India stands at a critical juncture in its journey toward becoming a developed nation by 2047, a vision encapsulated in the ambitious Viksit Bharat goal. A recent report by EY (Ernst & Young) underscores that to realize this dream, India must significantly ramp up its investments in two foundational sectors: healthcare and education. According to the report, the country should increase its healthcare spending to 3.8% of GDP and education spending to 6.5% of GDP over the next two decades. This strategic shift is deemed essential for building a robust, skilled, and healthy population capable of driving long-term economic growth and global competitiveness.
Why Healthcare and Education Are Key to Viksit Bharat Goal
The Viksit Bharat vision, championed by Prime Minister Narendra Modi, aims to transform India into a developed nation by its 100th year of independence in 2047. Achieving this requires a multi-pronged approach, with healthcare and education serving as the bedrock. The EY report highlights that India’s current spending on these sectors lags behind global benchmarks, particularly when compared to high-income nations and some peer economies.
- Healthcare Spending: India currently allocates approximately 2.1% of its GDP to healthcare, significantly lower than the 5-6% average in high-income countries. The EY report suggests increasing this to 3.8% to strengthen healthcare infrastructure, improve access to quality services, and address pressing public health challenges like non-communicable diseases and maternal mortality.
- Education Spending: On the education front, India spends around 4.6% of its GDP, below the 5-6.5% seen in countries like South Africa and the Euro area. EY recommends a hike to 6.5% to enhance educational outcomes, boost skill development, and prepare the workforce for a rapidly evolving global economy.
A well-educated and healthy population is not just a social imperative but an economic necessity. These investments are expected to yield a skilled labor force, reduce healthcare burdens, and elevate India’s per capita income to the $14,000 threshold required for developed-nation status.
Current Challenges in Healthcare and Education
India’s healthcare and education sectors face systemic challenges that hinder progress toward the Viksit Bharat goal:
- Healthcare Gaps: Despite initiatives like Ayushman Bharat, access to quality healthcare remains uneven, particularly in rural areas. Underfunding has led to shortages of medical professionals, inadequate infrastructure, and high out-of-pocket expenses for citizens.
- Education Disparities: While India has made strides in improving literacy rates, the quality of education, especially in public schools, remains a concern. Dropout rates, teacher shortages, and a lack of focus on vocational training further compound the issue.
The EY report emphasizes that bridging these gaps requires sustained financial commitment. For instance, to match high-income countries, India’s per capita education spending needs to rise sevenfold by 2048—a daunting but achievable target with strategic planning.
Economic Benefits of Increased Spending
Investing in healthcare and education is not just about social welfare—it’s a proven driver of economic growth. The report outlines several benefits:
- Boosting GDP Growth: A healthier workforce translates to higher productivity, while a skilled population attracts investment and innovation. The report aligns with projections that India’s economy could grow by 27% if women’s labor participation increases, a goal tied to better education and health outcomes.
- Reducing Inequality: Enhanced spending can narrow regional and socio-economic disparities, ensuring inclusive growth—a key pillar of Viksit Bharat.
- Global Competitiveness: With a young population and expanding workforce, India has a demographic advantage. Channeling resources into education and healthcare will position the country as a leader in technology, manufacturing, and services.
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Government Initiatives and the Road Ahead
The Indian government has already taken steps toward strengthening these sectors. The 2025 Union Budget prioritized green initiatives alongside growth, while schemes like “Make in India” and “Atmanirbhar Bharat” aim to bolster domestic capabilities. However, the EY report calls for a more aggressive push:
- Healthcare: Expanding the network of Health and Wellness Centres (HWCs) and increasing insurance coverage under Ayushman Bharat are critical. The report also advocates for public-private partnerships to accelerate infrastructure development.
- Education: Raising teacher salaries, modernizing curricula, and integrating digital learning tools can elevate educational standards. The focus should also shift toward skill-based training to meet future job demands.
To fund these increases, India may need to improve tax buoyancy—maintaining a range of 1.2-1.5—as suggested by earlier EY analyses. This would ensure fiscal discipline while supporting ambitious spending targets.
Global Context and Comparisons
When compared to peer nations, India’s spending shortfall becomes evident. South Africa allocates over 5% of its GDP to education, while the Euro area averages 6.55%. In healthcare, countries like Brazil and China outpace India, with allocations closer to 4-5% of GDP. To achieve Viksit Bharat, India must not only catch up but surpass these benchmarks to account for its unique demographic and economic challenges.
Conclusion: A Call to Action
The EY report serves as a clarion call for India to prioritize healthcare and education as non-negotiable investments in its future. Raising spending to 3.8% and 6.5% of GDP respectively is a bold yet necessary step to unlock the country’s potential. As India navigates heatwaves, economic shifts, and global competition in 2025, these sectors will determine whether the Viksit Bharat goal remains a dream or becomes a reality.
