Budget's Financial Growth
The Indian government's commitment to improving healthcare is evident in the projected budget for 2026-27, which is slated to reach Rs 1,04,599 crore.
This marks a significant surge, reflecting an increase of over 18% compared to the 2024-25 allocations. Experts have noted the strategic importance of this financial commitment, with the revised estimates suggesting a period of measured spending and financial recalibration. The healthcare sector is experiencing a rise in investment, especially in human resources for health and medical education. Funds allocated for this sector have increased dramatically to Rs 1,725 crore in 2026–27, a considerable jump from the Rs 442 crore recorded in 2024–25.
Ayushman Bharat Funding
The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, India's main health insurance scheme, which serves vulnerable and elderly populations, continues to receive increased funding. However, the rise is at a more modest pace. The allocated funds increased from Rs 7,179 crore in 2024–25 to Rs 9,500 crore in 2026–27. The revisions made in 2025–26, where the estimates were trimmed from Rs 9,406 crore to Rs 9,000 crore, indicate a move toward consolidation rather than an accelerated expansion. This suggests a calculated approach to maintain the program's efficiency and impact, ensuring resources are used optimally.
Strengthening State Infrastructure
A significant area of focus within the budgetary allocations is the enhancement of public health infrastructure at the state level. The funding allocated for supporting state-level health infrastructure has seen a sharp increase. In 2026–27, the budget has earmarked Rs 4,200 crore for this, a major leap from the Rs 699 crore allocated in 2025–26. This significant increase underscores the government's commitment to improving the health facilities at the state and district levels. The increased investment aligns with the central government's efforts to decentralize health systems and bolster the infrastructure at the last mile.
Industry's Positive Outlook
The budgetary announcements have received enthusiastic responses from various stakeholders, including the pharmaceutical industry and medical device manufacturers. Industry players recognize the positive impact of these financial commitments, particularly regarding the exemption of customs duty on 17 oncology drugs and the addition of seven rare diseases for exemption on personal imports of drugs, medicines, and specialized foods. These strategic measures will reduce financial burdens, helping patients access high-quality treatment, especially in areas with limited medical facilities. Moreover, these incentives position India to advance from volume-driven production to value-driven global leadership in the pharmaceuticals, biopharma, and medical devices sectors, emphasizing a shift toward innovation and quality.
