Transformative changes in India’s health sector are critical in achieving the goal of Viksit Bharat towards making the country a developed nation by 2047. The country developing a robust healthcare system to provide affordable and easily accessible healthcare services over the next two decades will be crucial to ensure the country stays on course to realise the ambitious vision. The Parliamentary Standing Committee on Health and Family Welfare has sounded the caution that with the current pace of increase in government health expenditure, 2025 may not be sufficient to achieve the goal set under the National Health Policy (NHP) of increasing GHE to 2.5% of GDP by 2025. Official data estimates the GHE to be 1.84% of GDP in 2021-22, according to National Health Account Estimates released in September 2024. A clearer picture will emerge only after data for the period from the 2022-23 financial year till 2024-25 are released. The parliamentary panel, however, expressed concern that except for 2023-24, the actual expenditure has remained below the Revised Estimates (RE), which itself is already lower than the Budget Estimates (BE) for the health budget of the central government. The committee points out that while there has been a 10.83% increase in the BE for 2025-26 as compared to the RE for 2024-25, the health sector’s budget allocation, as a percentage of GDP and the total Union Budget, has been consistently declining since 2022-23. The committee in 2022-23 recommended raising the GHE to 5% of GDP by 2025 but found that achieving even the NHP target of 2.5% by this target deadline “seems a distant dream.” Over the past five years, it has been observed that the demand projected by the Department of Health and Family Welfare has been consistently low and has declined significantly compared to the 2021-22 level, the report of the parliamentary panel highlights, which calls for the attention of the policymakers to undertake necessary review to set new priorities. The parliamentary panel insists that public health plays a crucial role in driving the country’s economic development and recommends that given the inadequacy and overstretched nature of public health infrastructure, investments in the health sector must be increased. Observations of the committee drive home the point that rushing to a conclusion about the adequacy of progress made so far or a significant increase in a particular year’s health budget for propelling the country towards having a completely developed healthcare system aligned with the Viksit Bharat goal could be erroneous and misleading. A pragmatic approach on the part of the government will be to acknowledge the resource gap and strive to reduce it through allocation of more budgetary resources towards GHE and impressing upon the states to increase their health budget, keeping in mind the transformative changes that will be required over the next two decades. The committee notes a substantial reduction in out-of-pocket expenditure following the expansion of social security benefits and extending the benefits of various schemes to wider sections of the population deprived of basic amenities but expresses the view that even the reduced OOPE is still high and is a significant barrier to accessing quality healthcare for the vast majority of people in the country deprived of basic amenities. Another critical gap in increasing health expenditures of the states observed by the panel is very low disbursal and poor utilisation of funds approved by the 15th Finance Commission for the state. While the disbursal was as low as 39.4% till January 30, 2025, the utilisation of released funds also was less than 60%. Finance Commission grants are awarded to meet shortfalls of states for addressing basic needs of people, and the alarming gap speaks volumes about the state lacking capacity for timely utilisation of funds. The Committee strongly recommends that the central government conduct a comprehensive study to determine the underlying causes of such underutilisation and implement measures to resolve these issues. Apart from the establishment of a dedicated communication channel with the States to facilitate continuous dialogue and ensure timely and effective resolution of challenges, thereby optimising the utilisation of these critical funds for primary healthcare as recommended by the panel, States undertaking their own initiatives to increase capacity for fund utilisation will be crucial to bringing about a transformative change. The COVID-19 pandemic crisis exposed the serious gap that existed in the country to handle health emergencies, but the healthcare sector continues to grapple with poor fund utilisation even when available funds remain inadequate to meet overall goals in the sector, which is baffling and is reflective of a failure to learn the lessons from the pandemic experience. Significant progress made in terms of the creation of health infrastructure through the establishment of government hospitals, diagnostic services, the establishment of new medical colleges, the application of digital solutions, etc., cannot be overlooked. However, as pointed out by the parliamentary panel, there is no room for complacency, as the yawning gap between goals and achievement is a stark reality.