Economic Survey 2025 advocates deregulation in health and education sectors

Regulatory institutions in the areas of health and education must constantly balance “needs of the society and that of the ease of provision of services,” and there is a need for deregulation so that private players can bring in efficiency, the Economic Survey 2025 noted.

This is in line with the larger theme of deregulation that CEA V Anantha Nageswaran mentioned.

It added that where the market, primarily indicating private players, “can do an effective job,” the regulations can “either be withdrawn” or compliances made “voluntary with disclosure”.

Tight regulations increase the compliance and supervision burden on State capacity that is already stretched and as a result “it gives rise to unfulfilled expectations” on the part of the public.

Therefore, for India to “receive the demographic dividend in full in the coming years, regulatory institutions need to evolve” with a focus on “allowing outcomes to happen without being fixated on inputs”.

The Survey pushes for a “trust-based regulation backed up by transparency and disclosure” in these sectors pointing out that the “regulated deserves a chance”.

Regulators, in fact, have been asked to develop their own assessment parameters; and report “on their own effectiveness transparently”.

Push for NEP

The Survey notes that National Education Policy (NEP 2020), “visualises a paradigm shift in the Indian higher education system” and envisages autonomy for institutions to innovate.

It recognises that ‘regulation of higher education has been too heavy-handed for decades…’ and that the ‘regulatory system is in need of a complete overhaul in order to re-energise the higher education sector and enable it to thrive’. Towards this end, the NEP suggests several institutional reforms.

“It asks that regulation must be light-but-tight, and aimed at financial probity and good governance. Regulation must also ensure transparency of key aspects in the functioning of a university ....,” it said.

Government health expenditure up

“In the Total Health Expenditure of the country between FY15 and FY22, the share of government health expenditure(GHE) has increased from 29.0 per cent to 48.0 per cent. During the same period, the share of out-of-pocket expenditure in Total Health Expenditure declined from 62.6 per cent to 39.4 per cent,” indicating success of government run insurance schemes, the Survey noted.

It mentioned that data of GHE and health outcomes based on OECD countries shows that health expenditures, economic growth(GDP) and healthcare provision (number of doctors), reduce infant mortality while positively impacting life expectancy.

Health expenditures have increased worldwide as it has in India too.

The latest National Health Accounts statistics for 2021-22, released in September 2024, said, the Total Health Expenditure in FY22 is estimated to be ₹9,04,461 crore (3.8 per cent of GDP and ₹6,602 per capita at current prices). The Total Health Expenditure per capita (at constant prices) has shown an increasing trend since FY19, it noted.

Out of the Total Health Expenditure, the current health expenditure is ₹7,89,760 crore (87.3 per cent), and capital expenditure is ₹1,14,701 crore (12.7 per cent).

“An increase in the share of capital expenditure in Total Health Expenditure from 6.3 per cent in FY16 to 12.7 per cent in FY22 is a positive sign as it will lead to broader and better health infrastructure,” it noted.

It also pointed out that government health insurance schemes constitute a 5.87 per cent share in healthcare financing schemes, out of which social insurance schemes have a 3.24 per cent share; and the government-supported voluntary insurance schemes have a 2.63 per cent share.