Global Economy

Expanding Ayushman Bharat to cost Centre ₹2,000 crore per year


The expansion of the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) health coverage to all citizens over 70 years of age will involve central outgo of nearly ₹2,000 crore per annum, said people with knowledge of the matter.

In keeping with the ongoing PMJAY scheme, the funding will be in the ratio of 60:40 for the Centre and states, respectively. The ratio is 90:10 for the north-eastern states and three Himalayan states and Union Territories.

The government’s allocation for the flagship universal health coverage scheme was increased in the budget for 2024-25 to ₹7,300 crore from the revised estimate of ₹6,800 crore for the financial year.

It is not yet clear if this would suffice to absorb the additional cost for increased central share on account of the latest extension of the scheme to senior citizens.

For now, however, the government has yet to accept the other expansion proposal to double the health coverage to ₹10 lakh which could increase the overall cost to the exchequer considerably.


On Wednesday, the Union cabinet approved the health coverage to all senior citizens in the country aged 70 years and above irrespective of income under the flagship scheme. It is expected to benefit about 45 million families – with 60 million senior citizens – with free health insurance cover of ₹5 lakh per family per annum.An electoral promise that figured prominently in the BJP’s manifesto ahead of the Lok Sabha polls, the expanded AB-PMJAY could, however, spark political controversy over central funding.

Expanding Ayushman Bharat to Cost Centre ₹2,000 Cr Per Year

At present, about a dozen states are already giving a range of health coverage benefits to senior citizens over 70 years of age, at their own cost. The latest expansion of AB-PMJAY will allow them the opportunity to get 60:40 fund sharing, with the Centre footing a larger share of the bill.

This process, however, will involve merging the component with the centrally sponsored scheme and adopting its rulebooks and nomenclature, which underlines the central role.

The Centre is unlikely to allow separation of the expanded scope of the scheme – health coverage for those above 70 years of age – as an independent scheme, according to the people cited earlier.

Several such schemes have run into rough weather, especially in the opposition-ruled states, on account of political messaging.

A case in point is Tamil Nadu’s continued wrangling with the Union education ministry over the PM SHRI model school scheme tied up with Samagra Shiksha funding. Similar instances have been seen in West Bengal and Punjab, among other states.

The original AB PM-JAY scheme also took time to scale up for similar reasons.



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