Study ahead of Union Budget 2026-27 urges higher public health spending as costs rise and inequality deepens
An academic study released ahead of the Union Budget 2026-27 argues India should increase public healthcare expenditure, warning that economic and social change is pushing medical costs up and widening inequality in access. Using data from 1991 to 2023, it examines factors shaping overall and out-of-pocket health spending and calls for stronger public investment.
Budget season puts healthcare spending in focus
With the Union Budget 2026-27 approaching, new academic research has renewed the case for a sharper increase in India’s public healthcare expenditure. The study argues that rising medical costs and uneven access to treatment make higher public investment necessary, particularly as the economy and society undergo rapid change.
The report highlights that healthcare affordability is shaped not only by the price of treatment but also by structural factors such as urbanisation, inflation and demographic change. In that context, the authors frame public spending as a tool to reduce inequality and improve access to essential services.
What the study examined
According to the report, the research paper titled “Impact of Determinants of Healthcare Expenditure in India: The ARDL Bounds Testing Approach” draws on national data spanning more than three decades, from 1991 to 2023, and looks at both overall per-capita healthcare expenditure and household out-of-pocket payments.
The analysis considers multiple drivers—per-capita income, secondary education enrolment, urbanisation, inflation, life expectancy and per-capita public health spending—to understand how they influence spending patterns over the long run. The study’s central message is that these factors interact in ways that can increase cost burdens and widen access gaps unless public systems are strengthened.
Why public investment is being pitched as a solution
The study’s argument is that higher public spending can reduce the pressure on households and help narrow inequality by improving the availability of services through public facilities. It points to a future where demand is likely to rise further due to longer life expectancy and changing disease burdens, making a stronger health infrastructure increasingly important.
As Budget discussions intensify, such research often becomes part of the wider debate on how to balance fiscal discipline with social-sector priorities. The authors’ recommendation, as reported, is that public health allocations should rise decisively so that access and affordability improve for a broader share of the population, rather than relying heavily on out-of-pocket spending.