India's health care challenge is commonly framed around inadequate capacity, rising costs and unequal access. While all three are real concerns, there is another issue that receives far less attention: The cumulative impact of excessive regulation.
Health care is among the most heavily regulated sectors in India. Recent industry assessments indicate that nearly 24% of regulations applicable to the sector are healthcare-specific, while close to 60% are decentralised across states and local jurisdictions, creating significant complexity in implementation and compliance. For a health care organisation operating across India, this translates into more than 29,000 annual compliance tasks, including over 1,400 licence, approval and registration-related requirements. Adding to the challenge, nearly 25-30% of compliance requirements undergo changes every year, creating a constantly evolving regulatory environment.
The consequences extend far beyond compliance.
Every unnecessary approval delays investment. Every outdated restriction raises the cost of expansion. Every barrier to entry discourages fresh participation. Management bandwidth that should be spent on improving patient care, adopting new technologies or expanding capacity is often diverted towards navigating regulatory processes. Ultimately, patients bear the burden through capacity shortages, limited choices and higher costs.
This is why the government's decision to remove longstanding height restrictions on hospitals under the National Building Construction Standards (NBCS) 2026 deserves greater attention than it has received. While the reform may appear to be a technical amendment to building regulations, it is actually an important example of how smart deregulation can unlock investment, strengthen competition, improve access and create healthcare capacity at scale. The revised standards remove the previous height restrictions that constrained hospital expansion, enabling facilities to utilise existing infrastructure more efficiently while maintaining safety requirements. The NBCS reform therefore addresses a real structural challenge faced by the sector.
{{/usCountry}}This is why the government's decision to remove longstanding height restrictions on hospitals under the National Building Construction Standards (NBCS) 2026 deserves greater attention than it has received. While the reform may appear to be a technical amendment to building regulations, it is actually an important example of how smart deregulation can unlock investment, strengthen competition, improve access and create healthcare capacity at scale. The revised standards remove the previous height restrictions that constrained hospital expansion, enabling facilities to utilise existing infrastructure more efficiently while maintaining safety requirements. The NBCS reform therefore addresses a real structural challenge faced by the sector.
{{/usCountry}}More importantly, it signals a broader shift in thinking.
India does not suffer from a shortage of demand for health care. It suffers from a shortage of capacity.
The country's health care ambitions will require more hospitals, more speciality centres, more diagnostics providers, more technology innovators, more healthcare entrepreneurs and more investors willing to enter the sector. However, when entry and expansion become excessively burdensome, participation inevitably suffers.
This is where competition becomes critical.
Competition is often viewed narrowly in health care discussions. In reality, competition is one of the strongest drivers of quality, innovation and affordability. When more providers participate, patients gain greater choice. When more health care organisations compete, quality becomes a differentiator. Providers invest in better technologies, improve patient experience, strengthen clinical outcomes and pursue operational efficiencies. Innovation reaches patients faster.
Conversely, when barriers to entry become too high, competition weakens.
The result is fewer providers, slower expansion, delayed technology adoption and persistent capacity shortages. Regions that are already underserved remain dependent on a handful of metropolitan centres. Patients continue to travel long distances for care. Costs remain elevated because supply struggles to keep pace with growing demand.
The health care sector needs more competition, not less.
It needs more specialised oncology providers. More dialysis operators. More diagnostic chains. More health care technology companies. More PPP-led service providers. More investors willing to deploy capital into health care infrastructure. Most importantly, it needs regulations that encourage participation rather than inadvertently discouraging it.
The NBCS reform should be viewed through exactly this lens.
Hospitals already possess land, utilities, transportation access, support services and established clinical ecosystems. What they have often lacked is the flexibility to maximise these assets. By enabling vertical expansion, hospitals can add beds, intensive care capacity, dialysis centres, oncology units, day-care chemotherapy facilities, diagnostics infrastructure and other specialty services without requiring entirely new campuses.
This has important implications for both cost and speed.
Developing a greenfield hospital requires significant capital, land acquisition, multiple approvals and long construction timelines. Expanding within an existing campus is substantially more efficient. Existing hospitals already have power infrastructure, roads, water systems, waste management facilities, support services and patient footfall.
The implications for public health care infrastructure are particularly significant.
Government hospitals across India already possess valuable physical assets and serve millions of patients every year. Vertical expansion creates opportunities to leverage these assets far more effectively while attracting private sector participation through innovative Public-Private Partnership (PPP) models.
Additional floors can house dialysis centres, oncology facilities, advanced diagnostics hubs, chemotherapy units and centres of excellence. Private partners can bring capital, technology, equipment and operational expertise, while public institutions provide existing infrastructure and patient reach. Rather than building entirely new facilities, health care capacity can be expanded quickly and efficiently within existing ecosystems.
The ultimate beneficiary is the patient.
Today, many patients from smaller cities and regions such as the North-East continue to travel to Delhi, Mumbai or Chennai for specialised care. In many cases, the challenge is not a lack of clinical expertise but a lack of infrastructure capable of supporting specialised services.
If capacity can be expanded rapidly through easier infrastructure development and PPP-led investments, advanced care can increasingly move closer to where patients live. Instead of patients travelling to healthcare hubs, healthcare capacity can move towards patients.
This is particularly important for services such as dialysis, oncology, chemotherapy and other speciality treatments that require repeated visits and long treatment cycles.
The broader lesson extends beyond hospital infrastructure.
The NBCS reform demonstrates how a single regulatory change can unlock multiple benefits simultaneously greater capacity, lower costs, increased investment, stronger competition and improved access. It also highlights an important truth: Expanding health care capacity is not always about creating entirely new infrastructure. Sometimes it is about removing barriers that prevent existing infrastructure from being utilised effectively.
India's health care ambitions cannot be fulfilled through public expenditure alone. Public expenditure will continue to play a major role. Public health is of course the core and must remain so. But they also need to be supported by an enabling environment that welcomes investment, rewards innovation and encourages new participants to enter the sector. They require regulation that protects patients without deterring entrepreneurship. And they require policy reforms that recognise competition as an ally in improving health care. But bottom line must be affordable health care.
After all, sustainable health care growth is not only about how much we spend. It is also about how effectively we allow growth, innovation and competition to flourish.
(The views expressed are personal)
This article is authored by CK Mishra, former health secretary, Government of India.