According to a latest report by McKinsey, driven by strong local demand, Indian healthcare market is expected to continue growing close to previously projected rates of 10 to 12 per cent. With average household consumption expected to increase by more than seven per cent per annum, the annual healthcare expenditure is projected to grow at 10 per cent and also the number of insured is likely to jump from 100 million to 220 million.

Health insurance has emerged as one of the fastest growing segments in the non-life insurance industry, registering 30 percent growth in 2008-09.

India needs an investment of US$ 14.4 billion in the healthcare sector by 2025, to increase its bed density to at least two per thousand population, as per a FICCI-Ernst and Young report.

The sector has been attracting huge investments from domestic players as well as financial investors and private equity (PE) firms. The government, along with participation from the private sector, is planning to invest US$ 1 billion to US$ 2 billion in an effort to make India one of the top five global pharmaceutical innovation hubs by 2020.

Healthcare major, Fortis Hospitals plans to invest US$ 55 million, to expand its facilities pan-India.

The fast growth in the Indian healthcare sector has created various pockets of opportunities for investors.

Notwithstanding the current economic slowdown, the US$ 2.26 billion Indian wellness services market is expected to grow at about 30-35 per cent for the next five years on the back of rising consumerism, globalisation and changing lifestyles, according to a FICCI-Ernst and Young study.

This can be seen from the launch of the National Rural Health Mission (NRHM) in 2005 that aims to provide quality healthcare for all and increase the expenditure on healthcare from 0.9 per cent of GDP to 2-3 per cent of GDP by 2012.

The announcement of a US$ 63.2 million initiative by the Government will help to promote domestic manufacture of medical devices such as stents, catheters, heart valves and orthopaedic implants that will lead to lower prices of these critical equipments.

According to a report by Biz India Magazine, India’s Healthcare Sector is on the top of the list to create 2,95,000 jobs among 1 million new jobs in 2010 in 11 fields, followed by the hospitality sector generating 1,37,000 jobs.

According to a report, India’s healthcare sector is projected to grow at 23% annually to become a $77-billion industry.

Healthcare services sector includes firms that are dependent upon and provide corollary services to hospitals, and is currently approximated at $1 billion. According to Yes Bank and Assocham, diagnostics would add $2.5 billion to the healthcare industry by 2012.

"Driven by various catalysts such as increasing population, rising income levels, changing demographics and illness profile, the healthcare industry is expected to move to levels of $77 billion in the next three years," said Assocham President Swati Piramal.

The Road Ahead

Healthcare is a fast-growing sector which is developing at a very fast pace. People are becoming health conscious and are demanding better quality healthcare measures. Many hospitals have been formed for the purpose of providing quality healthcare to the people. Huge investments are being made in R&D which has led to development of new and better life saving drugs and equipments.

The government has reduced certain duties, which has brought down the cost of various drugs and equipments. There has been a constant focus by the government on the development of the healthcare sector.

Even various pharmaceutical companies have contributed to develop and provide better quality drugs. Various steps are being taken to develop the healthcare sector.

The future of this sector looks bright and promising. Both, the government and private sector enterprises are joining hands to boost the Indian healthcare sector. Overall, the prospects appear very bright and reflect the old adage 'health is wealth'.

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