The Union Budget for FY2025-26 has allocated ₹95,957.87 crore to the Ministry of Health and Family Welfare, reflecting a 10.8% increase from the revised ₹86,582.48 crore in FY2024-25. The overall healthcare allocation, including revenue and capital components, has increased by ₹14,957 crore, bringing the total to ₹1,23,059.80 crore, up from ₹1,08,102.80 crore in the previous fiscal year. This rise highlights the government’s commitment to strengthening rural and urban healthcare systems, improving medical infrastructure, and making healthcare more accessible and affordable.
Key Budget Highlights
1. Increased Funding for Flagship Healthcare Schemes
- Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM):
- Allocation: ₹4,200 crore (+31.3% from ₹3,200 crore in FY2024-25).
- Objective: To expand primary and secondary healthcare facilities, especially in underserved areas.
- Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY):
- Allocation: ₹9,405 crore (+28.8% from ₹7,299 crore last year).
- Impact: Estimated to extend health coverage to an additional 50 million vulnerable individuals.
- National Health Mission (NHM):
- Allocation: ₹37,226.37 crore (+15.3% from ₹32,294.07 crore in FY2024-25).
- Role: Strengthens primary healthcare, maternal and child health services, and rural healthcare.
2. Boost for Medical Education and Healthcare Workforce
- Human Resources for Health & Medical Education:
- Allocation: ₹1,675 crore (+661.4% from ₹220 crore in FY2024-25).
- Focus: Expanding medical education, training more healthcare professionals, and improving India’s doctor-patient ratio (currently 1:834, below the WHO-recommended 1:1000).
- Expansion of Medical Seats:
- Government target:
- 10,000 new medical seats to be added in FY2025-26.
- 75,000 new seats planned over the next five years.
- Impact: Aims to address India’s shortage of trained doctors and specialists.
- Government target:
3. Strengthening Cancer Care Infrastructure
- New Day-Care Cancer Centres:
- 200 new centres to be established in district hospitals.
- Objective: Decentralizing cancer treatment to make it more accessible to patients.
- Significance: India’s cancer burden is projected to reach 15.7 lakh cases by 2025, making decentralization of treatment an urgent need.
4. Making Life-Saving Medicines More Affordable
- Customs Duty Exemptions & Reductions:
- 36 life-saving medicines for cancer, rare diseases, and chronic illnesses exempted from basic customs duty (BCD).
- Six additional drugs subject to a reduced 5% customs duty.
- Pharmaceutical Assistance Programmes (PAPs) providing free medicines fully exempted from customs duty.
- Bulk drugs used in manufacturing these medicines will also receive duty exemptions.
- Industry Response:
- Indian Pharmaceutical Alliance and other stakeholders have welcomed the move, citing it as a major step toward reducing the financial burden on patients and improving access to critical treatments.
5. Expanding Healthcare Access for Gig Workers
- PM-JAY to Cover Gig Workers:
- Nearly 1 crore gig workers (such as those working for Swiggy, Zomato, Uber) will now be eligible for PM-JAY health benefits.
- Enrolment Process: Workers must register on the e-Shram portal to receive coverage.
- Significance: Addresses the lack of formal employer-provided health benefits in the gig economy.
6. Push for Medical Tourism Under ‘Heal in India’ Initiative
- Policy Measures to Attract Foreign Patients:
- Streamlined visa processes for international medical travelers.
- Partnerships with private hospitals to enhance medical facilities for foreign patients.
- Projected Market Growth: India’s medical tourism industry is expected to reach $13 billion by 2026.
The FY2025-26 health budget reflects a strategic focus on expanding medical infrastructure, improving accessibility, and strengthening healthcare affordability. While the increased allocations for PM-JAY, NHM, and medical education are widely appreciated, challenges remain in effective implementation, ensuring gig worker enrolment, and maintaining financial sustainability of these initiatives.
Post-Budget Reaction from the Industry Leaders:
Vijay Singh Chauhan, Chairman and Managing Director, Prakash Hospital
With the Union Budget 2025, the government is making a transformative commitment to public health, with the establishment of daycare cancer centres in all district hospitals across the country over the next three years. Starting in FY 2025-26, 200 such centers will be set up, ensuring that cancer care is within reach for millions of people, regardless of where they live. This groundbreaking move will not only enhance access to life-saving treatments but also alleviate the burden of travel and healthcare costs for families.
Furthermore, the decision to remove custom duties on 36 life-saving drugs marks a monumental shift in making critical medicines more affordable and accessible to those in need. This will directly benefit millions of families who rely on these essential treatments, easing the financial burden of healthcare. This comprehensive approach combining accessible cancer care, improved nutrition, and affordable medicines underscores the government’s commitment to enhancing the health and well-being of our citizens, laying a strong foundation for a healthier, more resilient society.
Anand. K, Managing Director & CEO, Agilus Diagnostics
“The Union Budget 2025-26 stands out as one of the most impactful for the healthcare sector in recent times, reinforcing the government’s vision of an affordable and comprehensive healthcare system as a key pillar of Viksit Bharat. The significant investments in cancer care, expansion of medical education, and promotion of Heal in India and medical tourism will play a crucial role in strengthening India’s healthcare infrastructure.
The establishment of 200 district-level daycare cancer centers and exemption of essential medicines from basic customs duties will greatly enhance accessibility to critical treatments. The addition of 10,000 medical seats this year, with a vision to add 75,000 in the next five years, is a crucial step toward addressing the healthcare workforce gap.
The government’s strong push for private sector participation, backed by regulatory reforms and a ₹1.5 lakh crore infrastructure push, will create new opportunities for innovation and investment. The proposed AI Development Center and regional skilling hubs with global collaborations will help modernize healthcare delivery and diagnostics.
Furthermore, the expansion of telemedicine through broadband connectivity in primary health centers will improve access to care for rural patients. The increased credit cover for MSMEs and startups, coupled with a trust-based regulatory framework, will foster a more conducive business environment.
Overall, this budget lays a strong foundation for a robust healthcare ecosystem, ensuring quality healthcare reaches every citizen while also strengthening India’s position as a global healthcare hub.”
Azad Moopen, Founder & Chairman, Aster DM Healthcare.
The Union Budget 2025 strengthens India’s commitment to a more resilient and inclusive healthcare system, ensuring accessibility, affordability, and quality care for all. The addition of 75,000 new medical seats will address the long-standing healthcare workforce shortage. This effort will help close access gaps in underserved areas, ensuring both the availability and quality of care are improved. The establishment of 200 cancer daycare centres in district hospitals represents a proactive move towards decentralising cancer treatment, making care more accessible. These centres will not only enhance accessibility but also improve outcomes by enabling timely interventions while customs duty exemptions on cancer drugs and 36 life-saving medicines will make critical treatments more affordable. Further, the decision to exempt 36 life-saving medicines from basic customs duties, along with reduced duties on six additional medicines, is a decisive action aimed at removing financial barriers to essential treatments. This initiative is particularly beneficial for patients suffering from chronic and rare diseases, reinforcing the government’s commitment to making healthcare more affordable for the most vulnerable. The e-Shram healthcare insurance for gig workers and increased investment in medical research and genetic studies demonstrate a forward-thinking approach to public health. Additionally, easing visa norms for medical tourism under the ‘Heal in India’ initiative strengthens India’s position as a global healthcare destination, benefiting both patients and the economy. These initiatives mark a significant step toward building a future-ready healthcare system that prioritizes both immediate needs and long-term advancements.
Saransh Chaudhary, President, Global Critical Care, Venus Remedies Ltd and CEO, Venus Medicine Research Centre:
“The Union Budget 2025 has brought several positive developments for the pharma industry, including full exemption from basic customs duty on 36 lifesaving drugs and concessional duty of 5% on 6 more. The government’s decision to fully exempt specified drugs under Patient Assistance Programmes (PAPs) and add 37 new medicines along with 13 additional PAPs will significantly improve access to critical medicines and reduce treatment costs for patients in need.
The announcement to set up Day Care Cancer Centres in all district hospitals over the next three years—starting with 200 in 2025-26—is a commendable step in strengthening cancer care infrastructure. This initiative will provide patients with first-hand assistance from healthcare professionals while easing the burden on tertiary hospitals and ensuring timely treatment closer to home.
While these are welcome steps, we had hoped for a stronger push towards pharmaceutical R&D. Increasing allocation beyond the current 1% of GDP, raising the weighted tax deduction for R&D expenditure from 100% to 200%, and swiftly rolling out the Research Linked Incentive scheme remain critical to fostering drug innovation. We urge the government to consider these priorities to further bolster research in India’s pharma industry and healthcare ecosystem.”
Gaurav Soni, Founder & MD, Botanic Healthcare.,
The 2025 Union Budget’s continued focus on healthcare and wellness presents significant opportunities for the nutraceutical industry. The comprehensive program outlined by the Finance Minister for promoting vegetables and fruits reflects a broader shift towards a healthier India. With rising awareness of nutritional needs, the consumption of nutritious foods is on the rise. The government’s targeted initiatives to enhance the availability and accessibility of these essential food items are a step forward in ensuring that improved nutrition benefits a wider segment of the population. Furthermore, the emphasis on preventive healthcare and the strengthening of healthcare infrastructure are pivotal in advancing national health goals. The plan to support R&D and manufacturers will fuel innovation, driving growth in the sector and positioning India as a global leader in the wellness space,”
Sudhir Srivastava, Founder, Chairman, and CEO of SS Innovations,
The Finance Minister’s announcement to expand medical education and healthcare infrastructure is a significant move toward building a more robust healthcare ecosystem. The addition of 10,000 undergraduate and postgraduate medical seats in the coming year, as part of the broader plan to add 75,000 seats over the next five years, is a crucial step in addressing the growing demand for healthcare professionals. This will not only improve the quality of care but also ensure that healthcare services reach every corner of the country, bridging the gap in underserved regions.
Another impactful initiative is the provision of broadband connectivity to all government secondary schools and primary health centres in rural areas under the BharatNet project. This will not only enhance digital education but also enable crucial healthcare services like telesurgery to reach remote regions, making high-quality medical expertise accessible to underserved populations. With reliable internet connectivity, medical professionals will be able to perform remote consultations and surgeries, revolutionizing healthcare delivery in rural areas.
The government’s focus on strengthening urban livelihoods and supporting vulnerable populations through various initiatives is equally commendable. These measures are vital for enhancing economic stability and providing much-needed employment opportunities, particularly in urban areas. We also welcome the decision to exempt patient assistance programs from Basic Customs Duty (BCD), making life-saving medications more accessible to those in need. This will go a long way in improving healthcare affordability and ensuring that no patient is left behind.
Saloni Wagh, MD, Supriya Lifescience Ltd.
“The Union Budget 2025 – 26 continues to build upon India’s growth story by focusing on the Garib, Youth, Annadata and Nari, making sure that the four pillars of the economy are well taken care of. Committing to women empowerment alongside better health care is very significant, and the Saksham Anganwadi and Poshan 2.0 schemes will support nutrition to mothers, children, and adolescent girls. These initiatives will go a long way in making India a healthier nation.
The daycare cancer centres in the district hospitals will be the most beneficial announcement as they ensure that people all around the country will have easy and timely access to cancer care. Further, the inclusion of 36 life-saving drugs into the full customs duty exemption and the concessional rates for others will aid patients suffering from cancer, rare diseases, and chronic conditions. Strengthening the Indian medical economy and making vital medicines more affordable will have a positive impact on society.
A customized tariff structure will aid the pharmaceutical sector in making manufacturing and the export of medicines easier, putting India in a stronger position as a pharmaceutical superpower. The government’s intention of lowering the ‘Ease of Doing Business’ and the new manufacturing mission under ‘Make in India’ will also boost development and further aid the innovation.
This budget strengthens India’s consumption story as well as further inclusion. As we step forward into a ‘Viksit Bharat’, the areas of healthcare, women, and industrial expansion will greatly influence the tomorrow.”
Ms. Shivani Wagh, Joint MD, Supriya Lifescience Ltd.
The Union Budget for 2025, with the scrapping of customs duties on 36 life-saving drugs, among others, is a move that is much needed by the pharmaceutical industry, especially for their critical treatments for cancer. This will enable essential medicines to reach patients at lower prices while improving access to advanced healthcare solutions. The continued government boost for bulk drug concessions shall further strengthen domestic Active Pharmaceutical Ingredients (API) manufacturing and, therefore, repair dependency on imports in a step toward making India a leading pharmaceutical manufacturer in the world.
At SupriyaLifescience, we see these reforms as a step in the right direction. By creating a more self-reliant pharmaceutical ecosystem, the budget enables companies like ours to scale up production capacities, promote innovation, and ensure the delivery of high-quality and life-saving medicines to those most in need. The emphasis on affordability and accessibility strikes an accord with our direction towards the delivery of essential pharmaceutical solutions in the resolution towards the healthcare challenge in India.
Further than pharmaceuticals, the commitment of the government vis-a-vis health infrastructure—Rs 98,311 crore allotted to the sector, increased medical seats, and setting up 200 cancer centers—is certainly a strong message sent on the launch pad of long-term sustainability of health care. These efforts will undoubtedly assist in improving patient care while they shall be laying a much better platform for medical research and innovations.
Overall, Budget 2025 depicts an approach of balanced stimulation of growth.
Malavika Kaura Saxena, CMO, Rusan Pharma
“The scale-up of Cancer Care centres in Budget 2025 is a transformative step toward improving accessibility and easing the burden on overstretched healthcare infrastructure. We urge policymakers to ensure these centres integrate pain management and palliative care, which are critical to holistic cancer treatment. The tax exemptions for life-saving drugs and rare disease therapies is a move in the right direction, as they will enhance affordability and availability for patients.
Priyanka Aggarwal, Managing Director and Senior Partner & India and South East Asia Leader, Healthcare Practice, BCG.
The continued investment of government in growing medical education and healthcare infrastructure is a notable step toward strengthening India’s healthcare ecosystem. With the addition of 10,000 medical seats in the coming year and the broader goal of 75,000 seats over five years will help bridge the doctor-patient ratio gap. The establishment of daycare cancer centres in all district hospitals over the next three years will enhance cancer care accessibility. Also, the exemption of Basic Customs Duty (BCD) on lifesaving medicines will provide financial relief to patients battling severe diseases, ensuring affordability of essential treatments.
However there continues to be a need for stronger push towards incentivising domestic Medical Device Manufacturing as well as greater support for innovation through R&D incentives and promoting preventive healthcare.
Krishna Prasad, Chigurupati Chairman & Managing Director, Granules India Limited
“Exempting 36 life-saving pharmaceuticals from basic customs duty and adding six essential medicines under a concessional 5% duty will significantly enhance access to critical therapies. Extending full exemption and concessional tariffs to bulk drugs used in their manufacturing will further improve affordability and availability.
The expansion of medical education with 10,000 additional seats and the establishment of 200 daycare cancer centers in FY 2025-26 will strengthen healthcare infrastructure, enabling early diagnosis and treatment. Additionally, the establishment of five National Centers of Excellence for Skilling, along with global skilling collaborations, will equip India’s workforce with the expertise needed to drive pharmaceutical innovation and manufacturing.
These strategic initiatives reinforce India’s commitment to providing accessible and cost-effective healthcare solutions.
Mr Arjun Juneja, Chief Operating Officer, Mankind Pharma Limited and Chairman, Pharma Committee, FICCI
“The Union Budget 2025-26 lays a solid foundation for India’s pharmaceutical sector and enhances healthcare accessibility. The exemption of Basic Customs Duty on 36 life-saving drugs makes critical treatments, especially for oncology and rare diseases, more affordable, aligning with the government’s vision of a self-reliant India. The establishment of Day Care Cancer Centres and expansion of Patient Assistance Programs (PAPs) will further improve patient access to essential treatments.
The budget’s focus on 5% concessional duties on essential medicines and bulk drug exemptions will optimize production costs, boost domestic manufacturing, and drive innovation. The commitment to adding 75,000 medical college seats and the creation of a Centre of Excellence in AI further strengthens the healthcare ecosystem.
The ‘Heal in India’ initiative, combined with streamlined medical tourism policies, positions India as a global healthcare hub, driving demand for high-quality, affordable medicines. These reforms are a significant step toward making India a global leader in pharmaceuticals, and we at Mankind Pharma are excited to support and contribute to this transformation.”
Mr Yatharth Tyagi, Director- Yatharth Group of Hospitals
“The Union Budget 2025-26 is a well-thought and strategic move, laying a transformative foundation for an inclusive and resilient healthcare ecosystem. The establishment of 200 daycare cancer centers with a three-year district hospital rollout plan is a welcome intervention. This initiative, along with customs duty exemption on 36 life-saving drugs and 13 new patient assistance programs, will improve access to specialized treatment and reduce the financial burden of cancer care. The commitment to add 10,000 medical seats, aiming for 75,000 in five years, and the establishment of five National Centers of Excellence for skilling are strategic steps to address critical workforce gaps in healthcare delivery.
These policy measures align perfectly with our mission to make quality healthcare accessible to every Indian, supporting the government’s vision of ‘Viksit Bharat.'”