As the Finance Ministry prepares the Union Budget 2026–27, the healthcare sector has presented a detailed agenda. Key priorities include strengthening primary care, building robust public health infrastructure, accelerating digital health initiatives, and managing the growing burden of non-communicable diseases (NCDs). Last year’s budget made significant progress, with over INR 1 lakh crore allocated to health, AYUSH, and related sectors. Measures included expanding medical education and the workforce, improving access to essential medicines, promoting digital health, and enhancing cancer care facilities.
Expectations for Budget 2026–27 include at least a modest increase in allocations for FY27, along with a clear long-term plan to reach the National Health Policy goal of public health spending at 2.5% of GDP. However, the challenge is not just about higher allocations. Despite increased funding, actual spending has remained around 0.27% of GDP, highlighting hurdles in implementation and absorption of funds.
Expanding Healthcare Access
A critical focus area for the upcoming budget is primary and preventive care. Programs such as Ayushman Arogya Mandirs (AAMs) and infrastructure under PM-ABHIM require consistent operational funding. Support through the National Health Mission (NHM) or structured public-private partnerships (PPP) can ensure these facilities deliver comprehensive preventive and curative services effectively. Strengthening these systems will maximize the benefits of the infrastructure already developed.
While the Ayushman Bharat–Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) has widened access to inpatient care, service supply in Tier II and III cities and underserved districts has not kept pace. Budget 2026–27 should focus on large-scale infrastructure expansion, incentivizing private sector investment, and increasing delivery capacity in areas with limited healthcare access.
Tackling the Rise of Non-Communicable Diseases
The budget can also enable modern healthcare financing reforms, including a smarter mix of capitated payments for primary care and outcome-linked funding for tertiary services, which would improve efficiency and patient outcomes. With the Ayushman Bharat Digital Mission (ABDM) gaining momentum, dedicated funds for digital health platforms, interoperability, data governance, and cybersecurity are essential to build a modern, integrated health system.
The rising burden of NCDs such as diabetes, cardiovascular diseases, and cancer continues to strain India’s health infrastructure. Budget priorities should include screening, chronic care, and rehabilitation services, integrating NCD management into routine AAM operations, and providing regulatory clarity for digital therapeutics and telemedicine as virtual care becomes mainstream.
Balancing Operational Needs and Capital Investments
The pharmaceutical and medical devices sectors are also seeking policy support, including customs and duty rationalization on lifesaving inputs, to make advanced therapies more affordable. Budget 2026–27 must strike a balance between immediate operational needs—medicines, workforce, and facility upkeep—and capital-intensive projects like upgrading laboratories and expanding district hospitals. A practical approach would be to front-load operational funding for programs like AAMs and ABHIM while phasing capital projects through joint state-central funding.
If Budget 2026–27 delivers incremental funding alongside outcomes-focused planning, covering primary care, digital health, and NCD management, it can strengthen India’s healthcare system, making it resilient, accessible, affordable, and equitable for all.
