Union Budget 2025: NATHEALTH urges budget reforms to boost India’s healthcare sector

Ahead of Union Budget for fiscal 2025-26, NATHEALTH – Healthcare Federation of India has presented its recommendations for the upcoming Union Budget, calling for an increase in healthcare budget allocation to over 2.5 per cent of GDP. The proposals aim to address key challenges in the sector while fostering growth and sustainability.

To reduce cancer care costs, NATHEALTH recommends removing customs duties and reducing GST to 5 per cent on oncology radiation equipment like LINACs. This measure is expected to enhance treatment capacity in underserved regions.

NATHEALTH advocates redirecting public health revenues, suggesting that proceeds from healthcare cess and the proposed 35 per cent GST on tobacco and sugar products be allocated to public health programmes. The organisation also supports a unified 5 per cent GST on all healthcare goods and services to lower input costs.

For infrastructure development, NATHEALTH proposes raising hospital height limits to 60 metres across India, with funding for fire safety compliance in high-rise facilities. The federation also suggests adding 2.5–3.0 million hospital beds nationwide through Viability Gap Funding and low-interest capital investments to engage mid-sized and smaller healthcare providers.

Addressing medical education, NATHEALTH recommends increasing MBBS and postgraduate seats through government investment and alternative financing mechanisms like loans and interest subventions. It also suggests a 75–100 per cent increase in tuition fees for private DNB programmes to support capacity expansion.

To ensure viable insurance reimbursement rates, NATHEALTH proposes indexing rates under schemes like CGHS, PMJAY, and ECHS to the Consumer Price Index. This would address financial sustainability, as many rates have remained unchanged for nearly a decade.

In the digital health space, NATHEALTH calls for a 10-year digital health incentive plan to support the Ayushman Bharat Digital Mission (ABDM). The plan would include data security measures, electronic health record (EHR) implementation, and collaboration between industry, academia, and start-ups to drive innovation.

To position India as a global healthcare hub, NATHEALTH suggests creating a dedicated fund to promote high-quality healthcare and medical tourism. It also recommends funding research and development in the MedTech sector, incentivising innovation, and transitioning to quality-linked procurement standards for value-based care.

Abhay Soi, President of NATHEALTH and Chairman & Managing Director of Max Healthcare Institute, stated, “India’s healthcare sector is at a defining crossroads, presenting both complex challenges and transformative opportunities. The upcoming Union Budget offers an unprecedented chance to address systemic gaps such as the acute shortage of medical specialists, escalating cancer care costs, and inadequate hospital infrastructure to meet the demands of a growing population. By implementing strategic reforms, we can pave the way for a robust, equitable, and innovative healthcare system. Expanding hospital capacity, viable reimbursement frameworks, reducing treatment costs, and advancing medical education will not only address current challenges but also secure India’s position as a global healthcare leader. These efforts will ensure a healthier and more sustainable future for all.”