Healthcare industry insights on union budget 2025-26 expectations

Dr Suman Katragadda, CEO, Heaps.ai.:

“As the Indian government prepares to announce the Union Budget for 2025-26, the healthcare sector anticipates strategic initiatives to drive industry growth and improve public health outcomes. To sustain the growth trajectory and address emerging health challenges, the upcoming budget could focus on investing in preventive care, enhancing care coordination and management, and addressing healthcare gaps in rural areas. There is also an opportunity to accelerate India’s digital and AI revolution while transforming critical areas like healthcare through care coordination. Focused investments in AI infrastructure, regulatory frameworks, and skill development can empower innovation and democratise intelligent solutions. In healthcare, prioritising AI-driven care coordination can streamline patient journeys, enhance access to quality care, and reduce system inefficiencies”

Gautam Khanna, CEO, P.D. Hinduja Hospital & Medical Research Centre, Mumbai:

“The government has shown tremendous support and impetus towards the healthcare sector in the last few years. As the government sets its eyes on the next budget, we look forward to the possibility of an increased allocation to the tune of 2.5-3 per cent for the healthcare sector. 

This would help in addressing the country’s growing healthcare needs and improve access to quality care. It will boost infrastructure development, especially in Tier 2 and 3 cities, strengthen primary care through expanded Public Health Centres, encourage public-private partnerships, and support medical education expansion to address shortages of medical professionals and nurses. The budget should also address the acute shortage of healthcare professionals through increased funding for medical education infrastructure and skill development programs.

Additionally, the budget’s strategic focus should extend to creating sustainable healthcare solutions. For meaningful impact, we expect comprehensive reforms in health insurance accessibility, with the Ayushman Bharat scheme expanding beyond its current 34.2 crore beneficiaries through innovative financing models and higher amounts for complex procedures in super-speciality hospitals. 

Tax incentives for private insurance adoption, particularly targeting the middle class, coupled with streamlined digital claim processes, could revolutionise healthcare financing. Substantial allocations for preventive healthcare, including a nationwide network of screening centres and wellness programs that could fundamentally shift our healthcare approach from curative to preventive will be beneficial for all.

Long-term Infrastructure like financing options at lower rates and higher payment periods along with tax breaks will help expansion and give access to the Indian population. Long-term infrastructure like financing options at lower rates and longer repayment periods, along with tax breaks, is critical for healthcare expansion and accessibility in India. Affordable credit reduces financial strain on providers, enabling investments in facilities, equipment, and training. Current loan tenures of 7-8 years are insufficient, as hospitals require significant capital for land, infrastructure, operations, and human resources, with years needed to achieve breakeven. Long-term credit (15-20 years) with lower interest rates and reduced collateral requirements is essential to address bottlenecks, revive stalled projects, and reduce NPAs in the sector. Tax reforms are equally crucial. Shifting hospitals from the GST exemption category to zero-tax would allow input credit, lowering treatment costs for patients. Additionally, tax holidays for greenfield healthcare projects, akin to those for SEZs and Tech Parks, would drive private investments. A holistic approach, including incentives for ancillary services, is vital to create a robust ecosystem. Rationalised policies and support will transform healthcare, ensuring affordable and accessible quality care nationwide.

Digital health transformation should receive significant attention, with expected investments in AI-driven diagnostics, telemedicine infrastructure, and electronic health records. These technological interventions are crucial for bridging the urban-rural healthcare divide and optimising our limited healthcare resources.

Following the positive impact of previous customs duty exemptions on cancer medicines, we anticipate similar relief measures for a broader range of critical medical equipment and pharmaceuticals, stimulating both healthcare accessibility and domestic manufacturing capabilities.

The budget may also consider moderate investments in the AYUSH sector, focusing on research-backed integration with modern medicine where appropriate, while maintaining the primacy of evidence-based healthcare practices.

However, the success of these ambitious initiatives will hinge on robust implementation frameworks and governance mechanisms.”

Chandra Ganjoo, Group Chief Executive Officer, Trivitron Healthcare:

The medical device industry in India has identified some of the major expectations for the 2025 Union Budget, where it can look forward to overcoming the challenges and unlocking the growth potential. There should be a simplified regulatory framework to eliminate bureaucratic hurdles and clarify things, including a dedicated authority for medical devices distinct from pharmaceuticals. The inverted duty structure needs to be addressed to promote domestic manufacturing, whereby raw materials are charged higher customs duties than the finished products. Increasing R&D incentives and tax benefits, are necessary to encourage innovation and competitiveness. Another key element is stricter enforcement of “Make in India” policies on public procurement, enhanced support for local manufacturers through reduced GST rates, and infrastructural development, such as medical device parks. More importantly, the domestic standards must be aligned with global benchmarks, thereby increasing exports and simplifying import-export procedures for a smooth supply chain. Investment in skill development and training programs and increased healthcare spending over 2.5 per cent of GDP will create demand and strengthen the sector. If the budget addresses these expectations, it can position India as a global hub for medical devices and drive the growth of the healthcare ecosystem.

Dr Sabine Kapasi, Co-Founder and MD at Enira Consulting:

“The 2025 Budget presents a pivotal opportunity to elevate healthcare advancements, building upon the progress made in 2024. A key area of focus should be the enhancement of digital health infrastructure, especially in underserved regions. Investments in telemedicine hubs and improved internet connectivity can make medical expertise more accessible to remote communities. Supporting digital platforms and applications will further bridge gaps between patients and healthcare providers, ensuring timely and efficient care delivery.

Artificial intelligence (AI) has demonstrated significant potential in healthcare, particularly in diagnostics and treatment planning. In 2025, the emphasis should be on scaling these AI-driven solutions. Government funding for AI research and support for startups developing healthcare technologies can accelerate innovation. Encouraging hospitals to integrate AI tools will optimise resources and enhance care quality, which is crucial in settings where resources are limited.

Preventive care and value-based healthcare models must remain priorities. Shifting the focus from procedures to outcomes can promote better healthcare practices, reduce unnecessary treatments, and help families manage medical expenses more effectively. Policy incentives supporting these models could lead to significant improvements in public health outcomes.

Inclusivity is essential to ensure that healthcare advancements benefit all segments of the population. Public-private partnerships can play a crucial role in scaling healthcare solutions while maintaining affordability. Additionally, embedding sustainable practices in healthcare systems—through green technologies or energy-efficient infrastructure—will ensure that innovation aligns with environmental responsibility.

Recent health challenges underscore the need for robust healthcare infrastructure and emergency preparedness. The outbreak of Human Metapneumovirus (HMPV) in China has led to a rampant increase in healthcare system use. Such outbreaks highlight the importance of being prepared for any type of healthcare emergency. Lessons learned from the COVID-19 pandemic further emphasise the necessity of strengthening healthcare infrastructure to respond effectively to health emergencies.

The 2025 Budget has the potential to lay the groundwork for a healthcare system that is equitable, innovative, and aligned with global sustainability goals. By focusing on digital health infrastructure, AI integration, preventive care, inclusivity, sustainability, and emergency preparedness, we can build a resilient healthcare system capable of meeting current and future challenges.”