India is still described as one of the world’s youngest major economies, with nearly two-thirds of its people under the age of 35. While this is an advantage, the picture is slowly changing, and by 2046, the country is projected to have more people aged 60, which is why a recent signal from Kerala is worth a note.
Last month, when Kerala announced its revised Budget 2026-27, it had an important monitorable for the health care industry: a comprehensive Silver Economic Policy incorporating eldercare services, retirement infrastructure and innovations in geriatric health care. At first glance, it may appear to be a state-specific initiative, given that Kerala has 20.7% of its population aged 60 and above (according to the NFHS-6 data released in May 2026). But this might be a precursor to the future of health care in India, with estimates suggesting that by 2036, India will have approximately 230 million people aged 60 and above, making it home to the world’s largest elderly population.
This, along with the fact that India’s Total Fertility Rate has fallen below the replacement rate for the first time, while life expectancy continues to improve, marks an important demographic transition which will shape the future of health care. The current health care investment cycle has largely focused on a younger India, with much of the investment directed towards hospital capacity expansion and bed additions. However, the future health care system will have to serve an entirely different India–one that is older, living longer, and increasingly managing chronic diseases over decades rather than weeks. The real health care demand of the next two decades is likely to emerge outside hospital walls, with increased demand for ambulatory, palliative and longitudinal care, which is increasingly centred on managing chronic conditions.
Unlike an acute illness, a chronic disease is rarely something a hospital admission can solve. For instance, an elderly diabetic patient may require a series of endocrinology consultations, periodic diagnostics, retinal screening, cardiovascular monitoring, physiotherapy, and medication adjustments over several years. A cancer patient may undergo rounds of chemotherapy and continue to require follow-up care, infusion therapy, imaging, and rehabilitation long after active treatment concludes. Similarly, a kidney patient may need dialysis multiple times each month. This is precisely why ambulatory care is becoming increasingly important.
Ambulatory care offers several structural advantages in addressing the needs of an ageing population. It improves accessibility by bringing care closer to patients, enhances affordability by reducing dependence on inpatient settings, and improves health care system efficiency by reserving hospital beds for complex and critical cases while shifting lower-acuity interventions to outpatient and day-care settings. A bigger issue concerns households with people aged 60 and above, where out-of-pocket payments may still constitute a significant share of India’s health spending. For diseases managed over years, inpatient visits can further strain resources. As per estimates, nearly 40 crore Indians, also called the ‘missing middle’, still lack any health cover, meaning the population most likely to need longitudinal care is the least protected against its cost.
India’s epidemiological profile has already begun reflecting this transition. India’s Economic Survey 2025-26 highlighted that outpatient care has overtaken hospital treatment as the primary channel of health care delivery, with patient volumes in primary care, preventive screenings and digital consultations running several times higher than inpatient admissions. The survey also noted that health care utilisation is increasingly driven by chronic conditions requiring repeated interactions rather than one-time hospitalisations.
The need is clear: India must begin shifting health care investment beyond hospital capacity towards ambulatory care, chronic disease pathways and integrated care models now by leveraging the expertise of international health care partners that have already navigated similar demographic shifts. The urgency is evident from India’s changing disease burden with non-communicable diseases like cardiovascular disorders, obesity, diabetes, cancer, autoimmune conditions, etc now accounting for the majority of health care utilisation and spending in India.
Acknowledging this shift, finance minister Nirmala Sitharaman announced the ₹10,000 crore Biopharma Shakti initiative in Budget 2026, highlighting the growing burden of chronic diseases such as diabetes, cancer and autoimmune disorders as a national health care priority. However, addressing this challenge will require more than public spending. It will also require a fundamental shift in private health care infrastructure towards technology-enabled care, ambulatory networks, and integrated chronic disease management models.
While the shift has been slow; early signs are visible in the health care sector with hospitals looking to move closer to patients rather than expecting patients to travel to large tertiary centres. Leading health care providers such as IHH Health care-backed Fortis are expanding their footprint beyond metros through brownfield capacity additions and a greater presence across Tier I and Tier II cities, reflecting a broader shift towards decentralised health care delivery. This likely reflects lessons from global operators like IHH which have seen the same trend playing out across Singapore, Malaysia and Shanghai, where a rising share of care has moved out of large city hospitals into ambulatory centres, day-care facilities, home-care services and digital platforms. Health care groups with experience across these markets, such as IHH, bring the advantage of having operated in ageing societies for decades, combining hospitals with ambulatory networks, digital health and integrated care pathways.
(The views expressed are personal)
This article is authored by Dr Deva H Puranam, fellow, Royal Society of Medicine, managing principal, P&A Group.
