Wednesday, 10 Dec, 2025
By: Yash Gupte
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At the global level, about 42 percent of total health expenditure is financed through household out-of-pocket expenditure (OOPE), India is one of the worst defaulters and is ranked 15th out of 188 countries in terms of high out-of-pocket expenditure on health. Image Source: IANS
India has the lowest share of elderly receiving monetary support one of the highest share in health-related expenses post-retirement
A couple of months ago, United Nations had released a report revealing that the population of India will overtake that of China by 2023, far earlier than initially estimated by demography experts. India Tracker did a 3-part series on the possible impact of excess population on our country. The first part talked about its repercussions on resources, in the next we analysed its impact on the women labour force participation, while in the third we examined if India has a realistic chance of a demographic dividend. In this piece, we will talk about how excess population is going to be double whammy on our socio-economic structure.
Going by the UN report, the share of Indians aged 25-64 is projected to peak by 2037, and then start declining by 2052, while the share of the population aged more than 65 is expected to have risen. Although, India won't be the only country to face this, given most countries in the world are either going through the change or are going to see such a change in the near future.
However, unlike other economies, India has the lowest share of elderly receiving monetary support one of the highest share in health-related expenses post-retirement.
At the global level, about 42 percent of total health expenditure is financed through household out-of-pocket expenditure (OOPE), India is one of the worst defaulters and is ranked 15th out of 188 countries in terms of high out-of-pocket expenditure on health. In total, Indians spend over $72 billion a year, paying for health and medical bills that are not covered by their health insurance. It continues to be the single biggest reason for Indians to fall below the poverty line every year.
One of the reasons why OOPE remains high is the low coverage of funding schemes. According to the recent report on State of Inequality in India, 85.9 percent of people from rural parts are not covered under any health scheme, and 80 percent in urban cities. As much as 83.7 percent of rural household income and savings, among the lowest 1st quintile class based on household expenditure, are directed towards health expenditure at hospitalisation. In urban, for the lowest 1st quintile, 80.3 percent of household savings and income is used to finance hospital expenses.
The lack of an income in old age can make a critical difference to many elderly, and can deny the vulnerable many years of their life. However, in India, leaving aside government employees and a minuscule percentage of others, pension benefits are denied to all elderly citizens. Only about 10 percent of senior citizens in India have a regular and adequate post-retirement age income. Further, 25 to 30 percent of others get inadequate benefits. And, about 60 to 65 percent of people get no retirement benefits at all.
With this future in mind, it is essential that our policy framework and social responses are geared to meet this reality. By 2050, every fifth Indian will be above the age of 60. The question really is: can India ensure sustainable financial protection and dignity for its 104 million elderly by the time this demographic transition is complete? The task is difficult, but not impossible.
