Union Finance Minister Nirmala Sitharaman while presenting the budget 2025 made some announcements for Health sector. The finance minister has proposed to add 36 lifesaving drugs and medicines to the list of medicines attracting concessional customs duty of 5%.
Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from the basic customs duty, provided the medicines are supplied free of cost to patients. As a part of this objective, 10,000 seats will be added in FY26.
The government will facilitate setting up of day care cancer centres in all district hospitals in the next three years with 200 centres to be established in FY26. The 2025 budget has allocated Rs 20,000 crore to implement a private sector driven research, development and innovation initiative that was announced last year in July.
While the daycare cancer centres in district hospitals and addition of seats is welcome, the question looming large is: Has the budget met the target of 2.5% of GDP allocation to achieve sustainable development goals?
The allocation for health is only Rs 98,311 crore rupees out of a total budget of Rs 50.65 lakh crore rupees. It means health has been allocated only 1.9% of the total budget. If we calculate the total amount of the Budget for our population of 146 crore, it comes to be only Rs 673 per person. It does not meet even the inflation during this period. It is a cruel joke with the people as we are among the lowest in health indicators and our public health spending is also among the lowest in the world.
More money needs to be invested in public health, because it reduces the need for secondary and tertiary care, and also the out-of-pocket expenditure for the individual, which is around 50% to 60% — one of the highest in the world. An allocation of 2.5% of GDP would reduce it to around 35%.
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 tier 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 necessitated an immediate increased allocation to healthcare in this year’s Budget.
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.
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.
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.
The abysmal state of public health post pandemic needed urgent and dedicated political action. Political commitment is central to health investments and policy, health systems, health outcomes and financial risk protection, through its ability to drive: (i) resource allocation; (ii) capacity and accountability in public systems; (iii) reforms that can in turn strengthen preventive, promotive and curative health through prioritisation of public health, a quality and equitable primary healthcare system integrated with tertiary care; and, (iv) improved budget utilisation through allocative and technical efficiencies.
Political will is fundamental to each of these pillars, which in turn impact and enable other shifts, such as the combination of relevant reforms and increased public resources contributing to financial risk protection for individuals. The positioning of health, by leaders and individuals, as a driver of national aspirations, human development and growth, as also individual aspirations, becomes an influencer of attention and priority accorded to it. The best designed systems may fail to yield results in the absence of political priority to health.
Health sector is still waiting for its political will and the budget surely disappoints.
Dr. Pooja Tripathi is spokesperson of the Congress party, and a public health specialist. She has previously worked with Gates Foundation & World Bank’s Global HIV/AIDS Program and has penned a coffee table book on ‘Scratch to Success- Routine Immunization in India.
Disclaimer: The views and opinions expressed in this piece are those of the author and do not necessarily reflect the views of the editorial board or the organization.
