The Political Economy of Health is the “analysis of causes of disease distribution that requires attention to the political and economic structures, processes and power relationships that produce societal patterns of health, disease, and wellbeing via shaping the conditions in which people live and work”.1 Consequently, the perceptions regarding the severity of the health problem, the responsibility for dealing with the problem, and affected populations play a critical role in influencing political response.2 The response may vary from incremental policy change to comprehensive reform based on fiscal constraints and the capacity of political institutions to assimilate and understand the long-term effects of public health concerns. Therefore, understanding the political economy of health provides valuable insights to the stakeholders on the evolution of health priorities over time and facilitates agenda setting.

In India, the transformative changes in health policy display the government’s dedication to its citizens’ health and welfare and demonstrate its understanding of the political economy. In the past seven years, substantial progress has been made by timely recognition and acknowledgement of the issues. An analytic and problem-solving approach is used to identify feasible policy solutions and policies, which, once developed, are complemented by an enabling environment to ensure sustainability. Thereafter, a political opportunity is identified to introduce the policy, providing a platform with defined trajectories for political attention. Achievements of recent interventions such as the Free Drugs and Diagnostics Service Initiative (FDDSI), Swachh Bharat Mission (SBM), Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), the four pillars of Ayushman Bharat- i.e., Ayushman Bharat- Health and Wellness Centre (AB-HWC), Ayushman Bharat- Jan Arogya Yojana (AB PM-JAY), Ayushman Bharat- Digital Mission (ABDM) and Pradhan Mantri Ayushman Bharat- Health Infrastructure Mission (PM-ABHIM) and tied grants under the Fifteenth Finance Commission (FC-XV) depict India’s progress towards achieving the National Health Policy (NHP) 2017 targets, Sustainable Development Goals (SDGs) and Universal Health Coverage (UHC).

This narrative review critically analyses the progressive efforts made by the Government of India (GoI) in the backdrop of addressing political and economic challenges for providing efficient, equitable, accessible, affordable and quality healthcare (Figure 1). The statements made in the preceding paragraph have been discussed through an analysis of the implications of economic forces on strengthening health systems, reforms in healthcare, infrastructure, service delivery, policy prescriptions and interventions, provision of financial risk protection, and economic implications.

Figure 1
Figure 1.Major Healthcare Initiatives in India: 2005-2021.

Implications of economic forces on health systems strengthening

The Alma Ata declaration of 1978 endorsed social justice and rights for masses who received selective health care services from vertical disease-oriented programs instead of an integrated and horizontal health system.3,4 India, being a signatory to the declaration, affirmed its announcement as integral to the nation’s holistic development. Even though the declaration favoured Comprehensive Primary Health Care, the emphasis was more on selective cost-effective and highly impactful interventions because of feasibility.5

In India, selectivity persisted with progressively declining public health spending that parallelly coexisted with Structural Adjustment Programmes (SAPs).5,6 While the SAPs promised directions to improve health system performance, they rendered them compliant with the prescribed economic measures. The loan conditionalities from the IMF/World Bank further reduced the state’s role relative to the private sector and opened the economy, fostered market competition and mandated the adoption of user charges.6

The SAPs implemented through the Eighth (1992-97)7 and Ninth Five Year Plan (1997-2002)8 influenced the economic and social determinants of health and resulted in insufficient gains among the vulnerable groups. The endorsed privatization process heavily constrained access to tertiary care by escalating costs, and the use of inappropriate and unsustainable technologies exposed the poor to the mercy of a shrinking public sector.6

With several shortcomings,9–11 some advantages were also realized. For instance, the Ninth Five Year Plan increased intersectoral coordination and the involvement of voluntary, private organizations and self-help groups, empowered the rural local bodies, namely - the Panchayati Raj Institution (PRIs), and utilized local and community resources to strengthen healthcare.

The recommendations of the National Commission on Macroeconomics and Health,12 the Tenth (2002-07)13 and Eleventh Five Year plans (2007-12)14 paved the way for reforms at the primary, secondary and tertiary levels. The plans emphasized mechanisms for providing near-universal coverage through reorganization and restructuring of healthcare infrastructure, human resource development and horizontal integration of vertical programs facilitated by the formation of a single health and family welfare society at all levels. Efforts were also made to build an effective system of disease surveillance.

The National Rural Health Mission (NRHM), now known as the National Health Mission (NHM), was launched in 2005 to achieve universal access to equitable, affordable, and high-quality health care. Previously, NHM focused on Reproductive and Child Health and Communicable diseases, especially among vulnerable groups.15 Acknowledging major gains, a significant shortcoming of NHM was in delivering an essential package of services with the selective primary care approach. The evolving needs of the population due to changing demographic and epidemiological profiles could no longer be addressed with a selective package. This was true especially with the growing burden of mortality and morbidity due to non-communicable diseases.

Policy prescriptions & interventions

The GoI has stimulated fundamental policy level changes and interventions to ensure health equity. The National Health Policy (NHP) 201716 is a prescription to address the existing and emerging socio-economic and epidemiological challenges as a crucial step towards UHC. Aligned with the goals of NHP 2017, the GoI established Ayushman Bharat (AB) with two important components marking a transitional shift in prioritizing policies and programs for achieving UHC.17 The AB- Health and Wellness Centers (AB-HWCs) function as a platform to deliver Comprehensive Primary Health Care (CPHC) with linkages to referral hospitals. Although AB-HWC reflects the government’s efforts to convert policy articulations to budgetary commitment to bring services closer to communities, some challenges remain18; there is a need to strengthen intersectoral convergence for effective coverage and penetration of health services within relevant non-health departments. Another component of AB, the Pradhan Mantri Jan Arogya Yojana (PMJAY) provides financial protection to the bottom 40% of the population. The scheme has been implemented across 33 States and Union Territories, including the most underserved regions.19 Nevertheless, the linkages between the services under primary healthcare and the financial provisions under PMJAY need to be bolstered.

The National List of Essential Medicines (NLEM 2015) now includes an additional 376 drugs along with coronary stents in ceiling prices.20 The Medical Device Rules 2017 provides risk-based classification, licensing and regulation of medical equipment,21 while the amendment in 2020 ensures quality assurance and encompasses commonly used medical items.22 Due to important amendments, essential devices like cardiac stents are now approximately 85% lower than the market rates in 2017.23 Notwithstanding, the increase in domestic manufacturing and reducing costs need to be supplemented by effective implementation of the Production Linked Incentives (PLI) schemes.

The amendment of the Maternity Benefits Act in 2016 to extend the maternity leave period from 12 to 26 weeks24 serves as a good example of inclusivity. Another example is the Mental Healthcare Act 2017, which champions a rights-based statutory framework to receive optimum care and to live with dignity and respect.25 However, to materialize the vision, a more citizen-centric approach is needed to ensure mental health care services at the primary and community level with established bi-directional referral and follow-up linkages at higher levels of care.

India also eliminated maternal and neonatal tetanus in May 2015 before the set target of December 2015.26 Regarding communicable diseases, it passed the HIV & AIDS (prevention & control) Act 2017 to end the HIV/AIDs epidemic by 2030 in accordance with the target SDGs.27,28 Additionally, it has implemented a National Strategic Plan to eliminate Tuberculosis (TB) by 2025.29 Yet, the nation must undertake strategic efforts to overcome the lag induced by the pandemic to achieve the target.30

Improving infrastructure

Several breakthroughs in infrastructural reforms have been created under the NHM. The rollout of AB-HWC involves upgrading existing healthcare infrastructure at the primary level.31 Recently, the Fifteenth Finance Commission (FC-XV) recommended grants for specific health sector components to the tune of Rs. 70,051 crores to strengthen the existing infrastructural system at the grass-root level.32 To ensure effective planning and utilization of funds, local bodies in both rural and urban areas must be actively involved throughout the implementation process.32

Additionally, the Ayushman Bharat Digital Mission (ABDM) was launched to develop and support the integrated digital health infrastructure of the country, which intends to bridge the existing gap among stakeholders.33

The GOI recently launched the biggest pan-India infrastructure scheme known as Pradhan Mantri Ayushman Bharat- Health Infrastructure Mission (PM-ABHIM) to strengthen the country’s health infrastructure, disease surveillance, and health research. However, the success of the initiative relies on both the centrally sponsored (CSS) and central sector (CS) components to work together synergistically.

Addressing gaps in service delivery

In addition to strengthening primary and secondary healthcare services, gaps in service delivery have been continually addressed. Mission Indradhanush gave impetus to improved immunization coverage by launching newer vaccines in routine immunization.34–36 The Universal Immunization Programme 1985 (UIP 1985) converted immunization into a people’s social movement. Since 2014, many additional vaccines have been delivered through routine immunization services to mitigate the burden of communicable diseases in the country.37 Yet, sustained efforts are required to redress differential uptake of immunization coverage, especially among States showing a decline, as reported in national-level surveys and state-level facility reports.

With the outbreak of the SARS-CoV-2 pandemic, the nation’s economic activities came to a prolonged standstill. In order to mitigate the externalities of the pandemic and restore normalcy to both life and the economy, an expedited vaccine rollout was identified as India’s strategy. The leadership had to navigate through supply-side constraints on vaccine manufacturing and demand-side constraints imposed by vaccine hesitancy, digital gaps, vaccine wastage, and vaccine equity in rural and urban India. Nevertheless, the initiation of the drive leveraging existing and additional capacities posited the nation and its economy to be better equipped to manage the impending waves.

Other noteworthy mentions that follow the 12th Five Year Plan refer to the Pradhan Mantri National Dialysis Program, the Pradhan Mantri Bharatiya Janaushadi Kendras, the AMRIT pharmacies38 and the Regional Organ & Tissue Transplant Organization (ROTTO) networks.39

Initiatives focused on health benefits and addressing social determinants of health

The Swachh Bharat Mission, Pradhan Mantri Ujjwala Yojana (PMUY), and the Jan Aushadhi Scheme attend to the overarching aim of NHM even though they are not under the purview of the Ministry of Health. An ongoing evaluation of PMUY in selected states of India demonstrated an evident influence of LPG connection with the general health of the primary cooking person and other family members in the preliminary analysis.40 Future studies need to be conducted on the environmental benefits of PMUY in the community.

The POSHAN Abhiyaan was launched to tackle malnutrition through multi-modal interventions.41 Still, convergent planning as envisioned remains a multi-sectoral governance challenge, which needs collaborative and distributive leadership to bring all actors out of their ‘silos’.42

The Digital India campaign and e-Health initiatives are envisaged to redress inaccessibility issues.43 The Swachh Bharat Mission launched in 2014 doubled the country’s rural sanitation coverage from 38% to over 83% in four years since its inception.44

Economic implications of health system strengthening/reforms

The National Health Accounts Estimates for India 2017-18 (NHA 2017-18) demonstrate significant changes in India’s economic profile.45 It indicates an increase in the share of government health expenditure (GHE) in the total GDP of the country from 1.15% (2013-14) to 1.35% in (2017-18). The GoI now aspires to increase health spending to 3% by 2022.

Moreover, the share of GHE (40.8%) in total health expenditure (THE) has also increased from 28.6% over time. GHE as a share of Total Government Expenditure has increased from 3.78% (2013-14) to 5.12% (2017-18), denoting the increasing importance of health in the country. The share of primary healthcare in the current GHE has also increased from 51.1% (2013-14) to 54.7% (2017-18).45 The share of social security expenditure on health has also increased from 6% (2013-14) to around 9 % (2017-18) as a percent of THE.45

Currently, out-of-pocket expenditure (OOPE) as a share of THE is 48.8%, and Current Health Expenditure is 55.1%. In 2013-14, the share of OOPE in THE was 64.2%, and Current Health Expenditure was 69.07%.45

Although the NHA estimates indicate a sturdy move towards comprehensive health care, there is a need to further reduce OOPE, making for nearly 48.8% of the total health expenditure. As the current trend indicates an increase in health opportunities, strengthened human resources policies and availability at all levels will further improve health outcomes. The nature of the increase in the Government’s Health Sector should continue to emphasize primary healthcare to achieve UHC.


This article has demonstrated that the Indian health system is continuously evolving to address the needs of the citizens in response to the changing demographics, disease patterns, and policy reforms. The GoI is cognizant of the complexities involved in a growing range of contexts and is strengthening the Indian health system. Targeted actions have been made to address health equity, affordability, and accessibility challenges. A plethora of initiatives were planned and implemented by the GoI to achieve the goals of NHP 2017, UHC and target SDGs. This has also been reflected in the increased government expenditure on health which has aided the strengthening of health services contributing to substantial improvement in health indicators. In the last seven years, we have witnessed some major policy decisions driven by political support to drive substantial changes in the health sector. Given that the success of the political process is also dependent on the capacity of the systems, the designed interventions are made to prioritize linkages and strengthening of health systems to enable effective service delivery and improve health outcomes. The cognizance of the political leaders in India serves as an example of how timely decisions can be made in the policy process while being sensitive to the needs of the population. Fulfilling commitments through intense policy interventions has reflected the link between policy promises and implementation, building a strong relationship between the citizens and leadership.



Conflict of Interest Disclosures

The authors completed the ICMJE Unified Competing Interest form (available upon request from the corresponding author), and declare no conflicts of interest.


All authors participated in all stages of the manuscript preparation, provided critical feedback on the manuscript and have agreed to be accountable for all aspects of the work.


Erin Hannah, Knowledge Management Division, National Health Systems Resource Centre, Address: National Health Systems Resource Centre, NIHFW Campus, Munirka, New Delhi - 110067 Contact: