Budget 2025: On 1 February 2025, Finance Minister Nirmala Sitharaman is set to table Budget 2025. Ahead to the Union Budget 2025, industry stakeholder are expecting reforms that will propel the healthcare sector.
According to Behram Khodaiji CEO Ruby Hall Clinic Pune on expectations from the upcoming Union Budget, there is a need to strengthen the sector to improve India’s position as a global medical tourism destination.
“Streamlining visa processes, providing tax benefits to international patients, and investing in infrastructure would further enhance India’s global appeal as the country continues to make significant strides in medical tourism. After exempting customs duties on selected cancer medicines in the previous budget, reduction in GST on medical equipment and consumables further would ease the burden on providers as well as patients, and hospitals would be motivated to use more advanced technologies. Improving accessibility would require a shift in focus on telemedicine solutions and digital health initiatives, especially in rural areas for equitable healthcare distribution,” Khodaiji said.
He also said that this budget can provide strategic investments and targeted reforms in the sector by focusing more on developing robust medical infrastructure through public-private partnerships and promoting hospital expansions in the wake of rising demand for specialized care and thus can make strides toward meaningful milestones both nationally and internationally to enable better health outcomes.
Dr. B. S. Ajaikumar, Executive Chairman, Healthcare Global Enterprises Limited is hopeful that budget 2025 will announce concrete measures to address the glaring disparity on the health, wealth and education fronts.
“Hope the long pending need for universal healthcare is conclusively met, either by imposing a healthcare cess or through an endowment fund whereby the investment income of the fund can be utilised for public health spends. Further, better reimbursement models and smart incentivization of efficient private hospitals are imperative to bridge the urban-rural divide and make healthcare accessible and affordable to one and all. In education, there is an urgent need to introduce a voucher system which can help children of rural areas pursue high quality education to improve their employability and entrepreneurial ability post their graduation. On the wealth front, the need of the hour is the channeling of tax collections for purposeful redistribution of wealth to deserving people of deprived regions via potent options like direct cash transfer,” Dr. Ajaikumar said.
Aman Puri, Founder, Steadfast Nutrition highlighted that the healthcare sector and public policy experts have a longstanding expectation that the government amp up expenditure in healthcare to 2.5%-3% of the GDP – the world average (which includes developed and emerging nations) is 6% while India has stagnated at a concerning 1.5-2.1% since the last few years – a key reason for the country’s poor health infrastructure.
“The National Health Policy 2017, the Economic Survey 2021 and 2022-23 and the 15th Finance Commission have also emphasised increasing government expenditure to at least 2.5% of the GDP. This Budget must address this concern. We need to strengthen primary and secondary healthcare in India and expand healthcare facilities in villages (home to 65% of our population), and tier 2 and 3 cities to meet the demands of India’s burgeoning population and improve their quality of life and unless the allocation to healthcare as a percentage of the GDP improves, will not be able to do so. Increasing investment in healthcare is also critical for social insurance, improving research and development, and advancing digital health services for enhanced healthcare accessibility and delivery. A self-assessment conducted by the Indian government in July 2024 revealed that a vast majority of the country’s public health facilities are falling short of essential standards mandated by the government, failing to meet the benchmarks for infrastructure, human resources, drugs, diagnostics, and equipment, which necessitates an immediate increased allocation to healthcare in this year’s Budget,” Puri said.
Moreover, India’s healthcare system is skewed towards curative healthcare – preventive healthcare receives only 14% of the government funds, which leads to long-term inefficiencies and escalating healthcare costs. In this year’s Budget, the government should allocate funds to preventive healthcare, including awareness campaigns among people on prevalent health issues such as anaemia and lifestyle diseases like diabetes and cardiovascular conditions, health screenings, and wellness programmes, he added.
Meanwhile, Suresh Garg, CMD & Founder of Zeon Lifesciences Ltd. said that they urge the government to consider tax uniformity in the Healthcare sector, special consideration for research and innovation, and robust export incentives to empower Indian Healthcare companies to compete on the global platform. Investments in R&D infrastructure, skill development, and ease of doing business can help our country become a global leader.
Our expectation from the government is to prioritize policies that unlock the immense potential of the healthcare industry, he said.
Dr. Niranjan Hiremath, a senior consultant cardiovascular and aortic surgeon, and the surgical lead at Apollo Hospital revealed that as the Union Budget 2025 approaches, it is crucial that healthcare receives a strategic focus to address long-standing challenges and prepare for future needs.
“Public healthcare spending must increase to at least 2.5%- 3% of GDP, as recommended in the National Health Policy, to ensure universal health coverage and strengthen initiatives like Ayushman Bharat. This allocation is vital to expanding access to quality healthcare, particularly in underserved rural areas, where investments in upgrading primary health centres and deploying mobile health units can play a transformative role. The pharmaceutical and biotechnology sectors, integral to India’s healthcare ecosystem, require enhanced support through production-linked incentive (PLI) schemes. These initiatives can boost domestic manufacturing of active pharmaceutical ingredients (APIs) and medical devices, reducing import dependency and solidifying India’s position as a global pharmaceutical leader,” Dr. Hiremath said.
Additionally, targeted budgetary provisions for research and development in emerging areas like genomics, biotechnology, and AI-driven diagnostics are essential to drive innovation. Tax incentives for startups and public-private partnerships can further accelerate advancements in healthcare delivery and technology integration.
“Preventive healthcare must also be a priority, given the rising burden of non-communicable diseases such as diabetes, cardiovascular illnesses, and cancer. Allocating funds for nationwide awareness campaigns and preventive care programs can significantly alleviate the disease burden. Furthermore, the Ayushman Bharat Digital Mission needs robust financial support to enhance digital health infrastructure, streamline data sharing, and improve patient outcomes. Finally, sustainability in healthcare must be emphasized. Climate change poses significant health risks, and the budget should promote resilient healthcare systems, including green hospitals and eco-friendly infrastructure. Such measures will not only address immediate concerns but also position India to tackle future health challenges effectively,” he informed.
Additionally, Dr Sheetal Jindal-MBBS, MD OBG, EPHM (IIM Kolkata) Senior consultant and medical director_Director Medical Genetics program_Jindal Ivf Chandigarh said that as they look forward to policies that enhance access to advanced healthcare technologies, especially in reproductive health. Given the rising incidence of infertility among Indian couples, the government should consider incentivizing fertility treatments like In Vitro Fertilization (IVF).
“Tax breaks or subsidies on assisted reproductive technologies (ART) would make these services more accessible, particularly in tier 2 and tier 3 cities. Additionally, comprehensive insurance coverage for fertility treatments is essential to bridge a critical gap in healthcare policies. This should include coverage for multiple IVF cycles, as success often requires repeated attempts. Increased funding for research and training in ART and genetic diagnostics will further drive innovation and improve patient outcomes. At Jindal IVF, we remain hopeful that this year’s budget will prioritize accessible, high-quality reproductive care, paving the way for healthier families and a brighter future for India,” Dr. Jindal said.
Dr. Vikas Agarwal, CEO & Founder, Dentalkart, said that as the Union Budget approaches, it is essential to prioritize reforms that make healthcare more accessible and affordable. At Dentalkart, we support a revision of the current GST structure on healthcare products, particularly those taxed at 18%.
“Dental and medical supplies are vital for public health and should not be categorized as luxury items. Implementing a uniform GST rate of 5% across all healthcare products would significantly reduce costs for both providers and patients. This would ensure essential medical and dental supplies remain affordable and accessible, ultimately fostering a healthier nation. Reducing GST on healthcare products is not merely an economic reform but a commitment to public well-being. Such a move would also support the growth of the healthcare sector by encouraging innovation, enhancing service delivery, and enabling healthcare professionals to deliver better care,” Dr. Agarwal said.
Dr. Vivek Desai, Founder & Managing Director, HOSMAC, that throws light on solutions and points that could be included in the Union Budget 2025-26, with respect to the healthcare sector.
“As India prepares for the Union Budget 2025-26, it is crucial to prioritize investments in healthcare infrastructure. Introducing a dedicated Healthcare Capex Fund with flexible loan repayment terms can incentivize private sector investments, ensuring sustainable growth. Moreover, rationalizing GST is essential to overcome the financial burden on hospitals as they currently cannot claim input tax credits due to the GST-exempt nature of healthcare services. Lowering customs duties on life-saving and high-cost diagnostic equipment will further facilitate access to advanced medical technology,” Dr. Desai said.
Additionally, bridging the gap in hospital bed capacity, addressing the shortage of skilled professionals and streamlining healthcare insurance schemes are critical steps toward building an equitable and resilient healthcare system. Now is the time to lay a robust foundation for India’s health, in line with the vision of a thriving and healthy nation, he said.