Are Public Health Gains Keeping Pace with India’s Economic Growth?

India has emerged as the fourth-largest economy in the world in 2025, as per the International Monetary Fund (IMF). With the second-largest population, India has surpassed Japan with a nominal Gross Domestic Product (GDP) of $4.19 trillion. At the current pace of economic growth, India is projected to overtake Germany to become the third-largest economy by 2027. This re markable rise from 14th in 1990 to 4th in 2025 can be attributed to the rapid advancement of the modern agriculture sector, industrial expansion, support for small and medium-sized enterprises, economic reforms, business outsourcing, and, importantly, the demographic dividend from a young and working population. While this economic achievement is commendable, a pressing concern remains: India’s per capita GDP, a key indicator of the standard of living, remains significantly low.^1,2

According to the IMF’s 2025 report, India’s per capita income is estimated at $2,880 (approximately ₹2.4 lakh), which is substantially lower than that of the top three global economies: the United States ($89,105), China ($13,690), and Germany ($55,910). Even countries ranked below India in total GDP have considerably higher per capita incomes. In 2024, India ranked 127th out of 196 countries in terms of per capita GDP.²

Despite rapid GDP growth, progress in key socio-economic indicators remains modest. The Human Development Index (HDI) encompasses life expectancy at birth, literacy, and the standard of living, remains at 0.685, placing the country 130th out of 190 nations globally in 2025.³ In the Global Hunger Index (2024), India ranks 105th out of 127 nations, with a score of 27.3, categorizing it among the 42 countries facing a “serious” hunger level. ⁴ The Global Multidimensional Poverty Index (MPI), which assesses deprivations in health, education, and living standards, places India at 126th out of 143 countries.⁵ While there are varied perspectives on the methodology of these indices, India’s consistent place ment across rankings suggests that economic growth has not translated proportionally into improved living standards.

Despite significant increases in GDP over the years, spending on the health sector has not increased in a proportionate manner. India’s spending on health rose from 1.4% to just 1.9% of GDP. Health’s share in total government expenditure rose modestly by 6.5% during this period.⁶ In contrast, countries with larger economies, such as the United States, China, and Germany allocate 17.6%, 7.9%, and 12.6% of GDP to health care, respectively. Even economies ranked below India in overall GDP devote a greater share of resources to health.^1,2

There is stronger evidence from the literature that countries with high spending on health care have secured better health outcomes compared to countries with lower spending on health.⁷

Public spending on health has received the least attention from policymakers in India since India’s independence. Over the years, the demand for healthcare services and the capacity to provide them have remained grossly disproportionate. Multiple demand-side challenges continue to strain the system, including exponential population growth, shifting disease patterns, widespread poverty and illiteracy, low health awareness, inadequate hygiene and sanitation, issues with water supply, an unregulated private healthcare sector, limited health insurance coverage, and high out-of-pocket expenditure.

On the supply side, significant disparities persist in the ratios of doctors to population, nurses to population, and health centers to population. These are further exacerbated by an under-resourced public health infrastructure. Shortages of trained professionals, including doctors, nurses, technicians, and pharmacists, combined with inconsistent availability of essential medicines and laboratory supplies, highlight critical systemic weaknesses.

This supply-demand imbalance significantly contributes to India’s quadruple burden of disease, marked by the slow decline of communicable diseases, a steep rise in non-communicable and lifestyle-related conditions, ongoing maternal and child health challenges, including undernutrition, and a growing mental health crisis.

To bridge this widening gap, healthcare must be elevated to a top national priority, supported by adequate and well-targeted budgetary allocations. Resources must be distributed proportionately across various segments of the health system, based on actual needs and demand.

However, increased spending alone is not a panacea. Sustainable health improvements require concurrent reforms in interconnected areas, such as agriculture, infrastructure, transportation, social welfare, women’s and child development, employment generation, poverty reduction, and population stabilization.

In conclusion, while India’s ascent to become the world’s fourth-largest economy is commendable, this achievement must not obscure the persistent gaps in public welfare. A growing GDP does not inherently translate into improved standards of living or better health outcomes. Policymakers must therefore focus on strategies to boost per capita income through economic reforms. Only then can the country achieve holistic development and significantly enhance the quality of life and well-being of its people.

Conflict of Interest

Nil