Non-communicable diseases (NCDs) are the leading global cause of death and disproportionately concentrate among those living in low-income and middle-income countries. However, its economic impact on households remains less well known in the Indian context. This study aims to assess the economic impact of NCDs in terms of out-of-pocket expenditure (OOPE) and its catastrophic impact on NCDs affected households in India.

Data were collected from the 75^th round of the National Sample Survey Office, Government of India, conducted in the year 2017–18. This is the latest round of data available on health, which constitutes a sample of 113,823 households. The collection of data is based on a stratified multi-stage sampling method. Generalised Linear Regression model was employed to identify the socio-economic covariates associated with the catastrophic health expenditure (CHE) on hospitalisation.

The result shows a higher burden of OOPE on NCDs affected households. The mean expenditure by NCDs households in public hospitals is INR 13,170 which is more than twice as compared to the non-NCDs households INR 6,245. Particularly, the proportion of total medical expenditure incurred on medicines (0.39) and diagnostics (0.15) is troublesome for households with NCDs, treated in public hospitals. Moreover, results from the generalised linear regression model confirm the significant relationship between CHE with residence, caste, religion, household size, and economic status of households. The intensity of CHE is more for the households who are poor, drinking unsafe water, using firewood as cooking fuel, and household size of 1–5 members.

Therefore, an urgent need for a prevention strategy should be made by the government to protect households from the economic burden of NCDs. Specifically, to reduce the burden of CHE associated with NCDs, a customised disease-specific health insurance package should be introduced by the government of India in both public and private facilities.