What is theme all about?
This theme is about riding the growth story of healthcare in India. Healthcare comprises of pharmaceuticals, hospitals, medical devices, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by government as well as the population.
What are macro-economic factors, policy changes driving this trend?
The healthcare sector is expected to grow further given:-
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Increasing per capita income,
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Increasing health insurance
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Government initiatives like Ayushman Bharat-National Health Protection Mission, Pradhan Mantri Jan Arogya Yojana (PMJAY) to provide better healthcare is leading to increasing spends on healthcare.
Why is this theme attractive now?
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The per capita government spending on healthcare has nearly doubled from Rs. 1,008 per person in FY15 to Rs. 1,944 in FY20, but is still low. Healthcare market in India is expected to reach US$ 372 billion by 2022 from US$ 110 billion in 2016.
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India has traditionally spent less on health, 90% of government expenditure being on the revenue side. Over the last 5 years, the total public expenditure on health has risen at 15% CAGR, much of this due to pay hikes.
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Despite of all this, India’s total healthcare spending is at 3.6% of GDP, and is way lower than that of the other countries. The US (16.9%), Germany (11.2%), France (11.2%) and Japan (10.9%)—spend even more. Also, India spends the least among BRICS countries: Brazil spends the most (9.2%), followed by South Africa (8.1%), Russia (5.3%), China (5%).
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In India, there is one doctor for every 1,457 people as per the country's current population estimate of 1.35 billion, which is lower than the WHO norm of 1:1000. Hence, there is headroom of growth in medical education and other employment opportunities in this sector.
What industries/ sectors benefit from this?
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India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. The sector is expected to grow to US$ 100 billion, while medical device market is expected to grow US$ 25 billion by 2025.
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The hospital industry in India, is observing a huge investor demand from both global as well as domestic investors. The hospital industry is expected to reach $132 billion by 2023 from $ 61.8 billion in 2017; growing at a CAGR of 16-17%.
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The diagnostics industry in India is presently estimated at a value of $4 billion. The share of organized sector is almost 25% in this section (15% in labs and 10% in radiology). The players from organized sector are poised to gain market share from unorganised market.
Themes: Consumption | Digital India | Arogya India | Budget 2021-22 | Currency Sensitive | Financialization | Grameen Bharat | Growth | Infrastructure | Leisure India | Transportation and Logistics
