Reducing medical education costs will help make healthcare cheaper: Economic Survey

The Survey also said that the medical education landscape presents significant opportunities for the future and presents a more significant challenge to policymakers than any other field of professional education does.
Economic Survey 2024-25 highlights need for accessible and affordable medical education in India
Economic Survey 2024-25 highlights need for accessible and affordable medical education in India
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4 min read

New Delhi: The shortage of physician availability in India is no longer a "primary concern", but there is a need to make medical education more accessible and affordable for all, particularly for those from less privileged backgrounds, said the Economic Survey 2024-25. 

The Survey, tabled in the Parliament on Friday by Union Finance Minister Nirmala Sitharaman, states; "By reducing the cost of medical education, we can contribute to lowering healthcare service costs. If universal coverage is the goal, prioritising cost and equity in medical education will be key to achieving it."

Focusing on challenges to medical education, the Survey said that due to high fees, thousands of students go abroad yearly to around 50 countries, especially those with lower costs, such as China, Russia, Ukraine, the Philippines, and Bangladesh.

It also underlined concerns like more job opportunities in urban areas compared to rural areas, a shortage of specialists across specialities, remuneration, doctor migration, and the quality of medical education. 

The Survey also said that the medical education landscape presents significant opportunities for the future and presents a more significant challenge to policymakers than any other field of professional education does.

It highlighted the cost of medical education, stating that the National Medical Commission (NMC) had issued guidelines for determining fees and all other charges for 50 percent of seats in private medical institutions deemed to be universities.

"Despite such measures, fees remain high – at ₹60 lakh to one crore or more in the private sector, which holds 48 percent of MBBS seats," it said, adding that this drives thousands to seek medical education abroad where it is much cheaper. 

However, it said that medical education outside India entails hardships of studying abroad and productive years of youth invested in repeated attempts at exams—the NEET-UG before taking admission, the Foreign Medical Graduates (FMG) Exam after completing the course, and compulsory 12-month internships in India. 

"The subsequent regulatory issues in addressing the difficulties faced by FMGs and the need to maintain standards in allowing them to practice in India has been a challenge and has required interventions of the courts on more than one occasion." 

The low pass percentage of FMGs in the qualifying exam (16.65 per cent in 2023) indicates the sub-par quality of medical education abroad, including a lack of clinical training. "As policy intervention to dissuade medical education abroad is crafted, keeping costs in India within reasonable limits is essential," the Survey said.

It also raised concerns about geographically skewed opportunities for medical professionals—more medical colleges in the South and more job opportunities in urban areas.  

"By offering incentives, improving infrastructure, and fostering professional growth in these regions, we can attract and retain healthcare professionals, ensuring a more balanced and equitable distribution of doctors to strengthen public healthcare services nationwide."

The Survey also raised the skewed distribution of seats in favour of specialisations like radiology, dermatology, gynaecology, and cardiology, while specialities like psychiatry, geriatrics, etc., are neglected. It expressed concern that the current shortage of specialists across specialities will further aggravate streams that are currently not preferred but will be required in the future.

"The need for clinical practitioners does not restrict demand for post-graduate education; these doctors form the resource pool for research and development in advanced fields of medicine, pharmaceuticals, biotechnology, etc. They are also crucial as faculty and trainers of the next generation. While we focus on increasing specialisation facilities, it is also necessary to maintain distribution across geographies and streams."  

Market estimates indicate that the remuneration of fresh graduates is around ₹ 5 lakh, and senior doctors earn between ₹12.5 -18.4 lakh per annum in cities.

"This is almost similar or lower to the packages available to other entry-level graduates. As seen from the consistently increasing number of aspirants, the attraction towards the medical profession seems to arise more from the social status attached to it rather than its earning potential. This may mean that the availability of meaningful work and commensurate remuneration may reduce with the number of doctors available in the future. This would reinforce the migration of doctors from India into greener pastures," it said.

The OECD countries reported in 2021 that nearly 19,000 physicians from India were in their workforce, and migration in 2021 alone was over 2800 physicians.

"The trends in migration need to be factored in while incentives for service in the public health system are calibrated to ensure the availability of doctors in rural areas.

It said that the quality of education is directly related to the availability of qualified and experienced faculty and clinical exposure at the hospital.

"The granularity of regulations may appear necessary given that the medical profession deserves to be of the highest quality possible but also seem overbearing regarding associated compliance and monitoring costs. Despite the elaborate regulations and monitoring, issues like shortage of faculty, ghost faculty, low patient load in hospitals, etc., continue to affect the quality of training. There may be a need to revisit the incentive-disincentive and design of regulatory measures to improve compliance, reduce costs and prevent associated rent-seeking."

"The success of any policy, including regulatory ones, lies in its execution. If outcomes do not align with our goals or if there are unexpected effects, it is essential to take a step back and refine these policies to make them more meaningful and impactful," it stressed.

The Survey noted that the country's medical education ecosystem has significantly progressed. However, it said, there are exciting opportunities to enhance the system further and ensure it fully aligns with broader policy objectives.

"While the regulatory framework has made progress, there is an opportunity to evolve and keep pace with the dynamic needs of the healthcare sector."

It said that the number of candidates pursuing MBBS had increased consistently, from around 16 lakhs in 2019 to 24 lakhs in 2024. 

It also noted that since 2019, the number of medical colleges grew from 499 to 648 in the financial year 2023 to 780 in the year 2025, during which time the MBBS seats increased from 70,012 to 96,077 in 2023 to 1,18,137 in 2025, and post-graduate seats increased from 39,583 to 64,059 in 2023 to 73,157 in 2025.

As of July 2024, 13.86 lakh practitioners of modern medicine were registered, which translates into current availability for the country's whole population in the ratio of 1:1263.

The WHO standard norm of 1:1000 seems attainable by 2030, with a conservative 50,000 doctors licensed annually until 2030. "Thus, the numerical shortage of physician availability in India is perhaps no longer a primary concern. However, there are some larger concerns warranting attention."

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