Union Budget 2025-26- Healthcare sector

The Union Budget 2025-26 has the following budgetary allocations to health sector (INR in Crs).

Other announcements on Health sector made in Budget 2025-26:

Strengthening Cancer Care

A plan to establish 200 Day Care Cancer Centres in district hospitals across India, with the aim to expand to all districts within three years. These centers will provide cancer treatment, early diagnosis, and post-care services closer to rural populations, reducing the need for patients to travel long distances to major cities. These centers represent a critical move toward making Cancer care more accessible and affordable for millions of Indians. By decentralizing cancer care, the government aims to save lives while easing the financial strain on patients and their families.

 broadband connectivity (Bharat Net) will be provided to all primary health centers in rural areas, further improving access to healthcare services and educational resources in underserved regions.

A key provision in the Budget is the exemption of Basic Customs Duty (BCD) on 36 life-saving drugs, which will make essential medicines more affordable and accessible to people in need. Additionally, 37 medicines and 13 new drugs will remain BCD-free when provided through Patient Assistance Programs, ensuring that they remain affordable to vulnerable populations.

“Our government has added almost 1.1 lakh undergraduate and postgraduate medical education seats in 10 years, an increase of 130%. In the next year, 10,000 additional seats will be added in medical colleges and hospitals towards the goal of adding 75,000 seats in the next five years.” Said Finance Minister Ms. Nirmala Sitaraman.  This initiative is expected to address the growing gap between doctors and patients at the macro level. However, the shortage of doctors in rural areas needs to be addressed with specific policy interventions for a long-term solution and unfortunately the budget is silent on this point.

Extending Healthcare Coverage to Gig Workers

A significant step in this year’s budget is the extension of healthcare coverage to gig workers—an often-overlooked segment of the workforce. Through the Pradhan Mantri Jan Arogya Yojana (PM-JAY), the government will now provide healthcare benefits to 1 crore gig workers. These workers, who have traditionally been excluded from formal health benefits, will now receive the same healthcare security as other formal-sector employees.

Saksham Anganwadi and POSHAN 2.0

The Saksham Anganwadi and POSHAN 2.0 provides an integrated nutrition support programme to more than 8 crore children, 1 crore pregnant women and lactating mothers all over the country, and about 20 lakh adolescent girls in aspirational districts and the north-east region. The key objectives of the POSHAN 2.0 programme are to contribute to the country’s human capital development, address the ongoing challenges of malnutrition, promote nutrition awareness, and encourage good eating habits for sustainable health and well-being.

Though, Healthcare spending in India has witnessed an incremental rise in the last decade, yet it continues to fall short of the National Health Policy (2017) recommendation that public health expenditure should account for 2.5 per cent of Gross Domestic Product (GDP) by 2025. (21-22- 1.84%, 23-24 -1.9%).

NHP 2017,  envisioned two-thirds of the health budget being directed towards primary healthcare. Instead, this proportion remains at around 40 percent, indicating government’s preference for tertiary care investments such as AIIMS over strengthening preventive and primary healthcare—which according to experts is against global best practices.

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) received an allocation of INR 9,406 crore,  around a 29 percent increase from last year’s budget, while the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) was granted INR 4,200 crore, marking a 40 percent increase from the previous year. The hike in above budgetary allocations is in line with the recent expansion of PMJAY to include all 70+ population and the focus on tertiary infrastructure.

Unfortunately, there is no major announcement regarding public-private partnerships (PPPs) to enhance medical education in Tier-2 and Tier-3 cities.

INR 2445 Crs allocated for the Production Linked Incentive Scheme (PLI Scheme) to boost pharmaceutical and MedTech manufacturing.

Status of achievement of the major targets of NHP 2017: 

• NHP 2017 aims to ensure availability of 2 beds per 1000 population to enable access within golden hour (achieved 0.79 beds per 1000 population). It proposes to increase life expectancy from 67.5 to 70 years by 2025 (achieved 70.82 years)
• NHP 2017 aims to reduce total fertility rate (TFR) to 2.1 at sub-national and national level by 2025 (achieved 2.105)
• NHP 2017 also aims to reduce mortality rate (MR) of children under 5 years of age to 23 per 1000 by 2025 (actual- 29 per 1000 in 2022) and maternal mortality rate (MMR) to 100 by 2020 (actual- 97 in 2020)
• NHP 2017 also aims to reduce infant mortality rate to 28 by 2019 (actual -30 in 2019) and reduce neo-natal mortality to 16 (actual- 20 in 2020) and still birth rate to ‘single digit’ by 2025 (estimated at 12.2 in 2021).

The Government should adopt a strategic approach to address the major challenges in Bharatiya Healthcare. Bringing more drugs and medicines under price control by NPPA (National Pharma Pricing Authority), exercising price control over medical devices, enforcing pricing regulations on all medical procedures and treatments offered by hospitals based on certain categorization like general hospitals, nursing homes, specialty hospitals, corporate hospitals etc. and expanding the outreach of AB-PMJAY to provide universal healthcare could be some of the major policy measures the Government must think of.

It is a good sign that the share of Out-of-Pocket Expenditure (OOPE) in Total Health Expenditure has declined from 62.6% in 2014-15 to 47.1% in 2019-20. However, we still have a long way to go to ensure Health for All becomes a reality.

Reference:

1. https://pib.gov.in/PressNoteDetails.aspx?NoteId=153407&ModuleId=3&reg=3&lang=1.

2. budget 2025.

3. budget at a glance 2025-26.