Union Budget 2026 | Strong thrust to health sector

New Delhi: The government on Sunday gave a strong push to upgradation and expansion of healthcare infrastructure, medical education and pharma sector with the Union Budget 2026-27 announcing a slew of steps, including those aimed at making India a global hub for allied healthcare professionals and biopharma manufacturing.

The Budget allocation for the Union Health Ministry has been enhanced to Rs 1,06,530.42 crore, reflecting an increase of nearly 10 per cent over the revised estimates of fiscal 2025-26, the health ministry said, calling it a "significant milestone" in the government's efforts to strengthen India's healthcare system.

To provide significant relief to patients, especially those undergoing cancer treatment, the budget proposed a full exemption of basic customs duty on 17 life-saving drugs and medicines. Also, seven additional rare diseases have been included for exemption of import duties on personal imports of drugs, medicines, and food for special medical purposes.

Building on an enhanced financial outlay, the Budget provides significant scheme-wise enhancements across key flagship programmes of the ministry, including e Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), Pradhan Mantri Jan Arogya Yojana (PM-JAY) and National Health Mission (NHM).

Presenting the Union Budget in Parliament, the Union Finance Minister Nirmala Sitharaman outlined a comprehensive roadmap for healthcare reforms, reinforcing the government's commitment to universal health coverage and inclusive growth under the leadership of Prime Minister Narendra Modi, the health ministry said in a statement.

The enhanced allocation, including strengthened financial support for the Department of Health Research (DHR) amounting to Rs 4,821.21 crore, a cumulative increase of over 194 per cent compared to the health budget of the financial year 2014-15.

The scheme component under the Ministry of Health and Family Welfare has been increased by Rs 6,175.96 crore (10.78 per cent), while the non-scheme component has risen by Rs 2,500.96 crore (6.32 per cent) over the revised estimates of FY 2025-26.

The allocation for the PM-JAY as been increased to Rs 9,500 crore, registering an increase of Rs 500 crore. Similarly, the allocation for NHM has been enhanced to Rs 39,390.00 crore, an increase of Rs 2,289.93 crore, to further strengthen primary healthcare delivery, maternal and child health services, and disease control interventions across states and Union Territories, the statement said.

A major thrust has also been accorded to healthcare infrastructure development under PM-ABHIM, with an allocation of Rs 4,770 crore -- comprising Rs 570 crore under the Central Sector component and Rs 4,200 crore under the Centrally Sponsored Scheme component as capital expenditure.

This represents an increase of Rs 1,925 crore, registering a 67.66 per cent rise over the revised estimates of FY 2025-26, for the scheme aimed at expanding critical care blocks, integrated public health laboratories, district and sub-district hospitals, and other health infrastructure facilities.

"The Union Budget 2026-27 accords strong priority to the upgradation and expansion of healthcare infrastructure and medical education, " the ministry said.

Recognising the growing healthcare demands arising from an ageing population, the rising burden of non-communicable diseases, and increasing global demand for skilled healthcare professionals, the government has proposed a phased plan outlay of Rs 980 crore over three years for the expansion and strengthening of allied and healthcare professionals' education, it said.

Under this initiative, Allied Health Professional Institutes in 10 key disciplines will be set up and upgraded to create nearly one lakh skilled professionals over the next five years, through public and private sector participation. Additionally, a focused programme will train 1.5 lakh geriatric caregivers, addressing the rapidly rising long-term care needs of India's elderly population.

These measures will enhance diagnostics, preventive, rehabilitative, and public health services while positioning India as a global hub for skilled allied healthcare professionals, it said.

The allocation for Human Resources for Health and Medical Education, including the establishment of new medical colleges, upgradation of undergraduate and postgraduate seats, and augmentation of nursing education, has been increased to Rs 1,725 crore, representing a rise of Rs 95 crore.

The Budget also provides a significant boost to medical research and innovation under the Department of Health Research. The allocation for the Indian Council of Medical Research (ICMR), New Delhi, has been enhanced to Rs 4,000 crore, registering a 26.98 rise over the revised estimates of FY 2025-26.

In the area of disease control and public health programmes, the allocation for the National AIDS and STD Control Programme has been increased to Rs 3,477 crore, a rise of Rs 815.50 crore.

This includes strengthened support for Blood Transfusion Services, with a provision of Rs 275 crore, marking an increase of Rs 75 crore, aimed at improving blood safety, availability, and quality standards nationwide, the ministry stated.

Under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), including establishment expenses of new AIIMS, the total allocation for 2026-27 stands at Rs 11307 crore, marking an increase of Rs 407 crore.

In addition to significant scheme-wise enhancements, the Union Budget 2026-27 also provides substantial increases under the Non-Scheme Component, aimed at strengthening premier healthcare institutions, improving service delivery and meeting establishment and operational requirements.

The allocation for AIIMS, Delhi has been enhanced to Rs 5,500.92 crore, reflecting an increase of Rs 262.22 crore. The allocation for the Central Government Health Scheme and Pensioners' Other Retirement Benefits has been increased to Rs 8697.86 crore, registering an enhancement of Rs 590.90 crore.

Further, the allocation for central hospitals has been raised to Rs 4,599.66 crore reflecting a 9.34 per cent rise, Strengthening Institutes of National Importance remains a key priority of this government, the ministry said.

Under the Pradhan Mantri Swasthya Suraksha Yojana, 22 new AIIMS have been approved, of which 18 are fully functional with teaching, research, OPD/IPD, emergency, and diagnostic services, while the rest are under construction.

The Union Budget also lays strong emphasis on strengthening India's drug regulatory and enforcement framework.

"The proposal to further strengthen the Central Drugs Standard Control Organisation (CDSCO) will add a fillip to the efforts to encourage pharmaceutical research and development, and complement the ongoing measures to reduce regulatory burden and promote ease of doing business while focusing on quality," the ministry said.

To propel India's leadership in advanced therapeutics, the Union Budget proposes a major push to the biopharmaceutical sector through the launch of the 'Bio Pharma Shakti' initiative, with a dedicated outlay of Rs 10,000 crore over the next five years.

This strategic programme will build a robust ecosystem for domestic production of biologics and biosimilars, reduce import dependence, enhance affordability, and strengthen India's position as a global biopharma manufacturing hub, while fostering innovation, research excellence, and high-end manufacturing capabilities.

As part of this strategy, a nationwide biopharma-focused academic and research network will be established through the creation of three new National Institutes of Pharmaceutical Education and Research (NIPERs) and the upgradation of seven existing NIPERs, fostering high-end research, skilled manpower development, and industry-academia collaboration.

The initiative will also establish a national network of 1,000 accredited clinical trial sites, significantly strengthening India's clinical research ecosystem, accelerating innovation, and positioning the country as a preferred global destination for ethical, high-quality, and efficient clinical trials.

The Budget provides for the upgradation of premier mental health institutions at Ranchi and Tezpur, along with the establishment of a NIMHANS in North India.

To accelerate the digital transformation of healthcare delivery, the allocation for the Ayushman Bharat Digital Mission has been enhanced to Rs 350 crore, reflecting an increase of Rs 25.74 crore.

The budget also proposes the establishment of Emergency and Trauma Care Centres in every district hospital.