Government Initiatives Boosting the Healthcare Industry in India

India has been undertaking sweeping reforms to strengthen its healthcare ecosystem, focusing on making care more accessible, affordable and future-ready. In recent years, the Government of India has expanded public health insurance, increased health spending, embraced digital health technologies, built new medical infrastructure, boosted domestic manufacturing of medical supplies and nurtured healthcare innovation.

Ensuring universal health coverage has been a central goal. In 2018, India launched Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), the world’s largest health assurance programme, to protect vulnerable families from catastrophic medical costs. This scheme provides free hospital coverage of up to Rs. 5 lakh (US$ 5,600.89) per family, and as of June 2025 covers ~12.37 crore poor and lower-income families, roughly 55 crore individuals. Notably, on October 29, 2024, the government expanded PM-JAY with Ayushman Vay Vandana to include all senior citizens above 70 years, regardless of income. By October 2025 about 9.26 million elderly have enrolled under this senior citizens’ health cover.

To further reduce out-of-pocket expenses, India has made essential medicines more affordable. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), launched in 2016, created a growing network of Jan Aushadhi Kendras that sell quality generic medicines at 50-90% less than branded prices. As of February 2025, over 15,000 Jan Aushadhi Kendras operate across the country, more than double the number in 2019-20. With this expansion, annual sales of low-cost generics have soared from Rs. 665.83 crore (US$ 75.1 million) in FY21 to Rs. 1,200+ crore (US$ 135.3 million) in FY24. In addition, over 6.85 crore people have purchased discounted drugs and implants from AMRIT pharmacies at major hospitals as of November 2025, under the Affordable Medicines and Reliable Implants for Treatment (AMRIT) initiative.

Digital health and telemedicine revolution

India is also experiencing a digital health revolution aimed at reaching the unreached. The Ayushman Bharat Digital Mission (ABDM), which was launched in 2021, is developing a secure national digital health infrastructure. With a total expenditure of Rs. 1,600 crore (US$ 180.4 million) planned for the period 2021-26, ABDM aims to give each citizen a distinct digital Health ID, now known as Ayushman Bharat Health Account (ABHA), that connects their medical records for paperless access. As on June 3, 2025, more than 78 crore digital health IDs were issued. This enabled over 55 crore health records of patients to be linked to IDs, allowing them to get care across multiple facilities easily.

Telemedicine has emerged as a gamechanger, especially for rural areas. The government’s flagship telehealth platform eSanjeevani connects patients with doctors via video across thousands of health centres. During the COVID-19 lockdowns, teleconsultations surged by 300%, prompting India to formalise Telemedicine Practice Guidelines in 2020 and rapidly scale up eSanjeevani. Today, eSanjeevani is the world’s largest telemedicine service. It operates on a hub-and-spoke model linking ~1,55,000 health and wellness centres with specialist doctors in cities. By mid-2025, the platform had facilitated about 37.2 crore remote consultations with over 2.2 lakh medical providers nationwide.

Strengthening healthcare infrastructure

Recognising the necessity of a more robust infrastructure, India has notably boosted the finances in health facilities both in cities and in the countryside. The public health expenditure of both the government and the states have almost doubled in the past few years, going from Rs. 2.43 lakh crore (US$ 27.40 billion) in 2017-18 to Rs. 5.85 lakh crore (US$ 65.95 billion) in the Budget 2023-24. The health expenditure as a percentage of GDP increased from 1.4% to 1.9% of GDP by FY24, which is a clear indication government’s commitment to health. One of the major plans is the Pradhan Mantri - Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) that was started at the end of 2021 to create strong resources in public health labs, emergency care and critical hospitals. This project with a budget of Rs. 64,180 crore (US$ 7.24 billion) for 2021-26 is building new integrated district health labs, critical care blocks, disease surveillance units and making all tiers of care stronger. It works alongside the ongoing National Health Mission (NHM), under which Health and Wellness Centres (HWCs) were set up. India reached its target of 1.5 lakh HWCs being operational, by December 2022. These centres offer free primary care, diagnostics and wellness services in every community, ranging from blood pressure and cancer screenings to yoga sessions.

Boosting domestic manufacturing of pharma and medical devices

India has long been known as the “pharmacy of the world,” and the government is doubling down on that strength by incentivising domestic manufacturing of pharmaceuticals and medical devices. In 2020-21, as part of Atmanirbhar Bharat (self-reliance), India launched dedicated Production Linked Incentive (PLI) schemes for these sectors. The PLI for critical drug ingredients (key starting materials/ Application programming interface (APIs)) has a financial outlay of Rs. 6,940 crore (US$ 782.4 million) to establish bulk drug plants by 2028-29. Likewise, the PLI Scheme for Pharmaceuticals (formulations and novel drugs) commits Rs. 15,000 crore (US$ 1.69 billion) over 2022-28 to spur production of high-value medicines such as anti-cancer and biotech drugs. To reduce import dependence on high-end equipment, a PLI Scheme for Medical Devices was introduced with Rs. 3,420 crore (US$ 285.6 million) outlay, targeting locally made Magnetic resonance imaging (MRI) machines, Computed Tomography (CT) scanners, implants, etc. These incentives have yielded quick results. As of late 2024, the PLI programmes for pharmaceuticals and devices have catalysed over Rs. 33,500 crore (US$ 3.78 billion) of industrial investment, nearly double the initial projections, while 78 manufacturing projects (48 in bulk drugs, 30 in devices) have been approved across India. New factories supported by the scheme have started producing critical APIs and advanced devices domestically, strengthening India’s supply chain resilience.

In parallel, the government has streamlined regulations and promoted “Make in India” for medical equipment. It adjusted import duties in such a way that local producers of syringe, electronic goods and others have been encouraged, and with central help, four Medical Devices Parks and three Bulk Drug Parks are being established. As per 2023 data, India ranks third in the world in terms of pharmaceutical production volume and 11th in terms of value. It is the source of 60% of the vaccines used worldwide and a considerable amount of generic drugs, which was evidenced during the COVID-19 pandemic.

Medical education and human resources development

To deliver quality care, India needs an adequate health workforce. Here too, the government’s initiatives have led to unprecedented growth. Dozens of new medical colleges have been opened or are under construction, especially in underserved districts, through central funding schemes. Since 2014, the number of medical colleges (MBBS) in the country has grown significantly, and many existing colleges have increased their intake. As a result, annual MBBS seats have more than doubled from about 51,348 in 2014 to 1,18,190 in 2023. That is a 130% increase, creating a larger pipeline of new doctors.

This period also saw an increase of about 138%, from 31,185 to 74,306, in postgraduate medical (MD (Doctor of Medicine)/MS (Master of Surgery)) seats. Moreover, the government, along with the National Medical Commission, has made provisions for medical training in other areas: nursing colleges have increased with BSc nursing seats having gone up by 53% (to 1,27,290) and Master of Science (MSc) nursing seats having increased by 39% (to 14,986) by 2023.

FAQs

What are the major government initiatives driving growth in India’s healthcare industry?

India’s healthcare growth is being driven by wider insurance coverage under Ayushman Bharat PM-JAY, digital integration through the Ayushman Bharat Digital Mission, infrastructure expansion via PM-ABHIM, and improved access to affordable medicines supported by PMBJP and PLI schemes for pharmaceuticals and medical devices.

How is Ayushman Bharat PM-JAY improving access to healthcare in India?

Ayushman Bharat PM-JAY provides free hospital cover of up to Rs. 5 lakh (US$ 5,600.89) per family, and as of June 2025 covers about 12.37 crore poor and lower-income families. The scheme was expanded on October 29, 2024 to include all senior citizens above 70 years, improving access for India’s most vulnerable groups.

What role is digital health playing in India’s healthcare transformation?

The ABDM is creating a secure digital health system where citizens use an ABHA to access medical records. By June 3, 2025, over 78 crore digital health IDs had been generated and eSanjeevani had completed about 37.2 crore teleconsultations, making healthcare more accessible, especially in rural areas.

How is the government strengthening healthcare infrastructure across India?

Through increased public spending and schemes such as PM-ABHIM, India is developing integrated district laboratories, critical care blocks, disease surveillance units and increasing the number of HWCs.

What steps is India taking to boost domestic manufacturing of medicines and medical devices?

PLI schemes for bulk drugs, pharmaceuticals and medical devices with a combined outlay of more than Rs. 25,000 crore have encouraged domestic production. By late 2024, these schemes had attracted over Rs. 33,500 crore of investment and supported 78 approved manufacturing projects, strengthening India’s supply chain resilience.