The Insurance Regulatory and Development Authority of India (IRDAI) has made an official mission of “Insurance for All by 2047”, placing it within the government's broader Viksit Bharat plan. The aim is for every citizen to have appropriate life, health, and property cover, for every enterprise to be suitably insured, and for the sector itself to become globally attractive. To move from slogan to system, the regulator has allotted states and union territories to individual insurers. It has also begun assembling what it calls the Bima Trinity: Bima Sugam, a digital marketplace; Bima Vistaar, an affordable, bundled product; and Bima Vahak, a village-level distribution force. In September 2025, the government cut the eighteen per cent GST on individual life and health premiums to nil, a genuine and long-overdue nudge on affordability. And in December 2025, Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, allowing up to 100 per cent foreign direct investment in insurance companies, opening the doors for capital and technology.
The difficulty is that the baseline from which all this must climb has been moving in the wrong direction. According to IRDAI's annual report for 2024-25, overall insurance penetration remained stuck at 3.7 per cent of Gross Domestic Product (GDP), with life at 2.7 per cent and non-life at 1 per cent. It had peaked at 4.2 per cent during the Covid-19 pandemic in 2021-22 and has slipped every year since, with life insurance now in its third straight year of decline. The global average in 2024 was 7.3 per cent, so the distance is considerable. The often-cited aspiration of doubling penetration to eight per cent, therefore, asks the sector to reverse a trend before it can accelerate. Density tells the same story: USD 97 of premium per person against a world average of USD 943. Most telling, however, is that the life insurers issued 7.39 per cent fewer new individual policies during the year, even as premiums rose. The industry appears to be selling larger policies to those already inside the tent rather than bringing new households in.
For a blog concerned with how Indians pay for their health, the more consequential numbers sit in the National Health Accounts (NHA). The progress of the past decade was real. The share of out-of-pocket expenditure (OOPE) in total health spending fell from 62.6 per cent in 2014-15 to 39.4 per cent in 2021-22. Over the same span, the government's share rose from 29 to 48 per cent, and per capita government health spending nearly tripled. The composition also shifted, and the insurance-shaped portion grew fastest. Social security expenditure on health, which includes government-funded insurance and reimbursements, rose from about six per cent of the total to nearly 10 per cent, while the private health insurance share climbed from 3.4 to 9.2 per cent. India is already financing more of its health through pooled and pre-paid mechanisms rather than cash at the counter, which is precisely the transition the 2047 vision assumes.
Yet the most recent accounts, for 2022-23, temper the optimism: much of the earlier gain rested on emergency pandemic outlays that have since receded. OOPE edged back up to a little over 43 per cent, the government's share eased to about 44 per cent, and government health expenditure settled near 1.4 to 1.5 per cent of GDP. That is well short of the 2.5 per cent the National Health Policy of 2017 promised for 2025, a target now quietly missed. Two structural facts sit behind the shortfall. Health is largely a state subject, and about two-thirds of government health spending has historically been borne by the states rather than the union, so a centrally framed vision leans on fiscal capacity the centre does not fully control. The deeper ceiling is one I have written about before on this blog: a modest tax-to-GDP ratio leaves the exchequer little room to fund assurance at the scale universal coverage demands. In my centenary essay, I guessed that public health spending would breach two per cent only around 2030, and nothing in the current data convinces me to revise that upward. A promise of cover for all, resting on such a thin public base, is under strain from the outset.
Where the assurance leg has done real work is at the two ends of the age pyramid. As I noted in a recent post, the Ayushman Bharat scheme had by mid-2026 generated over 447 million cards and authorised nearly 127 million hospital admissions worth about 1,920 billion rupees, at an average of roughly Rs. 15,000 per admission. The extension of cover to every citizen aged seventy and above, through the Ayushman Vay Vandana card and without any income test, added close to ten million enrolments by the end of 2025. This is meaningful protection for the poorest half and the oldest cohort and deserves acknowledgement.
The unsolved problem lies where it always did, in the middle. The diagnosis by the National Institution for Transforming India (NITI) Aayog remains the sharpest framing of it. At least 30 per cent of the population, around 400 million people it called the missing middle, carry no financial protection for health at all. This is not a tidy income band. It spans every expenditure quintile and both town and country, from the informal self-employed to many semi-formal and formal urban workers. They sit between the tax-funded schemes below them and the private policies above, and they cannot simply be folded into the former. The subsidised and contributory products that already exist, whether Ayushman Bharat or the Employees' State Insurance Scheme (ESIC), are closed products. They are restricted to defined beneficiaries, precisely to guard against the adverse selection that opening them up would invite. The arithmetic of exclusion is unforgiving. A senior member of the same body noted in late 2025 that families spending Rs. 16,000 to Rs. 17,000 a month on essentials face annual premiums of Rs. 24,000 to Rs. 66,000 for cover comparable to Ayushman Bharat.
This is where feasibility is truly decided, and where I find the vision least convincing. NITI's own prescription leans on voluntary, contributory insurance sold mainly by private commercial insurers, an approach that has been fairly criticised for seeking universal coverage with few or no fiscal implications for the government. A voluntary pool aimed at a price-sensitive group invites the healthy to stay out and the unwell to buy in, and each round of that logic pushes premiums higher and coverage thinner. The friction policyholders already report does little for trust: health remains the fastest-growing segment, yet insurers processed some 32.6 million claims in the year and repudiated roughly 8.3 per cent of them. Some promising bridges are being built, including a plan to extend Ayushman Bharat to gig workers earning between Rs. 15,000 and Rs. 25,000 a month, and Bima Vistaar is built for exactly this segment. Both are promising, but neither is proven at the scale the target requires.
So, the honest assessment is mixed. The direction of policy is sound, and the instruments are, for the first time, reasonably coherent. Against that stand stubborn facts. Penetration is falling, not rising. The regulator has itself flagged mis-selling, and grievances rose by roughly 20 per cent, a trust deficit that corrodes any project built on voluntary uptake. Full foreign ownership brings capital, but capital has rarely been the binding constraint in reaching the informal sector, and without a matching answer on affordability, it may only sharpen competition for the well-insured few. Beneath it all runs the demographic clock I wrote about in 2022, an ageing population and a rising burden of non-communicable diseases that raise the cost of the promise as the window narrows.
A deadline is a useful discipline, and I would rather India aim at universal cover and fall a little short than never set the mark at all. Yet a deadline is not a plan. The ambition still has to withstand the realities of affordability, public trust, and a health budget that has yet to reach the level it requires. When 2047 arrives, this vision will not be judged by the number of cards issued or the platforms launched, but by whether the protection gap narrowed and OOPE kept falling. That is the version of 2047 I hoped for when I first imagined it, and on the current evidence, it remains ours to win or to lose.
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