Credit: Sugandh Khandelwal
As India gears up for the Union Budget 2025, healthcare leaders are voicing their expectations for increased public spending and stronger incentives to foster innovation in the sector. With the lessons of the COVID-19 pandemic still fresh and a growing population demanding accessible, high-quality healthcare, the spotlight is on how the government can address these critical needs.By increasing public spending, supporting innovation, and prioritizing affordability, India can move closer to achieving its vision of “Health for All.” As the nation awaits the budget announcement, the healthcare sector remains optimistic that its needs will find a prominent place in the government’s agenda.
Healthcare Industry seeks tax cuts on insurance premiums & increased budgetary allocation in Budget 2025.The healthcare sector has consistently advocated for higher allocations in public health expenditure, which currently stands at just over 2.1% of GDP. Experts argue that this needs to be increased to at least 3% of GDP to align with global standards and ensure robust healthcare infrastructure.
Leaders have emphasized the need for more funding in rural healthcare, where accessibility remains a significant challenge. Investments in primary health centers, skilled personnel, and supply chains are seen as essential to bridging the urban-rural divide. The Union Budget 2025 presents a critical opportunity for the government to address long-standing gaps in the healthcare system and prepare for future challenges.
What are the key healthcare priorities for the Union Budget 2025?
The Union Budget is expected to address the affordability of healthcare. Leaders are calling for the extension of health insurance coverage under schemes like Ayushman Bharat and subsidies for essential medicines. They also propose tax exemptions on healthcare-related expenses to ease the financial burden on citizens.With initiatives like Ayushman Bharat Digital Mission gaining traction, stakeholders are urging the government to allocate funds for building a robust digital health ecosystem. Digitizing patient records, expanding telemedicine services, and integrating AI in diagnostics are seen as critical to improving efficiency and accessibility.
Another key demand from the healthcare industry is enhanced support for innovation and research.Industry leaders have proposed tax benefits for companies investing in research and development, as well as grants for academic institutions collaborating on healthcare innovation.India’s pharmaceutical and biotechnology sectors, which are already recognized globally, require additional incentives to stay competitive in advanced research areas such as biotechnology, AI-driven healthcare, and personalized medicine.
What prominent industry figures expect from the upcoming budget?
Dr. Suneeta Reddy, Managing Director of Apollo Hospitals, has articulated several key expectations for the Union Budget 2025, focusing on enhancing healthcare infrastructure, reducing treatment costs, and improving accessibility for patients across India.Dr. Reddy emphasizes the need for strategic reforms in the healthcare sector in the Union Budget 2025. She advocates for an Infrastructure Linked Incentive Scheme that provides 50% capital expenditure incentives for hospitals with over 100 beds to drive infrastructure development. To reduce treatment costs, she calls for rationalized customs duties on advanced medical equipment and targeted therapy drugs.
Additionally, she highlights the importance of lowering input GST on healthcare services and reducing GST on health insurance premiums to enhance affordability and penetration. Dr. Reddy also suggests implementing mandatory health insurance coverage for companies with more than 20 employees to expand healthcare access. Furthermore, she underscores the need for budgetary support to promote telehealth and digital healthcare services, which can improve accessibility, especially in remote areas, while reducing the strain on physical infrastructure.
Dr. Ashutosh Raghuvanshi, MD and CEO of Fortis Healthcare Ltd, has emphasized the need for increased public healthcare spending in the Union Budget 2025. He advocates raising healthcare expenditure to at least 2.5% of GDP to strengthen the sector. Dr. Raghuvanshi also calls for the designation of healthcare as a national priority, aiming to establish India as a global healthcare powerhouse.
He highlights challenges such as a shortage of skilled workforce, indirect taxation issues, and unused Minimum Alternate Tax (MAT) credit, and urges the government to implement transformative measures to address these issues. Additionally, he emphasizes the importance of policies conducive to private sector investment and the strengthening of public-private partnerships to boost the adoption of digital healthcare services and promote medical value travel.
Gautam Khanna, CEO, P.D. Hinduja Hospital & Medical Research Centre emphasizes the need for increased healthcare funding in the Union Budget 2025, advocating for an allocation of 2.5-3% of GDP to enhance infrastructure, especially in Tier 2 and 3 cities, and to strengthen primary care through expanded Public Health Centres. He also calls for addressing the shortage of healthcare professionals by increasing funding for medical education and skill development programs.
Additionally, he also suggested reforms in health insurance to improve accessibility, including expanding the Ayushman Bharat scheme beyond its current beneficiaries and providing tax incentives for private insurance adoption. He advocates for investments in preventive healthcare, such as nationwide screening centers and wellness programs, to shift the focus from curative to preventive care. To facilitate healthcare expansion, Khanna recommends long-term infrastructure financing options with lower interest rates and longer repayment periods, along with tax breaks.
As well as proposes shifting hospitals from the GST exemption category to zero-tax to allow input credit, thereby lowering treatment costs for patients. Furthermore, Khanna emphasizes the importance of digital health transformation, expecting investments in AI-driven diagnostics, telemedicine infrastructure, and electronic health records to bridge the urban-rural healthcare divide.
