A new report from McKinsey & Co says India’s medical sector is on track to become the fastest growing in the world over the next decade.
McKinsey India has calculated India’s total healthcare sector will be worth $2.4 trillion by 2021.
The report, ” India’s Healthcare Sector 2025: The Numbers”, estimates India’s economy will grow at 4.4% annually by 2021, compared to the current annual growth rate of 3.5%.
India’s current GDP is estimated at $12.3 trillion.
McKinseys research predicts the healthcare sector in India will grow from $3.6 trillion in 2020 to $4.6 billion by 2021 and reach $5.2 trillion by 2025.
India’s gross domestic product will grow by 5.4%, up from 4.3% this year, the McKinsey report says.
The McKinsey analysis, which includes data on the cost of healthcare services, shows that India’s hospitals, clinics and clinics will be the main beneficiaries of healthcare reforms.
The healthcare sector is the fastest-growing sector in the Indian economy, with the country expected to reach $2 trillion worth of goods and services by 2021 according to McKinsey’s estimates.
The new growth in healthcare, which McKinsey says is likely to exceed that of the financial sector by 2025, will help the country reduce the health expenditure of a population of over 7 billion people by up to $300 billion by the end of the decade, the report says, citing McKinsey research.
The growth of healthcare is driven by India’s ageing population, which is expected to increase by 5% per year by 2030.
India has one of the highest birth rates in the region.
The report says the healthcare reforms in India have been slow to materialise, but that the government has been working to address the underlying issues.
India will need to tackle the problems that are preventing people from reaching their potential in health and will need significant investment to do so, the study says.
In addition to improving healthcare services and improving access to health care, the country needs to improve infrastructure and make the country more attractive for foreign investment, the paper said.
The study predicts that the healthcare reform process will take five years to achieve its full implementation, while the healthcare expenditure is expected be between $1.5 trillion and $2 billion per year in 2021.
The economic impact of healthcare in India is expected at about $1 trillion by the time the reforms are implemented, according to the McKinseys report.
India is the second-fastest growing economy in the Asia Pacific region after China.