Ayushman Bharat outlay likely to cross Rs 10,000 crore as budget trend points to steady scale-up

Govt's coverage for Ayushmann has been expanding

Ayushman Bharat will likely receive another boost in the upcoming Union Budget, with the outlay for the Modi government's flagship healthcare programme poised to cross Rs 10,000 crore if recent spending patterns are anything to go by.

A Moneycontrol analysis of budget estimates (BE), revised estimates (RE) and actual expenditure shows that the health insurance programme has ended each year with spending converging towards — or exceeding — its revised estimates. This pattern has, in turn, prompted the government to raise allocations in subsequent budgets.

The budget for the financial year 2026-27 is expected in early February.

The scheme’s scale-up has been substantial. Actual spending rose from Rs 1,998 crore in FY19 to Rs 6,671 crore in FY24, more than a threefold increase.

Even in years when initial allocations were ambitious — particularly between FY20 and FY22 — revised estimates were pared to reflect implementation constraints, only for utilisation to strengthen in later years.

This narrowing gap between budgeted and actual spending has translated into higher headline allocations.

After being held at around Rs 6,400 crore for four consecutive years, the Budget outlay was raised to Rs 7,200 crore in FY24 and Rs 7,300 crore in FY25. For FY26, the Budget has already earmarked Rs 9,406 crore, pointing to the likelihood that actual expenditure could comfortably breach Rs 10,000 crore if current utilisation trends continue.

While aggregate spending has picked up, utilisation remains uneven.

Tamil Nadu tops the chart, with hospitalisations exceeding the number of Ayushman cards issued — implying repeat usage and a utilisation rate of 129 percent.

Kerala and Karnataka also report relatively high utilisation, reflecting stronger hospital empanelment and claims-processing capacity.

In contrast, several large states show weak conversion of coverage into actual hospitalisations. Uttar Pradesh, Madhya Pradesh and Bihar together account for more than 1.4 crore Ayushman cards, but utilisation rates remain below 15 percent. Maharashtra, despite issuing nearly 3.7 crore cards, reports a utilisation rate of just 7.4 percent.

Some of the lowest usage rates are seen in Odisha, Delhi, West Bengal and the island territories, pointing to persistent gaps in awareness, hospital onboarding or operational execution.

At the national level, more than 42.6 crore Ayushman cards have been issued, while total hospitalisations stand at about 9.9 crore, implying an overall utilisation rate of 23.3 percent.

With hospitalisation volumes continuing to grow and state onboarding improving gradually, fiscal space for Ayushman Bharat appears to be widening.

If patterns hold, the Rs 9,406 crore allocated for FY26 may once again prove conservative—strengthening expectations that Ayushman Bharat’s effective spending will cross the Rs 10,000-crore mark in the next fiscal year.

Ayushman Bharat provides an annual health cover of Rs 5 lakh each to the poor and vulnerable families. From this year, the benefit has been extended to all citizens aged above 70, regardless of their socio-economic status.