Budget 2026: Healthcare, Insurance And Pharma Seek Push On Preventive Care, Tax Relief, Local Push

Budget 2026 Expectations: With the Union Budget 2026 approaching, stakeholders across healthcare, pharmaceuticals, insurance and health-tech sectors are calling for a stronger policy push towards preventive

care, domestic manufacturing, innovation and risk protection, amid rising disease burden and climate-linked challenges.

Mytri Macherla, Vice President & Sector Head – Corporate Ratings at ICRA Ltd, said the upcoming Budget is expected to prioritise preventive healthcare in view of the sharp rise in non-communicable and lifestyle diseases. “The upcoming budget is likely to focus on preventive healthcare given the significant rise in non-communicable and lifestyle diseases in the country. To boost investments in the sector, tax incentives for private sector investments in modernising medical facilities, especially in tier-2 and tier-3 cities and developing greenfield hospitals in rural areas will be a welcome step,” she said.

She also highlighted the need for higher allocations towards medical education and training to address the low doctor-to-population and nurse-to-population ratios. On pharmaceuticals, Macherla said the sector is seeking rationalisation of GST on key raw materials to correct the inverted duty structure, restoration of tax incentives for R&D expenditure and expansion of production-linked incentive (PLI) schemes to strengthen active pharmaceutical ingredient (API) self-reliance. “Increased public healthcare spending and targeted incentives for biopharma innovation are critical to sustain growth,” she added.

Echoing the shift towards prevention-led healthcare, Sajeev Nair, Founder and Chairman of Vieroots, said the Budget presents an opportunity to accelerate India’s transition from reactive care to predictive and preventive wellness. “We hope to see stronger policy and fiscal support for AI-driven health platforms, digital diagnostics, and personalised wellness solutions that leverage genomics, biomarker intelligence, and real-time health data,” he said.

Nair added that incentives for health-tech startups working at the intersection of AI, data science and preventive care could significantly improve early risk detection and lower long-term healthcare costs. He also stressed the importance of integrating wearables, remote monitoring and digital therapeutics into insurance frameworks and public–private partnerships to drive adoption. “A focused push on data infrastructure, ethical AI frameworks, and innovation-led healthcare can help India build a scalable, accessible wellness ecosystem that empowers individuals to take charge of their health before illness sets in,” he said.

From the insurance sector, Subrata Mondal, Managing Director & CEO of IFFCO-TOKIO General Insurance Company Limited, welcomed the recent GST rationalisation on health insurance, calling it a positive step towards improving affordability and penetration. “Lower taxation on essential protection products is a strong step toward building a more resilient and insured India,” he said.

However, Mondal flagged the need to revise income-tax deductions under Section 80D, noting that existing limits no longer reflect rising medical inflation. He said doubling the deduction would encourage households to opt for adequate health cover rather than minimal protection. He also called for higher allocations to the Pradhan Mantri Fasal Bima Yojana (PMFBY) and expanded coverage for climate-linked risks such as floods, heatwaves and cyclones. “Promoting disaster and catastrophe insurance pools can help spread systemic risk, improve claim settlement capacity during extreme events, and enhance the overall resilience of the insurance ecosystem,” he said.

Meanwhile, Vipul Jain, CEO of CK Birla Hospitals, said the healthcare sector will closely watch policy measures aimed at strengthening infrastructure, technology adoption and supply-side resilience. Highlighting dependence on imports for advanced medical equipment, he said, “If similar equipment were manufactured at scale in India, costs could eventually be materially lower, much like what the automotive sector has demonstrated with domestic production of high-end vehicles.”

Jain added that domestic manufacturing would not only reduce costs but also improve supply reliability and service support. “Further policy incentives to accelerate domestic manufacturing would help build a more resilient medical technology ecosystem, while enabling wider and more affordable access to high-quality care over time,” he said.

Budget 2026 will be tabled on February 1, Sunday.