Ahead of Budget 2026-27, new study urges higher public health spending to curb rising costs and inequality

Study flags a spending gap as costs rise

Ahead of the Union Budget 2026-27, new academic research has renewed calls for India to increase public healthcare expenditure, arguing that economic and social change is pushing medical costs higher and deepening inequality in access to treatment. The study examines long-run national data across multiple decades and argues that healthcare affordability and equity will be difficult to improve without sustained public investment.

The research looks at drivers of healthcare spending, including per-capita expenditure and household out-of-pocket payments, and points to structural factors such as income growth, urbanisation and inflation as shaping what families ultimately pay. The underlying warning is that when public systems are underfunded, households can end up carrying a larger share of the burden—often at the cost of delayed care, debt or foregone treatment.

What the analysis says drives expenditure

According to the report, a range of variables show long-term influence on overall healthcare expenditure and out-of-pocket payments, including per-capita income, education enrolment, urbanisation, inflation, life expectancy and per-capita health spending. The study’s conclusions are positioned as a policy input for budget-makers: if these determinants are moving in ways that increase demand and cost pressures, government spending must rise to prevent access gaps from widening.

The findings arrive as the healthcare debate increasingly intersects with jobs, inflation and productivity. When families spend more on health, consumption patterns change; when workers cannot access timely care, labour outcomes suffer. These links give health allocations a macroeconomic dimension, not just a social one.

Budget lens: access, affordability and new therapies

The discussion around Budget 2026-27 also includes the role of policy in improving access to advanced treatments. Industry voices cited alongside the study highlight areas such as insurance coverage for one-time curative therapies (including cell and gene therapies), clarity in regulation and tax or duty structures that affect domestic manufacturing inputs and innovation.

At the population level, however, the core argument remains that stronger public health financing is a foundation for equity—by improving primary care capacity, reducing avoidable out-of-pocket shocks and strengthening infrastructure so that quality care is not determined by geography or income.