000 and June 2019, according to data released by the Department of Industrial Policy and Promotion (DIPP).