On World Health Day 2026, India has 70 crore people enrolled in health insurance and 37 million stunted children. These two facts are not unrelated.

In October 2021, while working on what would become the Oxfam India Inequality Report 2022, I spent an afternoon with the first tranche of NFHS-5 factsheets. The numbers were from 22 states and five union territories, and they documented a geography of deprivation that matched India's poverty map almost exactly. In Bihar, 42.9% of children under five were stunted. In Uttar Pradesh, 39.7%. Anaemia among children aged 6–59 months had risen — not fallen — compared to the previous survey. I was there to document inequality, and the malnutrition data did so with precision.

What was harder to explain was a parallel set of numbers. At that point, the National Health Mission had been running for seventeen years. The Rashtriya Swasthya Bima Yojana has been operational in Bihar since 2008. The state had received central health transfers for decades. The children in NFHS-5 were born to mothers who, on paper, lived in a country with extensive public health coverage. The schemes were real. The malnutrition was also real.

This essay is about the gap between India's health architecture, as described in scheme documents and press releases, and its health outcomes, as recorded by its own surveys. It is specifically about two programmes. PMJAY, the Pradhan Mantri Jan Arogya Yojana, claims to cover 70 crore people with hospitalisation insurance and is regularly cited as evidence of India's health transformation. POSHAN 2.0, the umbrella nutrition programme, serves 8 crore children and 1 crore pregnant and lactating women, funded at less than half of what its own implementing agencies estimate is necessary. Both programmes generate coverage statistics. Neither has demonstrably shifted the health outcomes they were designed to address.

What 70 Crore Enrolled Beneficiaries Actually Means

The Pradhan Mantri Jan Arogya Yojana covers, by the government's count, approximately 70 crore people — nearly half the country. The headline figure is derived by multiplying 12 crore eligible families (expanded from the original SECC 2011 base to include NFSA households, and again in October 2024 to include all citizens above 70 years of age) by an average household size of around 4.5. As of March 2025, 36.9 crore Ayushman cards had been issued. A Rajya Sabha reply tabled in December 2025 cited 42.31 crore cards as of October 2025 — reflecting card issuance in the seven months between the two counts.

Against this enrollment, 2.02 crore claims worth ₹28,732 crore were settled between April and October 2024 — the first seven months of FY2024-25. Cumulatively, since its launch in September 2018, the total number of authorised hospitalisations stands at around 8.9 crore. In any given year, roughly 4-5% of cardholders actually receive treatment. A community-based study in rural Puducherry found that only 2.01% of BPL beneficiaries had used PMJAY. A cross-sectional study from Mysuru found that only 37.4% of eligible beneficiaries even possessed an Ayushman card.

The gap between enrollment and use is structural, not accidental. The scheme covers inpatient hospitalisation under 1,961 treatment packages up to ₹5 lakh per family per year. It does not cover outpatient consultations, medicines prescribed outside hospital admission, routine diagnostics, or primary health centre visits. This exclusion matters because a substantial majority of India's out-of-pocket health spending comes from outpatient care — principally medicines purchased at private pharmacies. As Sakthivel Selvaraj, Habib Hasan Farooqui, and Anup Karan documented in BMJ Open (2018), medicines are the primary driver of OOP spending for India's poor, not hospitalisation. PMJAY was designed around the wrong problem.

The hospital network that underpins the scheme consists of approximately 30,957 empanelled facilities — roughly 17,000 public and 14,000 private. Private hospitals constitute 46% of empanelled facilities but account for 64% of hospitalisations and receive 69% of total claim payouts (NHA Annual Report 2024-25). The scheme designed to protect people with low incomes from health care costs has, in fiscal terms, become primarily a public subsidy to private hospital chains. High-margin procedures — general surgery, orthopaedics, cataract operations — flow to private providers. Complicated tertiary care, such as medical oncology and cardiothoracic surgery, remains overwhelmingly provided in public institutions.

What the CAG Found

CAG Report No. 11 of 2023, the first performance audit of PMJAY covering September 2018 to March 2021, reads as a systematic account of database fraud enabled by weak verification systems. The auditors found 7,49,820 beneficiaries linked to a single invalid mobile number — 9999999999. A further 9.85 lakh beneficiaries were registered under the single-digit "3". In Tamil Nadu, 4,761 registrations were made against just 7 Aadhaar numbers. Across multiple states, the CAG found 43,197 households with recorded family sizes ranging from 11 to 201 members.

The most disturbing finding: despite 88,760 patient deaths being recorded in the Transaction Management System during the audit period, 2,14,923 subsequent claims were settled for treatments of these same beneficiaries. The CAG documented ₹6.97 crore paid for the treatment of 3,446 patients already recorded as deceased. It found 78,396 claims from 48,387 patients with overlapping hospital stays — meaning treatment was billed during periods when beneficiaries were simultaneously recorded as hospitalised elsewhere. By 2025, over 1,000 hospitals had been de-empanelled and ₹231 crore in penalties levied, though enforcement remains inconsistent.

The fraud enabled by PMJAY's design is not incidental. The scheme provides financial incentives to hospitals for procedures performed and minimal accountability for outcomes. It has no gatekeeping mechanism — no requirement that a beneficiary first consult a primary care provider before accessing specialist hospitalisation. It does not require follow-up, rehabilitation, or continuity of care. The result is a system that pays for procedures while creating conditions under which unnecessary procedures are financially rational for empanelled providers.

What the Peer-Reviewed Evidence Concludes

The academic literature on PMJAY has reached conclusions that are considerably less optimistic than the government's press releases. Samir Garg, Kirtti Kumar Bebarta, and Narayan Tripathi published a four-year follow-up study in BMC Health Services Research (2024) based on household surveys in Chhattisgarh. Their finding: PMJAY enrolment had no statistically significant effect on reducing out-of-pocket expenditure or catastrophic health expenditure, particularly for private hospital care, where out-of-pocket costs remained approximately ten times higher than at public facilities. Among PMJAY-enrolled individuals using private hospitals, 78.1% in 2021 and 70.9% in 2022 incurred catastrophic health expenditure at the 10% consumption threshold.

This finding mirrors the trajectory of PMJAY's predecessor. Anup Karan, Winnie Yip, and Ajay Mahal, writing in Social Science & Medicine (2017), demonstrated that the Rashtriya Swasthya Bima Yojana had a limited impact on reducing OOP expenditure despite genuine expansion in hospitalisation coverage. The 17-fold increase in coverage limit from RSBY's ₹30,000 to PMJAY's ₹5,00,000 changed the headline number without addressing the underlying dynamic: poor households encountering illness face costs that extend well beyond the hospitalisation event, and those costs are precisely what insurance does not cover.

India's National Health Accounts for 2021-22 report out-of-pocket expenditure declining to 39.4% of total health expenditure, down from 62.6% in 2014-15. The government presents this as evidence that PMJAY is working. Three caveats are necessary. First, much of the 2020-22 improvement in the government expenditure share was COVID-driven — a temporary surge that may not persist in subsequent NHA releases. Second, the NHA's OOPE figures for recent years are extrapolated from the NSS 75th Round (2017-18), adjusted for inflation, rather than from a fresh household expenditure survey, meaning the apparent decline has not been independently verified against actual household spending. Third, WHO's evidence-based benchmark for effective financial protection is OOP below 15–20% of total health expenditure. India's reported 39.4%, if accurate, remains nearly double the upper threshold.

The System That Was Never Built

PMJAY's architecture rests on a primary care foundation that, in most of India, does not exist. Over 61% of India's deaths are caused by non-communicable diseases — diabetes, hypertension, cardiovascular disease, cancer — all of which require regular outpatient management, diagnostic monitoring, and medication adherence that fall entirely outside PMJAY's hospitalisation-only coverage. The scheme covers the crisis event while leaving the chronic management that would prevent it completely unfunded.

The government's answer was the Ayushman Arogya Mandir programme, formerly Health and Wellness Centres, which targeted 1,50,000 upgraded primary care facilities by the end of 2022. As of July 2025, 1,78,154 AAMs had been operationalised — numerically exceeding the target. But "operationalised" is a classification that obscures severe quality deficits. AAM sub-health centres are supposed to stock 106 essential medicines and 14 diagnostic tests. Whether these are consistently available is not systematically reported. The centres are led by Community Health Officers — AYUSH graduates or nursing diploma holders — rather than physicians. The NCD services component showed utilisation at only 47% of allocated funds in FY2024-25.

Behind the primary care gap lies a deeper structural collapse. India has 0.5 hospital beds per 1,000 population against the National Health Policy 2017 target of 2.0. The specialist doctor shortfall at Community Health Centres stands at 79.9% — of 21,964 specialists required across 5,491 rural CHCs, only 4,413 are in position. Only 541 of 5,480 CHCs (9.9%) have all four mandated specialists. Less than 45% of Primary Health Centres function around the clock. This shortfall has worsened since 2005, despite a doubling of medical college seats.

The National Health Mission, the vehicle for public health infrastructure, has stagnated in real terms. Allocations rose from approximately ₹33,800 crore in 2019-20 to ₹39,390 crore in 2026-27 — a 16% nominal increase over seven years against cumulative CPI inflation of 35-40%. In 2022-23, the ₹37,000 crore Budget Estimate was slashed to a Revised Estimate of ₹29,085 crore. Meanwhile PMJAY's allocation rose steadily to ₹9,500 crore in 2026-27, with consistent increases even as utilisation rates remained low. The average annual PMJAY expenditure between 2019-20 and 2022-23 was ₹3,796 crore against an average allocation of ₹6,403 crore. Money flowed to the insurance scheme even as it sat underutilised, while the primary care system that would require sustained operational funding went without.

The Lancet Citizens' Commission on a Citizen-Centred Health System for India, published in January 2026 and co-chaired by Vikram Patel, Gagandeep Kang, and Kiran Mazumdar-Shaw, identified the insurance-led financing model as a barrier that "discourages integrated care" and "rewards fragmented, procedure-based interventions rather than long-term health outcomes." K. Sujatha Rao, former Union Health Secretary, concluded in Do We Care? India's Health System (Oxford University Press, 2017) states that less than 10% of health facilities below the district level meet even the minimal Indian Public Health Standards. Amartya Sen, writing in the foreword to Healers or Predators? (2018) called it an "amazing neglect of primary healthcare" combined with a "hasty and premature reliance on private healthcare." These are not minority positions. They represent the consensus across two decades of India-focused health systems research.

As I have argued elsewhere at policygrounds. press, the Indian state has consistently chosen what is legible over what is effective — schemes that generate beneficiary counts over investments in institutions that work quietly and require sustained political will across election cycles.

The 37 Million Stunted Children

The National Family Health Survey-5, conducted 2019-21, found that 35.5% of India's children under five are stunted, 19.3% are wasted, and 32.1% are underweight. The UN's SOFI 2025 confirms 18.7% child wasting in India — the highest rate in the world, surpassing every country in Sub-Saharan Africa. In absolute numbers, 37.4 million stunted Indian children constitute the largest single national cohort of chronically malnourished children anywhere in the world. India ranked 102nd of 127 countries on the Global Hunger Index 2025.

The NFHS-4 to NFHS-5 comparison (2015-16 to 2019-21) shows progress on some indicators and regression on others. Stunting fell by 2.9 percentage points (from 38.4% to 35.5%); wasting by 1.7 points (from 21.0% to 19.3%). But severe acute malnutrition worsened, from 7.5% to 7.7%. Anaemia among children aged 6-59 months surged from 58.6% to 67.1% — an increase of 8.5 percentage points in four years, occurring in parallel with the government's declared ODF status. Anaemia among women of reproductive age rose from 53.1% to 57.0%. Thirteen states and union territories saw increases in stunting rates. The worst-performing states — Meghalaya at 46.5%, Bihar at 42.9%, Uttar Pradesh at 39.7% — are also India's poorest.

The comparison with Bangladesh matters and should be stated plainly. At comparable per capita income levels, Bangladesh's child wasting rate as of its 2022 Demographic and Health Survey is approximately 11% — well below India's 19.3%. Bangladesh's life expectancy exceeds India's by several years. These outcomes were achieved not through a hospitalisation insurance scheme but through a network of community health workers providing doorstep delivery of preventive care.

Open Defecation and the Biology of Stunting

The most important analytical contribution to understanding India's malnutrition paradox comes from Dean Spears, who, with Diane Coffey, has systematically documented why Indian children are shorter than children in poorer African countries with comparable incomes.

The mechanism is environmental enteric dysfunction — chronic subclinical gut inflammation caused by repeated exposure to faecal pathogens that reduces nutrient absorption even when food intake is adequate. Spears demonstrated in the Journal of Development Economics (2020) that reweighting Indian children to match African levels of open defecation exposure statistically eliminates the height gap between the two populations. In an ecological analysis across 112 Indian districts with Ghosh and Cumming (PLoS ONE, 2013), a 10-percentage-point increase in open defecation was associated with a 0.7-percentage-point increase in stunting, and open defecation exposure explained 35-55% of the variation in district-level stunting. Across 140 Demographic and Health Surveys from 65 countries, open defecation per square kilometre explains approximately 64% of the variation in child height.

India declared itself Open Defecation Free on 2 October 2019 after constructing over 119 million household latrines under the Swachh Bharat Mission. The WHO/UNICEF JMP 2025 update estimates that the national open defecation rate has declined to approximately 7%. But a 2023 peer-reviewed study using NFHS-5 data found that, as of 2021, over 238 million people still lacked access to a toilet. Coffey and Spears' SQUAT survey found that over 40% of households with a working latrine still had at least one member defecating in the open — a finding rooted in caste-based purity norms around who is permitted to clean latrines, not poverty. ODF certification was issued based on infrastructure construction, not behaviour change. The NFHS-5 increase in anaemia — occurring precisely during the period when India was claiming ODF status — suggests the faecal-oral transmission pathway has not been broken.

POSHAN 2.0: The Numbers Behind the Mission

Mission Saksham Anganwadi and POSHAN 2.0, launched in 2021-22, merged ICDS Anganwadi Services, the Supplementary Nutrition Programme, POSHAN Abhiyaan, and the Scheme for Adolescent Girls into one umbrella programme serving over 8 crore children and 1 crore pregnant and lactating women. The Union Budget 2026-27 allocated ₹23,100 crore to the combined scheme.

An IFPRI costing study estimated that delivering core nutrition-specific interventions at scale requires approximately ₹48,440 crore annually at 2022-23 prices. The current allocation is less than half of what adequate coverage demands. Of India's approximately 13.97 lakh Anganwadi centres, the government targeted upgrading 2 lakh to Saksham Anganwadis. By July 2025, approximately 57,000 had been upgraded — less than a third of the target. A Telangana infrastructure survey found 41% of Anganwadi centres lacked electricity, 32.5% had no toilets, and 16.8% had no drinking water.

The CAG's Gujarat performance audit of ICDS, tabled in March 2025, found a shortage of 16,045 Anganwadi centres in the state, only 86% of enrolled beneficiaries receiving supplementary nutrition, none of the centres meeting the specified 600 square foot covered area requirement, and ₹242.39 crore in grants remaining unspent across seven of eight selected districts. The POSHAN Tracker — the government's real-time monitoring platform — reports malnutrition rates that are 12-14 percentage points lower than NFHS-5 for wasting and underweight.

A peer-reviewed analysis published in 2024 attributes the gap primarily to reporting and measurement bias: workers collecting data they are incentivised to improve, and the Tracker systematically excludes children who are not registered at or attending Anganwadis — precisely the most malnourished children who are least likely to be enrolled. Anganwadi workers, required to manage up to 17 physical registers alongside the digital app, have staged protests across India over the data entry burden. The government engaged the World Bank to evaluate the validity of Tracker data in 2023. Results have not been published.

The Fiscal Architecture and What It Reveals

India's National Health Accounts for 2021-22 report total health expenditure at 3.83% of GDP, with government health expenditure at 1.84% of GDP. The National Health Policy 2017 set a target of 2.5% of GDP by 2025. India has missed this target by approximately 0.6 percentage points — requiring a roughly 30% increase in the GDP share of government health spending. The Union Budget 2026-27 allocated ₹1,06,530 crore to the Ministry of Health and Family Welfare — the first time the health budget crossed ₹1 lakh crore. It constitutes 2% of the total Union Budget. Per capita central government health spending comes to roughly ₹745 per person per year — approximately ₹2 per day.

The WHO evidence-based benchmark for countries moving toward Universal Health Coverage is government health expenditure of at least 5% of GDP. India is at 1.84%. As I have documented in the analysis of India's fiscal architecture at policygrounds.press, the headline number routinely obscures the gap between the budget estimate and the revised estimate, and the revised estimates have consistently come in below what was announced.

Health is a State List subject, with the Centre operating through NHM (60:40 cost-sharing) and PMJAY. The Centre's share of health transfers for Centrally Sponsored Schemes fell from 75.9% in 2014-15 to 43% in 2024-25. West Bengal remains the only state not participating in PMJAY, running its own Swasthya Sathi scheme. Delhi and Odisha joined PMJAY in April 2025. That coverage expansion has tracked political alignment as much as public health logic is itself a form of evidence. As I have written elsewhere on policygrounds. press about India's fiscal federalism and its consequences for social spending, the incentive structure between the Centre and states on health has long produced announced ambition and uneven delivery.

What the Evidence Supports

India does have partial bright spots. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana has expanded to approximately 17,990 stores as of late 2025, selling generic drugs at 50-90% below branded prices, with consumer savings exceeding ₹8,000 crore in 2024-25. The Employees' State Insurance Corporation covers approximately 14.44 crore workers through 165 hospitals and 1,418 dispensaries — a functioning model of contributory social insurance that predates PMJAY by six decades and offers something PMJAY does not: genuine network integration between facilities and enrolled populations.

The Lancet Commission proposed a rights-based, citizen-centred model with stronger public provision, community participation, and a shift from procedure-based to outcome-based payment. Its recommendations for India are specific: raise government health expenditure to at least 2.5% of GDP immediately and 5% over a decade; make the ASHA and Anganwadi worker the foundation of a genuine community health system rather than a data collection instrument; establish primary care as the mandatory gateway for PMJAY hospitalisation; and replace the current fragmented scheme architecture with a National Health Service that covers primary care as the baseline entitlement.

The POSHAN agenda has a simpler diagnosis. Full funding of POSHAN 2.0 at the IFPRI-estimated ₹48,440 crore would cost roughly five times the current allocation and roughly half of what India spends on PMJAY combined. Complementary investment in functioning rural sanitation — not latrine construction targets, but the behaviour change programmes that address the caste dynamics Coffey and Spears documented — would address the faecal-oral transmission pathway linking open defecation to stunting. The evidence base for both interventions, from India's own surveys and from the peer-reviewed literature, is clear. The constraint is not knowledge. It is an allocation.

The System We Have Chosen

When NFHS-6 data is eventually released, it will be collected against a backdrop of Ayushman Bharat having issued over 40 crore cards and processed 9-plus crore hospitalisations over seven years. If the trajectory of the previous two NFHS cycles holds — a slow reduction in stunting, worsening anaemia, POSHAN Tracker reporting figures 12-14 percentage points below survey results — India will still have more stunted children than any other country, and its wasting rate will remain the world's highest.

PMJAY issues cards to 70 crore people and delivers treatment to 4-5% annually. POSHAN 2.0 receives less than half of its estimated funding requirement, while its monitoring system reports malnutrition rates far below those found in national surveys. NHM allocations stagnate in real terms while specialist vacancies at rural CHCs exceed 80%. The government health expenditure target set in India's own 2017 National Health Policy remains unmet in 2026. These are not separate failures. They are the coherent outcome of a consistent set of choices: to fund what is visible over what is effective, to count coverage over measuring care, to announce universal health rather than build the systems that would deliver it.

The Lancet Commission called it "a crisis of design, not capacity." India has the fiscal capacity to spend 2.5% of GDP on government health, as its own policy requires. It has the administrative infrastructure to fund an Anganwadi system at the levels IFPRI estimates are necessary. It has the NHM as a vehicle for primary care investment. The choices made have been different: ₹9,500 crore for PMJAY hospitalisation claims in 2026-27, against ₹39,390 crore for an NHM that was cut midyear in 2022-23 from ₹37,000 crore to ₹29,085 crore. What those numbers describe is a state that has chosen insurance over nutrition, announcement over delivery, the legible over the effective.

The NFHS-5 tables I worked through in October 2021 were, among other things, a record of choices made in the preceding decade. When the NFHS-6 tables arrive, they will record the choices being made now.

Varna Sri Raman is a development economist who writes at policygrounds.press.

Further Reading

On PMJAY: coverage, utilisation, and financial protection

1. Garg, Bebarta, Tripathi — "PMJAY after four years of implementation" (BMC Health Services Research, 2024)

2. Karan, Yip, Mahal — "Extending health insurance to the poor in India: RSBY impact on OOP" (Social Science & Medicine, 2017)

3. CAG Report No. 11 of 2023 — Performance Audit of PMJAY

4. National Health Accounts 2021-22 (PIB)

5. Brookings — Early lessons from India's health insurance scheme

6. Selvaraj, Farooqui, Karan — medicines as primary driver of OOP (BMJ Open, 2018)

On child malnutrition, POSHAN 2.0, and open defecation

1. NFHS-5 India Factsheet (Ministry of Health and Family Welfare)

2. Spears — "Exposure to open defecation can account for the Indian enigma of child height" (Journal of Development Economics, 2020)

3. Spears, Ghosh, Cumming — "Open defecation and childhood stunting in India" (PLoS ONE, 2013)

4. Coffey, Spears — Where India Goes: Abandoned Toilets, Stunted Development, and the Costs of Caste (HarperCollins India, 2017)

5. ORF — Strengthening POSHAN Abhiyaan: Priorities for Budget 2026

6. CAG Report on ICDS, Gujarat (tabled March 2025)

On India's health system architecture and reform

1. Lancet Citizens' Commission on a Citizen-Centred Health System for India (2026)

2. Sujatha Rao — Do We Care? India's Health System (Oxford University Press, 2017)

3. Lancet Global Health — "Public financing for primary health care is the key to UHC" (2022)

4. PRS Legislative Research — Demand for Grants 2025-26: Health and Family Welfare