In this pre-Budget commentary, Dr Sabine Kapasi (CEO at Enira Consulting Pvt Ltd, Founder of ROPAN Healthcare Private Limited and UN advisor) outlines why incremental spending is not enough and calls for bold fiscal choices on infrastructure, MedTech-focused PLI 2.0, digital and AI capacity, affordable financing, R&D incentives and preventive care.
The Union Budget 2026 will show if healthcare is treated as a growth sector or only as a welfare expense. Hospitals are under pressure, patient demand is rising, and medical education and workforce capacity lag. Demand is rising, capacity is uneven, and global supply chains are unreliable. Small funding bumps will not alone fix this. The budget has to deliver scale, domestic capability, and technology-led delivery.
Expanding Hospitals and Medical Colleges Where Demand Is Rising
Healthcare access mirrors India’s urban hierarchy. Tier 1 cities get advanced care. Tier 2 cities have the disease burden but not the institutional capacity. Budget 2026 has to fund hospital and medical college expansion across both tiers.
These institutions should anchor regional networks. They need to combine tertiary care, medical education, and specialist training. Linking medical colleges to district hospitals strengthens referral systems and provides practical clinical training. Nursing and allied health programs must grow alongside to fill ongoing workforce gaps. Capital spending should focus on projects with clear timelines, repeatable designs, and defined service obligations under public–private arrangements. Healthcare infrastructure creates jobs, drives regional development, and builds system resilience. The budget can use this as an economic tool.
PLI 2.0 and the Shift from Molecules to Machines
India imports most of its medical devices and equipment. Imaging systems, critical care equipment and high-value diagnostics all come from overseas. Budget 2026 is expected to launch PLI 2.0, moving the focus from pharma to medical technology.
Domestic pharma manufacturing is mature. Medical technology manufacturing isn’t. The redesigned PLI should back medical devices, diagnostics, and hospital equipment. Incentives should tie to R&D spending, component localisation, and actual product innovation.
This can’t just be about assembly. Incentives should reward companies that own designs, validate products clinically, and build export capacity. A domestic med-tech base cuts import dependence, brings down costs, and secures supply during crises. It also puts India in a position to supply emerging markets.
Digital Health and National AI Capacity
Data drives modern healthcare. Patient management, diagnostics, and public health monitoring depend on connected systems and secure data sharing. Budget 2026 should support investments in national digital infrastructure and interoperable platforms to ensure hospitals and clinics can access and use information effectively.
Medical education has to catch up. Training doctors and healthcare workers on AI tools improves efficiency and cuts diagnostic variation. Funding AI-driven learning platforms, simulation tools, and faculty training gets the workforce ready.
India has the digital infrastructure. AI investment in healthcare will decide whether the country leads in scalable, cost-efficient delivery.
Affordable Financing for Healthcare Expansion
Healthcare projects eat capital over long periods. Hospitals, diagnostic units, manufacturing facilities and research centers all have extended gestation. Budget 2026 should set up a dedicated healthcare financing fund.
A health cess and structured CSR contributions can back this. The point is to lower capital costs for priority investments, especially in underserved regions and high-impact areas.
Blended finance models pull in private capital while keeping public control. Cheaper financing speeds up infrastructure creation, evens out regional inequity, and reduces reliance on short-term debt. It balances fiscal discipline with sector needs.
Restoring R&D Incentives to Drive Innovation
Healthcare innovation needs consistent research funding. Pulling enhanced tax incentives slowed private R&D across pharma, biotech, and medical technology. Budget 2026 is expected to bring back the 200 percent weighted deduction for R&D spending.
This could free up capital for new drug development, advanced diagnostics, and homegrown medical devices. Healthcare innovation cycles are long and expensive. Tax incentives give companies predictability and room to take risks.
India wants to move up the healthcare value chain. That takes aligned policy. Bringing back R&D incentives strengthens domestic IP and global competitiveness.
AYUSH Integration and Preventive Screening
Healthcare policy has to match India’s demographic and disease patterns. Budget 2026 can back structured AYUSH integration to boost medical tourism and wellness services. Success depends on standardisation, clinical validation, and institutional support.
Preventive healthcare requires targeted investment. Nationwide screening for Breast Cancer and Sickle Cell Anemia detects cases early and lowers long-term treatment costs. These programs improve population health and workforce outcomes. Screening infrastructure, diagnostics, and follow-up care need steady, predictable funding. Investing in prevention reduces future treatment costs.
Budget 2026 will determine how healthcare priorities translate into spending. Choices on infrastructure, domestic manufacturing, digital systems, financing, and research will shape capacity over the next cycle. The policy direction is stated. The allocations will show whether execution follows.
