India’s current population is estimated to be around 1.4 billion as of 2024. It is the second most populous country in the world, after China. It is even projected to reach around 1.7 billion by 2060 according to United Nation estimates.
Our aging population is a significant demographic shift. According to the UN Population Fund’s India Ageing Report 2023, there were approximately 14.9 crore persons aged 60 years and above in 2022, constituting around 10.5% of the country’s population. It is estimated that by 2036, the older population will make up around 15% of the total, which could amount to 22.7 crore people. Furthermore, by 2050, it is projected that the share of older persons in India will increase to 20.8%, comprising 34.7 crore individuals.
This poses several socioeconomic implications, including increased pressure on healthcare. As the elderly population grows, there will be a greater demand for age-appropriate healthcare services. Addressing the needs of this aging population will require comprehensive policies and infrastructure developments to ensure their well-being and inclusion in societal activities. So, how does the government solve this issue?
The hospital sector in India is a major component of the country’s healthcare infrastructure. This industry in India accounts for 80% of the total healthcare market and is witnessing significant investor demand from both global and domestic sources. As of 2023, it was reported that the hospital industry is projected to grow by 3.72% from 2024 to 2028. Furthermore, the Indian healthcare industry has been growing at a compound annual growth rate (CAGR) of around 22% since 2016.
What do hospitals want?
Hospitals are calling for significant changes in Budget 2024 to address these crucial challenges. They expect an increased healthcare spending of 2.5% of GDP to expand access and infrastructure. They also expect the existing healthcare industry to be backed by technology and innovation.
Budget of 2023
The healthcare allocation in the previous Union Budget was reported to be around 2.5% of GDP, which was seen as inadequate for fulfilling the significant need gaps in this sector.
This led to issues such as insufficient infrastructure and healthcare facilities, especially in non-metro cities. Thus, highlighting the pressing need for better healthcare infrastructure, including a shortage of beds and treatment options. The limited funds also impacted the training and development programs for healthcare providers, contributing to skill gaps within the workforce.
The upcoming Budget
A major start would be incentivising health insurance and preventive healthcare. This will result in early diagnosis and timely treatment of Non-Communicable Diseases (NCDs). So, less complications, mortality, and burden on secondary and tertiary care facilities.
There must be a substantial increase in healthcare sector allocation in the upcoming Union Budget to a minimum of 5% of the GDP. This is essential to fill the need gaps. There is a need for the expansion of healthcare access in rural and suburban areas to address the rising demand. Ayushman Bharat is aiming to make affordable healthcare accessible for 500 million people.
Adding to that, there must be reforms in medical education. Like, establishing medical, nursing, and paramedical colleges in all 500 district hospitals in the country to support healthcare needs. Such initiatives could catalyse innovation and self-sufficiency within the healthcare sector. Some healthcare experts have suggested the extension of concessional tax benefits for new domestic manufacturing entities and the setting up of a Central Medical Research and Innovation Institute in each state.
Therefore, it is evident that the hospital sector in India plays a fundamental role in meeting the healthcare needs of the population, particularly as the nation’s demographic ratio evolves. With the projected growth and its existing contribution to the healthcare market, hospitals are poised to be essential in providing specialised care to the soon-to-be aging populous nation. So, why not start this year’s budget? Upstox