Published Feb 01, 2026 | 7:14 PM ⚊ Updated Feb 01, 2026 | 7:14 PM
The government announced Biopharma Shakti, allocating ₹10,000 crore over five years to build a domestic biologics and biosimilars ecosystem.
Synopsis: The Union Budget 2026 has drawn a mixed response from health experts, with praise for cancer drug duty relief and biopharma investments, but strong criticism for neglecting primary healthcare and preventive services despite a record allocation for the health ministry. While industry-focused measures such as Biopharma Shakti, medical tourism hubs and workforce expansion are seen as beneficial for research, jobs and high-end care, experts say they do little to address everyday needs.
The Union budget 2026-27 drew praise for cancer drug relief and biopharma investment but faced criticism for neglecting primary healthcare and missing public spending targets.
Dr Ravi Wankhedkar, past national president of the Indian Medical Association, termed the budget “highly disappointing and directionless for the health sector”.
“There is nothing special or transformative for healthcare in this budget,” Wankhedkar stated. “Maximum emphasis and priority have been given to the pharmaceutical and AYUSH sectors, while primary healthcare and public health infrastructure have been completely neglected.”
The Ministry of Health and Family Welfare receives ₹1,05,530 crore, according to budget documents, marking a record allocation. However, experts questioned whether the increase addresses core healthcare needs.
The government announced Biopharma Shakti, allocating ₹10,000 crore over five years to build a domestic biologics and biosimilars ecosystem. The initiative targets treatments for cancer, diabetes and autoimmune diseases.
Shreevalli V, COO of Kinder Women’s Hospital And Fertility Centre in Bangalore, welcomed the move. “This initiative will boost research and innovation in the biotechnology and pharma sectors,” she noted.
The programme includes three new National Institutes of Pharmaceutical Education and Research, upgrades to seven existing institutes, and over 1,000 clinical trial sites.
Dr Ranga Reddy Burri from the Infection Control Academy of India in Hyderabad acknowledged the potential. “Biopharma factories and new hubs may lower future NCD treatment costs and create jobs,” he stated. However, Burri added a caveat: “But won’t immediately ease rural maternal care, TB follow-up, hypertension/diabetes management, or child immunization.”
The budget exempts basic customs duty on 17 cancer drugs and extends exemptions to seven additional rare diseases for personal imports of medicines. Dr Bollineni Bhaskar Rao, CMD of KIMS Hospitals, called this “a highly commendable move that will significantly reduce treatment costs and improve access to life-saving therapies for patients”.
Dr Gayatri Kamineni, COO of Kamineni Hospitals, stated: “By reducing import duties on these critical medicines, the government has taken a positive step in easing access to life-saving treatment outcomes.”
The exemptions provide immediate price relief for imported therapies that currently burden families with catastrophic expenses.
The budget proposes five regional medical hubs offering integrated care across modern medicine, AYUSH systems, diagnostics, rehabilitation and medical tourism. Dr Issac Mathai, founder chairman and medical director of SOUKYA International Holistic Health Centre, supported this direction.
“Budget 2026 advances this legacy through the proposal to create five regional medical hubs that integrate treatment, education and research within a single ecosystem,” he stated.
The budget plans three new All India Institutes of Ayurveda and strengthens the WHO Global Centre for Traditional Medicine in Jamnagar.
Mathai saw potential in the traditional medicine integration: “The inclusion of Ayush centres reflects a deliberate move to bring traditional systems into the core of healthcare delivery especially with the burden of non-communicable diseases growing many folds.”
Wankhedkar disagreed with this priority. “The promotion of medical tourism will not benefit the common man; instead, it will largely help the private corporate hospital sector,” he argued.
Wankhedkar pointed to another gap: “There is no concrete policy or incentive for boosting the manufacturing of medical devices in India, which is a major missed opportunity under the Make in India initiative.”
The budget aims to train 1 lakh allied health professionals in optometry, radiology, anaesthesia and behavioural health. The plan includes NIMHANS-2 in Ranchi and trauma and emergency upgrades in district hospitals.
Wankhedkar identified this as the sole positive element. “The only positive aspect of this budget is the proposal to develop and strengthen paramedical manpower, which can contribute meaningfully to healthcare delivery in the long run,” he stated.
However, ASHAs, ANMs and community health staff receive no major pay increases, job security provisions or career development paths in the budget announcements. “Despite their role in vaccination, maternal and child health, and surveillance,” Burri noted, these workers remain without significant support.
Burri highlighted gaps in prevention and primary healthcare. “Limited emphasis on Health & Wellness Centres, National Health Mission scaling, NCD screening, immunization outreach, or community-level interventions,” he noted. The budget offers little expansion of insurance or outpatient coverage beyond select exemptions. “Everyday costs for OPD, diagnostics, chronic medications drive impoverishment,” Burri explained.
Public health expenditure remains below the 2.5 percent of GDP target set in National Health Policy 2017. Current spending stands at approximately 1.8-2 percent of GDP. “No roadmap or major jump to close the gap for universal coverage,” Burri stated.
He added that out-of-pocket burden, which accounts for 45-50 percent of total health spending, receives insufficient attention in the budget.
Prasanna Saligram, public health researcher at Sarvatrika Arogya Andolana Karnataka, challenged what he termed “headline management” of the health allocation. “Health as a percent of total budget remains stagnant at 2 percent. As a proportion of GDP, health is down to 0.27 percent from 0.28 percent in previous years,” Saligram stated. “So overall there is no increase in commitment to the health budget by the Union government.”
The National Health Policy 2017 goal of achieving 2.5 percent of GDP by 2025 remains distant. “The Union government as per that policy should be budgeting 1 percent of GDP which should be ₹350,000 crore but have budgeted a lowly amount of only ₹110,939 crore, which is only 31 percent of the policy target,” Saligram explained.
Wankhedkar challenged the record allocation claim. “There is no real increase in health sector allocation in percentage terms. In fact, after adjusting for inflation, the effective allocation is actually reduced,” he stated.
Within the health budget, which increased by 10 percent in nominal terms over the previous year, disparities emerge across departments. AYUSH saw an increase of 20 percent and health research 23 percent, but the Department of Health and Family Welfare received only 9.5 percent.
Saligram highlighted a concerning shift within the Health and Family Welfare budget. “NHM, the largest component, has seen a decline from 44.5 percent of HFW in 2024-25 to 38.7 percent in 2026-27,” he noted.
“At the same time, fascination with PMJAY continues, and budgetary allocation which was 7.9 percent in 2024-25 increased to 9.34 percent in 2026-27, despite evidence to the contrary that they have failed on multiple fronts to ensure access to healthcare.”
The pattern from previous years continues. After the 2021 spike to ₹1.08 lakh crore driven by COVID vaccination spending, allocations fell to ₹86,200 crore in 2022-23 and ₹83,149.4 crore in 2023-24 before gradually recovering.
Saligram identified another concern regarding the federal structure. “There is a decline of transfer to states from the health budget from 54 percent in 2024-25 to 51 percent in the current budget, which is mostly NHM and hence further shifts the burden of spending especially for NHM to states,” he stated.
Burri outlined what experts urge the government to prioritise. Civil society demands a roadmap to 2.5-3 percent GDP public health spending, guaranteed and timely funds for the National Health Mission and Health and Wellness Centres, outpatient, diagnostic and chronic care inclusion in insurance schemes, fair wages, protection and career paths for frontline workers, and price safeguards ensuring biopharma investments benefit domestic patients first.
“Budget 2026 strengthens India’s health industry and global positioning but falls short on building a robust, equitable public health system,” Burri concluded. “Real progress for people’s lives demands shifting the centre to prevention, primary care, and affordability in future budgets.”
The budget reveals a divide between industry-focused initiatives and public health infrastructure. Biopharma investment and duty exemptions address specific high-cost treatments. However, these measures do not extend to everyday healthcare needs that affect the majority of the population.
Saligram criticised the absence of policy direction. “While one cannot expect too much from budgetary pronouncements, budgets are also seen as a statement of intent by the governments in terms of policy direction. But this lacks an overall policy direction towards increasing health of the people,” he stated.
“The current government including the finance minister thinks that health is about disease treatments and has done some tinkering to some of the disease-based programmes.”
The researcher pointed to structural issues the budget ignores.
“There is no appetite to tackle some of the structural issues such as continued underinvestment in health system. No intent expressed to bringing in a universal health system. Nothing around containing of the costs of treatment in private sector, on which there is an ongoing Supreme Court case in which the Union government is a respondent, but on the contrary encouraging medical tourism,” Saligram noted.
He identified gaps in health promotion measures. “Even though health is a state subject, nothing in the budget statement to encourage states to enact Right to Health Act. There is nothing in it for health promotion such as regulating harmful ultra processed foods which are one of the reasons for non-communicable diseases,” Saligram stated.
Burri framed the challenge clearly: “Without stronger primary and preventive investment, late-stage diseases rise, pushing higher family and government costs and inequities.”
The focus on tertiary care, medical tourism and pharmaceutical manufacturing benefits select groups and institutions. Rural maternal care, tuberculosis follow-up, hypertension and diabetes management at community level, and child immunisation programmes receive limited attention in the budget allocation pattern.
Vulnerable populations including the poor, rural residents and elderly citizens still face high out-of-pocket risks. Targeted relief helps some patients, but systemic affordability remains unaddressed. Yet concerns about “mixopathy” persist among allopathic practitioners.
The budget proposes integration without clear protocols or quality standards for combining treatment systems.
Wankhedkar’s assessment captured the disconnect: “Overall, this is a bland and uninspiring budget for the health sector, and the government has missed a crucial opportunity to strengthen primary healthcare and public health systems in India.”
