New Delhi: As India prepares for the Union Budget FY25-26, healthcare and pharma industry leaders have voiced their expectations for transformative measures aimed at addressing systemic challenges, fostering innovation, and ensuring equitable access to quality care.
With the sector still recovering from the impacts of the pandemic, experts unanimously stress the need for increased investment, tax reforms and policy initiatives to create a robust, sustainable healthcare ecosystem.
Strengthening Health Insurance and Universal Coverage
Pankaj Tandon, Promoter, Founder & CFO of VitusCare, underscored the importance of expanding health insurance under schemes like Ayushman Bharat.
“Strengthening health insurance coverage, particularly for life-sustaining treatments such as dialysis, will be instrumental in reducing the financial burden on patients and their families,” he stated.
Tandon emphasized the need to expand insurance reach to underserved rural areas, subsidize premiums for low-income families, and incentivize private sector participation to make critical healthcare services affordable and accessible.
He also highlighted the tax-related challenges faced by healthcare providers due to the Goods and Services Tax (GST) exemption on the industry. Placing healthcare consumables and equipment in the lowest tax bracket could reduce financial burdens on providers, ensuring affordability for patients.
Diagnostics and Preventive Healthcare
Aditya Kandoi, Founder and CEO of Redcliffe Labs, advocated for prioritizing diagnostics infrastructure, especially in Tier 2, Tier 3 cities, and smaller towns, which host over 65 per cent of India’s population.
“Timely and accurate treatment hinges on accessible diagnostics,” Kandoi explained, urging the government to reduce taxes on diagnostic equipment, reagents, and consumables to lower costs.
He also stressed the importance of preventive healthcare, stating, “Non-communicable diseases account for over 60 per cent of preventable deaths in India. Investments in affordable diagnostics and tax exemptions can encourage individuals to prioritize their health.”
Kandoi called for increased budgetary support for research and innovation in fields like genomics, AI-driven diagnostics, and telemedicine to improve outcomes and establish India as a leader in healthcare innovation.
Meanwhile, Alok Katiyar, Co-founder, WeClinic Homeopathysaid: “We welcomed the 23.74 per cent increase in the Ministry of Ayush’s budget to Rs 3,712.49 crore for 2024-25 and this time we hope for continued support through increased funding for research, tax incentives for clinics and manufacturing, and integration into national healthcare initiatives.”
Investment in Digital Health and Technology
Digital health and technology have emerged as vital tools for advancing healthcare delivery. Kishore Karumanchi, CEO of Aciana, emphasized the role of artificial intelligence (AI) in personalized care. “Raising the exemption limit for health check-ups from Rs 5,000 to Rs 20,000 would encourage regular screenings and lower the disease burden,” he suggested.
Karumanchi also highlighted the need for greater R&D funding in genomics, AI diagnostics, and biotechnology, as well as tax breaks for healthcare startups to boost technological innovation.
Similarly, Nakul Batra, Partner at DSK Legal, advocated for incentivizing the adoption of the Ayushman Bharat Digital Mission. “The initiative can enhance privacy protection, improve accessibility, and streamline healthcare services, but high setup costs require financial support from the government,” he said.
Streamlined import duties on medical equipment and support for domestic manufacturing were also highlighted as measures to lower patient costs and improve access.
Public-Private Partnerships and E-commerce in Healthcare
Avinandan Choudhary, Founder and CEO of Formis Health, called for measures to foster innovation and expand access through digital platforms.
“A GST rebate for quick-commerce delivery of medicines could make healthcare essentials more affordable,” Choudhary noted.
He also emphasized grants for startups and simplified regulatory frameworks to encourage public-private partnerships, which could transform healthcare delivery in underserved regions.
Tackling the Urban-Rural Divide
Dr B S Ajaikumar, Executive Chairman of Healthcare Global Enterprises Limited, called for universal healthcare and better reimbursement models to bridge the urban-rural divide.
“Concrete measures, such as imposing a healthcare cess or establishing an endowment fund, are essential for addressing disparities,” he suggested. Investment in rural healthcare infrastructure and smart incentivization of private hospitals could significantly enhance accessibility and affordability.
On a similar note Alay Razvi, Managing Partner, Accord Juris said that the Budget should aim to strengthen the healthcare sector, focusing on critical areas like Ayushman Bharat, biotechnology R&D, and the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission.
“Customs duty exemptions on life-saving drugs will make treatments more affordable, encourage domestic manufacturing, and foster innovation. The real impact will depend on effective implementation and investment in public-private partnerships, with a focus on bridging the urban-rural healthcare divide for equitable access,” he noted.
Pharma Sector
Industry leaders like Ashwin Sapra, Partner at Cyril Amarchand Mangaldas, highlighted the pharma sector’s potential for growth. “To maintain the sector’s trajectory towards a $120 billion market by 2030, increased spending on public healthcare and tax incentives for domestic R&D are critical,” Sapra said.
He also stressed the need for reforms in the outdated Drugs and Cosmetics Act to align with current industry needs.
Biplab Lenin, Partner at Cyril Amarchand Mangaldas, echoed these sentiments, emphasizing the importance of sustainability and cutting-edge technologies. “Policies supporting research in targeted therapies and infrastructure development will strengthen India’s position as a global pharmaceutical hub,” he noted.
Addressing Cancer Care and Medical Education
Shivani Bhushan, Senior Associate at TAS Law, called for increased funding in cancer prevention and early detection. “One in nine Indians is at risk of cancer, and the focus should be on awareness, timely detection, and vaccinations, particularly in rural areas,” she said.
She also highlighted the need to expand medical education by increasing MBBS and postgraduate seats to build a skilled workforce.
The Road Ahead
The healthcare sector is calling for bold steps in the Union Budget 2025-26 to address its multifaceted challenges. Experts have urged the government to:
- Increase healthcare spending from the current 1.5-2.1 per cent of GDP to 2.5-3 per cent.
- Introduce GST reforms for diagnostics and medical supplies.
- Provide tax incentives for preventive healthcare and startups.
- Enhance public-private partnerships for infrastructure development.
- Boost funding for R&D and health-tech innovation.
By addressing these demands, the budget FY25-26 has the potential to create an inclusive and sustainable healthcare ecosystem, fostering long-term public health and economic growth.
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