Healthcare Pre-Budget 2026–27: Priorities for funding, digital health and system resilience

India’s healthcare sector is rapidly evolving due to rising incomes, an ageing population, and a shift toward chronic diseases The Government of India allocated ₹99,859 crore in FY2025-26, a notable 11 per cent increase from the previous FY 2024-25. Between 2012-13 to 2025-26, expenditure towards the Ministry of Health and Family Welfare (MoHFW) increased at an annual average rate of nearly 12 per cent. Against this backdrop, the upcoming Union Budget 2026-27 should be drafted keeping in mind the long-term vision for building a “Healthy India” to achieve ‘Viksit Bharat’ by 2047. Some of the key considerations and expectations for the health sector would be as mentioned below:

1. a)     Health AI budget under National Health Mission: A dedicated annual budget of at least INR 250 to 300 crore under the National Health Mission (NHM) to implement AI/ML-driven projects nationwide across public and private health sectors. To maximise impact, targeted grants or incentivisation models should be considered for adopting approved AI solutions.
2. b)     Cybersecurity Fund: A dedicated cybersecurity fund must be allocated within ABDM or MOHFW, for institutional strengthening, safeguarding personal health data, and compliance across public and private sector with the Digital Personal Data Protection (DPDP) Act 2023 and its recently released Rules 2025.
3. c)     Antimicrobial Resistance (AMR) Mitigation:  India faces one of the world’s highest AMR rates, with 1 in 3 bacterial infections resistant to common antibiotics (WHO GLASS, 2025). Under National Action Plan (NAP-AMR) 2.0 (2025–29), sufficient funding should support nationwide antibiotic stewardship, rapid diagnostics, and surveillance expansion.
4. d)     Centralised Medical Supplies Strengthening: Budget 2026 should allocate a dedicated fund under NHM for a centralised medical supply strengthening program. This must include end-to-end traceability of drugs, devices, and consumables through digital platforms, including strict quality audits, compliance enforcement, and public-private partnerships to ensure safe, reliable, and transparent supply chains nationwide
5. e)     Healthcare Sector Promotion & Infrastructure Development Fund: India’s healthcare sector holds immense potential for medical tourism and foreign investment. To realise this, a structured promotional program backed by a ₹5,000 crore Healthcare Infrastructure Development Fund would be essential for creating dedicated medicities/ zones and offering low-cost capital to private providers and PPP VGF for healthcare projects.
6. f)       Rationalisation of GST across healthcare inputs, devices, and digital health: Healthcare services are largely GST-exempt, but inputs like medical devices, diagnostic kits, AI software, and telemedicine platforms attract varying GST rates, creating embedded, non-creditable costs that inflate healthcare expenses. Budget 2026 can be expected to rationalise GST slabs and introduce a lower, uniform rate for these critical inputs.

 The Union Budget for FY 2026–27 can be a pivot toward universal health coverage, digital health, and biotech innovation, if paired with frontline capacity, AMR discipline, and insurance designs that cover everyday care. A measured increase in public health expenditure, executed through strong delivery systems, will matter more than headline allocations alone.