The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, was projected as a transformative roadmap for India’s healthcare sector. With a record allocation of ₹98,311 crore, it promised to address critical gaps in healthcare infrastructure, affordability, and accessibility. However, the budget presents a mix of breakthroughs, missed opportunities, and lingering concerns.

Pre-Budget Expectations vs. Post-Budget Reality

Medical Devices: A Stalled Transformation

Expectation:

The medical device sector had hoped for a dedicated regulatory authority, a reduction in import duties on high-end medical equipment, and strong investments in AI-driven healthcare innovation and indigenous manufacturing.

Reality:

While the budget announced exemptions on basic customs duty for 36 life-saving drugs, there was no reduction in import duties for critical medical devices. The long-awaited independent regulatory framework remains absent, leaving industry leaders frustrated.

Analysis:

With the sector projected to grow to $50 billion by 2030, a lack of policy support may hinder India’s ambition to become a global manufacturing hub. According to the Association of Indian Medical Device Industry (AIMED), reducing dependency on imports is crucial, but without clear policies, this goal remains elusive.

Femtech and Women’s Healthcare: A Neglected Priority

Expectation:

The healthcare industry had urged the government to allocate funds for large-scale preventive screenings, strengthen maternal healthcare in rural areas, and promote femtech innovations.

Reality:

Despite increased healthcare funding, there was no direct allocation for women’s healthcare or femtech. The announcement of 200 new cancer care centres was a commendable step, but the absence of gender-focused initiatives remains a glaring oversight.

Analysis:

With maternal mortality rates in rural India still alarmingly high, the lack of targeted interventions is a setback. Experts argue that a well-funded femtech sector could bridge critical gaps, but the government’s silence on this front raises concerns about its commitment to gender-inclusive healthcare.

(Source: NFHS-5)

Hospital Sector: Steps Forward, But Not Enough

Expectation:

The hospital sector sought investment in digital health, expansion of telemedicine, measures to address the shortage of medical specialists, and a boost to medical tourism.

Reality:

The budget announced an increase of 10,000 medical seats, with a long-term goal of 75,000. The ‘Heal in India’ initiative received a push through enhanced PPP models, yet rural healthcare infrastructure and specialist shortages were left unaddressed.

Analysis:

While the focus on medical education and tourism is welcome, the rural healthcare sector remains neglected. According to Rural Health Statistics 2024, there is a 35 per cent shortage of specialists in rural hospitals, proving that much more needs to be done.

Eye Care: A Blind Spot in the Budget

Expectation:

The eye care sector called for incentives to promote public eye health programs and address disparities in access to advanced treatments in Tier II and III cities.

Reality:

Despite the growing need for preventive eye care, the budget made no specific announcements.

Analysis:

With over 12 million blind individuals in India, 80% of whom suffer from preventable conditions, this omission is a major misstep. Experts believe targeted incentives could have improved the accessibility and affordability of vision care nationwide.

(Source: NPCB)

Healthcare Insurance: A Mixed Bag

Expectation:

The insurance sector hoped for GST relief on health insurance for MSMEs and tax incentives for wellness-linked benefits.

Reality:

While gig workers were included under Ayushman Bharat, GST relief and wellness incentives were ignored.

Analysis:

With only 30 per cent of Indians covered by health insurance, the lack of meaningful tax incentives remains a missed opportunity to drive preventive healthcare adoption.

(Source: IRDAI)

Life Sciences and Healthcare Infrastructure: Incremental Progress, But No Major Push

Expectation:

The life sciences sector expected policies to position India as a global leader in biotech innovation, while healthcare experts demanded a dedicated Healthcare Capex Fund.

Reality:

The budget promised broadband connectivity for primary health centres but lacked a dedicated Healthcare Capex Fund or major investments in life sciences.

Analysis:

Given that India ranks 145th out of 195 countries in healthcare infrastructure (WHO), bolder investments were necessary. The absence of a clear strategy for biotech and life sciences could hinder India's global competitiveness in medical research and innovation.

Comparing Union Budgets: 2024 vs. 2025

The 2025 budget increased overall healthcare funding but failed to address the systemic issues plaguing the sector. While progress was made in certain areas, major expectations remain unfulfilled.

The Union Budget 2025-26 brought commendable strides in cancer care, medical education, and medical tourism. However, it missed the mark on several crucial fronts, including rural healthcare infrastructure, women’s health, medical devices, and eye care.

As India strives to achieve its $5 trillion economy target, the healthcare sector must be at the core of this transformation. While this budget lays a foundation, several pressing issues remain unaddressed. The government's future priorities will play a crucial role in shaping India’s healthcare landscape.