INDUSTRY BACKGROUND HEALTHCARE SITUATION IN INDIA ECONOMICS ESSAY PART 1

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Healthcare industry in India is currently estimated to be 65 billion USD industry and is poised for rapid growth in medium term so as to reach 280 billion USD by 2020. Growing population, increasing lifestyle related health problems, cheaper treatment costs, thrust in medical tourism, developing health insurance coverage, increasing trend in disposable income, government focus on healthcare initiatives and PPP models are few of the driving factors of this sector in India.

Figure Projected Growth in healthcare sector in India [2]

Healthcare industry can be divided into the following sub sectors:

Figure Breakup of Indian Healthcare Sector [3]

Clearly, as depicted above hospital is the major sub sector within the healthcare industry.

Analyzing the negative aspects we found that the Indian healthcare expenditure is still way below than the developed economies and amongst the lowest as compared to other emerging economies and the existing healthcare infrastructure lags behind most of countries in the world. India boasts of being an emerging economy growing at a rate of 7-8% which is above the rate of growth of most of the economies in the world, but the actual healthcare expenditure by government is close 0.936% of GDP. Several committees have suggested increasing this level up to 2.5% in the 12th five year plan, but still the actual 12th five year plan has projected for only 1.58% of GDP as healthcare expenditure by government [4] .

Government contribution in healthcare expenditure is much low as compare