How Much Do Indian Households Spend on Healthcare Every Month?

Haryana spend 2.4 times the national average, and the highest among all states and union territories (UTs) on healthcare while Assam the lowest.

Indian households spent over Rs 120 billion on healthcare-related expenditure in November 2022, estimates based on data from the Centre for Monitoring Indian Economy’s Consumer Pyramids Household Survey (CMIE-CPHS) suggest. Urban India accounted for 42.3% of the total healthcare-related expenditure in this period, while the remaining 57.7% of the expenditure came from rural India.

CMIE-CPHS is a continuous fast-frequency survey conducted on sample consisting of 178,677 households and over 875,000 household members as of 2022. The survey includes expenditure incurred by households on medicines, doctors, hospitalisations, health insurance, medical tests, medical aids, and health enhancement services under healthcare-related expenditure.



Health enhancement services, which include fitness services, hygiene products, parlours and spas, accounted for the largest share of healthcare expenditure at 45.5%. Medicines came in next and accounted for 42.3% of all expenditure on health. The CPHS estimates 6.7% of the Indian population to be taking regular medication, with this share being higher in older age groups.

Doctors’/physiotherapists’ fees accounted for 5.6%, while health insurance premium made up 2% of all healthcare-related expenditure. There was no major relative gap between the trends for most categories of expenses among rural and urban areas, except health insurance premiums, where the share was 3.6% in urban areas, and just 0.8% in rural areas.


The average Indian household spent Rs 3,632 on healthcare-related expenditure in FY 2018. This increased marginally to Rs 3,638 in FY 2022. However, as Figure 3 shows, this is due to the fluctuations in the expenditure caused in the interim which includes the pandemic years. While on average households reported a 23.3% increase in spending on health between FY 2018 and FY 2019, there was a marginal drop of 0.5% in the subsequent year. Reported spending on healthcare dropped by 29.8% in FY 2021, the first year of the Covid-19 pandemic, before increasing by 16.3% in FY 2022.

Looking at monthly spending reveals that the total money spent on healthcare by households saw the sharpest decline in Apr 2020, when the country was under a stringent lockdown brought in to check the spread of the Covid-19 pandemic. From over Rs 94 billion in February 2020, healthcare expenditure declined to Rs 79.3 billion in March, and then plunged to Rs 43.8 billion in April, the first full month when the country was locked down.

Spending across different components of healthcare was impacted. While expenditure on medicines decreased by almost 19% in April 2020 compared to March, expenditure on health enhancement services dropped by 66.4% in the same time period.

Since April 2020, healthcare expenditure has largely been on an upward trend and witnessed a small spike in April 2021, when India saw a fatal wave of Covid-19 that infected millions, leaving behind a trail of destruction. The total estimated expenditure on healthcare increased from RS 97.9 billion in March 2021 to Rs 104.5 billion in April  2021, with expenditure on medicines, doctor fees, hospital charges and medical tests driving this increase.

It is important to note that some of these trends could be an outcome of possible confounding effects, and the numbers need to be read with context: on the one hand, for many, healthcare expenditure increased due to Covid-19 related illness, on the other hand, many individuals had to defer non-essential procedures during the pandemic. 2020 was an extraordinary year – lockdowns led to reduced mobility, and the year saw reduced air pollution and fewer accidental deaths. As the pandemic began to recede, while Covid-19 related expenditure could have fallen, expenditure on deferred treatments could have contributed to the increase in healthcare-related expenditure.

Household expenditure also varied by income groups. Rural households with monthly income under Rs 8,000 spent Rs 304 on average on healthcare in Nov 2022, while those in the highest income group with a monthly income above Rs 80,000 spent Rs 447 in the same month.

Among urban households, this difference was much wider. Those earning less than Rs 8,000 per month spent an average amount of Rs 344 on health and the richest households spent an average amount of Rs 1,275 in the same period.

Additionally, there was significant variation in healthcare expenditure by state. Households in Haryana spent Rs 873 on healthcare on average in Nov 2022 – 2.4 times the national average, and the highest among all states and union territories (UTs) surveyed by CPHS. On the other hand, households in Assam spent Rs 223 on healthcare in this period, the least among all states and UTs.

There was also some variation in the share of household expenditure that was incurred on health. In Tripura, healthcare-related expenditure comprised 5.3% of the total household expenditure in Nov 2022, followed by Haryana and Goa where it comprised 4.4% and 3.9% respectively. On the other end of the spectrum was Rajasthan, where health expenditure made up only 1.3% of the total household expenditure,  followed by Jammu and Kashmir where healthcare-related expenditure accounted for 1.5%, and Jharkhand where this share was 1.6% in the same period.

India’s healthcare industry was estimated to reach USD 372 billion in 2022, as per a report of the NITI Aayog published in 2021. Healthcare had emerged as one of the largest sectors of the Indian economy, both in terms of employment generation and revenue, the report had noted.

However, as CEDA has noted previously, government spending on healthcare remains low in India as compared to global standards, resulting in high reliance on the private sector and high proportions of out-of-pocket expenditures by households. Almost 55% of all expenditure on health in India is financed out-of-pocket, data compiled by the World Bank (as of 2019) shows. This was significantly higher than the global average of 18% in the same year.

This article was originally published by CEDA.