Study ahead of Budget 2026 urges sharper rise in India’s public healthcare spending amid rising costs and inequality

Budget-season debate shifts to health spending and affordability

As India heads toward the Union Budget 2026-27, new academic research has renewed calls for a stronger increase in public healthcare expenditure. The study, cited in a report published on 26 January 2026, warns that rapid economic and social change is pushing up medical costs and widening inequality in access to treatment—concerns that keep resurfacing in India’s health policy discussions.

The research referenced is titled “Impact of Determinants of Healthcare Expenditure in India: The ARDL Bounds Testing Approach” and examines national data across a long time horizon, covering the period from 1991 to 2023. By using decades of data, the authors aim to identify which macro and social factors most consistently influence both overall health spending and how much households must pay directly out of pocket.

According to the report’s summary of findings, the study analyses drivers of healthcare expenditure including per-capita income, secondary education enrolment, urbanisation, inflation, life expectancy and per-capita health spending. These variables, it says, have significant long-term influence on both overall per-capita spending and household out-of-pocket payments.

Why public spending is central to the access question

The research is being discussed in the context of Budget 2026-27 because public allocations can influence the affordability of essential services, the expansion of government facilities and the extent to which households rely on direct payments in private settings. When out-of-pocket spending is high, families are more exposed to financial shocks from illness, and access to timely care can become uneven across income groups.

Budget decisions also affect health system capacity in indirect ways: investment in staff, infrastructure and primary care can reduce pressure on tertiary hospitals over time, while targeted public programmes can encourage preventive screening and earlier diagnosis. The study’s core argument, as reflected in the report, is that without a sharper public spending push, rising costs and disparities could intensify.

The report frames the Budget 2026-27 moment as an opportunity: a higher public spend could help offset cost pressures and reduce inequality in access to care.

• Study period analysed: 1991–2023
• Key focus: per-capita expenditure and household out-of-pocket payments
• Drivers examined: income, education, urbanisation, inflation, life expectancy and health spending
• Policy relevance: cited in the run-up to Union Budget 2026-27