With rising healthcare demands and a growing patient base, the Union Budget for FY2025-26 has allocated ₹95,957.87 crore to the Ministry of Health and Family Welfare—a 10.8% increase from the revised ₹86,582.48 crore in FY2024-25. This boost comes at a critical time when India’s healthcare sector is grappling with post-pandemic challenges, an increasing burden of non-communicable diseases, and the urgent need for robust infrastructure. The overall healthcare allocation, including revenue and capital components, has increased by ₹14,957 crore, reaching ₹123,059.80 crore compared to ₹108,102.80 crore in the previous fiscal. The rise reflects the government’s push to strengthen rural and urban healthcare systems while making treatment more accessible and affordable. Higher Allocations for Key Schemes Several flagship health schemes have received significant budgetary increases. The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), aimed at expanding healthcare facilities, has seen a 31.3% hike in funding—from ₹3,200 crore in FY2024-25 to ₹4,200 crore in FY2025-26. This increase is expected to facilitate the establishment of new primary and secondary healthcare centres, particularly in underserved regions. Similarly, the Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY)—touted as the world’s largest government-funded health insurance programme—has been allocated ₹9,405 crore, marking a 28.8% jump from ₹7,299 crore last year. The National Health Authority estimates that this expansion will extend health coverage to an additional 50 million vulnerable individuals. The National Health Mission (NHM), the backbone of India’s rural healthcare system, has received a 15.3% boost, with an allocation of ₹37,226.37 crore for FY2025-26, up from ₹32,294.07 crore in the previous year. NHM plays a pivotal role in strengthening primary healthcare and maternal and child health services. One of the most significant increases is the 661.4% jump in funding for Human Resources for Health and Medical Education, from ₹220 crore in FY2024-25 to ₹1,675 crore in FY2025-26. This sharp rise underscores the government’s commitment to training more medical professionals, addressing India’s doctor-patient ratio of 1:834—still below the Wrold Health Organisation (WHO)-recommended 1:1000. Medical Education and Cancer Care Expansion Finance Minister Nirmala Sitharaman, in her budget speech, highlighted a 130% increase in medical education seats over the past decade, with nearly 1.1 lakh new undergraduate and postgraduate seats added. “The government aims to add 10,000 more medical seats in the coming year and has set a target of 75,000 new seats over the next five years,” she stated. To address India’s growing cancer burden, the government has announced the establishment of 200 new day-care cancer centres in district hospitals in FY2025-26. This is part of a broader strategy to expand cancer treatment facilities across the country. According to the Indian Council of Medical Research (ICMR), cancer cases in India are projected to reach 15.7 lakh by 2025, making decentralised cancer care an urgent priority. Making Life-Saving Medicines More Affordable A key policy measure in this budget is the exemption of 36 life-saving medicines from basic customs duty (BCD), covering treatments for cancer, rare diseases, and chronic illnesses. Additionally, six more medicines will now be subject to a reduced 5% customs duty, further lowering costs for patients. Sitharaman stated, “To ensure the affordability of critical treatments, we are fully exempting pharmaceutical assistance programmes that provide free medicines from basic customs duty.” This exemption extends to bulk drugs used in manufacturing these medicines, a move expected to benefit millions of patients. Industry bodies like the Indian Pharmaceutical Alliance have welcomed the decision. Social Security for Gig Workers and a Push for Medical Tourism Recognising the rise of the gig economy, the government has announced plans to extend healthcare benefits to nearly 1 crore gig workers through PM-JAY. Sitharaman said, “Gig and platform workers are an integral part of our economy. By registering on the e-Shram portal, they will now have access to essential health benefits under Ayushman Bharat.” Dr D S Rana, Chairman, Board of Trust, Sir Ganga Ram Hospital, highlighted the importance of expanding healthcare benefits to gig workers. “Including gig workers under PM-JAY is a significant step towards healthcare security for this fast-growing segment. Without formal employer-provided benefits, gig workers often face high out-of-pocket medical expenses. This move ensures they have access to essential healthcare, reducing their financial burden.” “While platforms like Swiggy, Zomato, and Uber may see reduced operational costs since they won’t need to provide separate health insurance, identifying and enrolling eligible gig workers could be a challenge," he said noting potential challenges in implementation. The budget also strengthens India’s position as a global medical tourism hub with measures under the ‘Heal in India’ initiative. These include streamlined visa processes for foreign patients and expanded partnerships with private hospitals to attract international medical travellers. According to the Ministry of Tourism, India’s medical tourism market is projected to reach $13 billion by 2026, making it a key driver of economic growth. Experts and industry leaders have largely welcomed the budget’s focus on healthcare access and affordability. Hitesh Sharma, Partner and Life Sciences Leader – Tax at EY India, said, “The Budget 2025 presents a positive outlook for India’s health science sector, with key provisions such as the basic customs duty exemption on 36 life-saving drugs for rare diseases, cancer, and chronic conditions. Additionally, 37 more specified drugs and 13 new Patient Assistance Programmes (PAPs) have been included, allowing pharma companies to extend coverage to more patients across India.”