The Union Health Ministry has told the Supreme Court that federal rules enabling the central government to set rate bands for medical procedures are constitutionally sound and essential to ensure healthcare remains affordable.
In a counter-affidavit submitted on August 4, the central government defended Rule 9(ii) of the Clinical Establishments (Central Government) Rules, 2012 against a batch of legal petitions challenging its validity. The provision requires registered healthcare facilities to charge for services within a price range established by the Centre in consultation with state authorities.
Constitutional Mandate and Fair Pricing
The government stated that the 2012 rules, framed under the Clinical Establishments (Registration and Regulation) Act, 2010, fulfill the state’s obligation under Article 47 of the Constitution to enhance public health. According to the affidavit, the regulation aims to prevent medical costs from becoming exorbitantly high for ordinary citizens while ensuring rates remain sufficient to encourage industry growth and service improvement.
The Health Ministry asserted that establishing operational standards for healthcare establishments naturally encompasses regulating the cost of those services. It argued that legislation setting facility standards can legitimately incorporate mechanisms to determine corresponding price bands.
Rejection of Constitutional Challenges
Dismissing claims that the rule violates fundamental rights under Articles 14, 19(1)(g), and 21, the Centre argued that medical establishments cannot be categorized alongside routine commercial enterprises. It emphasized that while financial viability is important, the government holds the authority to ensure provider returns remain reasonable. The affidavit noted that the right to operate a clinical facility is subject to reasonable public-interest restrictions under Article 19(6).
The Centre further clarified that the law does not enforce rigid, uniform pricing across all facilities. Instead, it creates a flexible rate spectrum allowing establishments to calibrate charges based on infrastructure quality, service standards, and local demographics.
Drawing parallels with other regulated sectors, the affidavit highlighted existing price control frameworks in India, including capitation fee limits in professional colleges, drug price caps in the pharmaceutical industry, and Maximum Retail Price regulations under the Legal Metrology Act.
State Jurisdiction and Implementation Status
Because health is a state subject under the Constitution, the central law applies only to states and union territories that formally adopt it under Article 252(1). The Centre noted that its role is limited to formulating standards and guidelines, while state administrations handle local implementation and enforcement.
Currently, 19 states and union territories have adopted the central statute, including Bihar, Jharkhand, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Sikkim, Rajasthan, Mizoram, Uttar Pradesh, Assam, Haryana, Telangana, Puducherry, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands, Chandigarh, Lakshadweep, Jammu and Kashmir, and Ladakh.
Meanwhile, 16 states and one union territory—Andhra Pradesh, Maharashtra, Madhya Pradesh, Punjab, Odisha, West Bengal, Chhattisgarh, Tamil Nadu, Meghalaya, Kerala, Karnataka, Manipur, Nagaland, Tripura, Gujarat, Goa, and the National Capital Territory of Delhi—enforce their own individual healthcare regulations.
Following directives from the Supreme Court, the Union Health Secretary has held consultative meetings with state and union territory officials to address implementation concerns and finalize a concrete operational proposal for Rule 9(ii).
