
NEW DELHI: The health sector received a 9.47 per cent hike in the Union Budget 2025, with a major push given to public health, especially cancer care, as the government announced a series of measures, including setting up daycare centres in all district hospitals over the next three years.
Delivering on Prime Minister Narendra Modi’s last year Independence Day promise to add 75,000 more medical seats in the next five year, the Union Finance Minister Nirmala Sitharaman, in her budget speech on Saturday, announced that “in the next year, 10,000 additional seats will be added in medical colleges and hospitals, towards the goal of adding 75,000 seats in the next 5 years.”
She said the government had added almost 1.1 lakh undergraduate and post-graduate medical education seats in 10 years, an increase of 130%.
The total allocation for the Health and Family Welfare Ministry, excluding the Department of Research, is 95,957. 87 crore, up from 87,656.9 crore in the previous year.
According to Dr Sarit Kumar Rout, Professor of Health Economics and Financing at the Indian Institute of Public Health Bhubaneswar, Public Health Foundation of India (PHFI), “Only 9.47% increase in Health and Family Welfare budget compared to 2024-25 BE in absolute terms, and if adjusted to inflation, it is a moderate increase.”
“Overall health sector allocations including AYUSH, health research and health and family welfare budget estimates constitute only 2% of total central government allocations and which remains more or less same in the last several years,” he told this paper.
Prof. K Srinath Reddy, former President of PHFI, said, while the overall health budget has increased, it is reflected mostly in raised allocations for the infrastructure, digital health, and Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) components. “The National Health Mission, the vehicle for strengthening primary care and district hospitals, has received only a small increase. This imbalance needs to be corrected.
The National Health Mission (NHM) saw a nearly 4 per cent hike from Rs. 36,200 crore allocation last year to Rs. 37,566 crore this fiscal.
Poonam Muttreja, Executive Director of the Population Foundation of India (PFI) said the total health budget remains insufficient to address India's growing healthcare needs, particularly public health infrastructure, primary healthcare, and non-communicable diseases. "We need transformative change, not incremental steps. We must address the historical shortfalls in the health budgets over the years.”
However, experts welcomed the move to reduce the cost of life-saving drugs, extending daycare services for cancer patients in district hospitals, 200 of which would be established this year, and including gig workers in Pradhan Mantri Jan Arogya Yojana (PM-JAY).
Sitharaman, in her budget speech, also announced adding 36 lifesaving drugs and medicines to the list of medications fully exempted from Basic Customs Duty (BCD). These medicines include gene therapy, chemotherapy and other rare disease drugs. Six life-saving medicines will also be added to the list, attracting concessional customs duty of 5%.
“Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from BCD, provided the medicines are supplied free of cost to patients. I propose to add 37 more medicines along with 13 new patient assistance programmes,” Sitharaman said.
D S Negi, CEO of Rajiv Gandhi Cancer Institute and Research Centre (RGCIRC), said this move would greatly decrease patients' treatment costs.
Commending the health initiatives announced by the government, Dr Harsh Mahajan, Founder and Chairman of Mahajan Imaging and Labs and Chairman of the Health Services Committee of FICCI, however, said that they note the absence of a revision in GST rates on medical devices. “A reduction in GST would have provided immediate relief to the healthcare sector, particularly for diagnostic and imaging technologies crucial to timely patient care.