Gautam Khanna, CEO P.D. Hinduja Hospital & President, Association of Hospitals, Mumbai explains why he is disappointed that the budget does not provide any new significant incentives to the private sector for accelerating development of healthcare infrastructure
From a healthcare perspective, the Union Budget 2025-26 is in the right direction, with several promising initiatives, but also leaves some concerns unaddressed.
The overall increase in budget outlay of about 11 per cent for the sector is indeed welcome and demonstrates the government commitment to improving healthcare in the country.
The expansion of cancer care infrastructure through 200 new Day Care Cancer Centres in district hospitals represents one of the budget’s most impactful initiatives. This decentralisation of cancer treatment will fundamentally improve accessibility for millions of Indians who currently face significant travel and cost barriers for cancer care. However, timely implementation quality of care needs to be ensured.
The full exemption of Basic Customs Duty on 36 life-saving drugs and concessional duty of 5 per cent on six additional critical medications, demonstrate a clear commitment to improving medication affordability. The expansion of Patient Assistance Programmes to cover 37 more life-saving drugs through 13 new programmes will provide crucial support by enhancing access to quality treatment for patients.
Building on last year’s strong foundation, which included substantial allocations for Ayushman Bharat PM-JAY and PMABHIM, this year’s budget continues the momentum. The commitment to add 10,000 additional medical seats in the coming year, advancing toward the ambitious target of 75,000 new seats over five years, is particularly noteworthy. This builds impressively on the 130 per cent increase in medical education capacity achieved over the past decade, which added 1.1 lakh undergraduate and postgraduate seats.
The establishment of National Centres of Excellence for Skilling in Manufacturing provides an opportunity to create a comprehensive ecosystem for healthcare manufacturing excellence. This dual focus on education and manufacturing capability development positions India strongly for healthcare self-reliance.
The plan to provide broadband connectivity to all PHCs in rural areas will help in providing quality care to rural population digitally. Initiatives like nutritional support through Sakhsham Anganwadi Poshan Program and extending availability of potable tap water are significant preventive healthcare measure to tackle nutrition and sanitation issues.
While these initiatives are promising, their success will require robust implementation frameworks and close coordination between stakeholders.
However, the budget does not provide any new significant incentives to the private sector for accelerating development of healthcare infrastructure, like long term financing at lower rates, tax exemptions etc.
It also falls short of giving any new stimulus for fueling innovation in the field of drug development, diagnostics, and medical technology and promoting indigenous manufacture of medical equipment.
We also await information on the progress of initiatives announced in the previous years like setting up of nursing colleges, medical institutions and primary health centres. There could have been more steps to accelerate the development and adoption of Ayushman Bharat Digital Mission.
While the increase of FDI in insurance will help the health insurance sector, more incentives for wider penetration of health insurance would have helped. Our long-standing demand of shifting hospitals from GST exempt category to zero GST tax has also not been provided for.
Overall, the budget is largely positive, aiming to the address the issues of accessibility, affordability, and quality, but with a few caveats.