Union Budget 2025: What India’s healthcare and med-tech sectors expect

By implementing strategic reforms, we can pave the way for a robust, equitable, and innovative healthcare system. Expanding hospital capacity, viable reimbursement frameworks, reducing treatment costs, and advancing medical education will not only address current challenges but also secure India’s position as a global healthcare leader. These efforts will ensure a healthier and more sustainable future for all.

Thus, the sector’s recommendations, voiced through NATHEALTH, call for a significant increase in healthcare budget allocation to over 2.5% of GDP, with a focus on the following key areas:

• • Reducing Cancer Care Costs: Remove customs duties and reduce GST to 5% on oncology radiation equipment, such as LINACs, to expand cancer treatment capacity in underserved regions
  •  Redirecting Public Health Revenues: Allocate proceeds from healthcare CESS and the proposed 35% GST slab on tobacco and sugar products to strengthen public health programmes. Advocate for a unified 5% GST on all healthcare goods and services to reduce input costs
  • Encouraging Vertical Expansion of Hospitals: Permit hospital heights up to 60 metres nationwide (from the current limit of 45 metres), supported by funding for fire safety upgrades to ensure compliance in high-rise healthcare facilities.
  • Strengthening Health Infrastructure: Add 2.5–3.0 million hospital beds nationwide through Viability Gap Funding (VGF) and long-term, low-interest capital investments, fostering participation from mid-sized and smaller healthcare providers.
  • Viable Insurance Reimbursement Rates: Index reimbursement rates under schemes such as CGHS, PMJAY, and ECHS to the Consumer Price Index (CPI) to ensure financial viability, given that many rates have remained unchanged for nearly a decade.
  • Expanding Medical Education: Increase MBBS and postgraduate medical seats through government-led investment, supported by alternative financing mechanisms such as loans and interest subventions. Increase tuition fees for private DNB programmes by 75%-100% to fund capacity expansion. 
  • Advancing Digital Health: Launch a 10-year digital health incentive plan to enable the adoption of Ayushman Bharat Digital Mission (ABDM) infrastructure, enhance data security, implement electronic health record (EHR) systems, and upskill technical resources. Foster collaboration between industry, academia, and start-ups to drive digital innovation.
  • Promoting India as a Healthcare Hub: Establish a dedicated fund to position India as a leader in high-quality healthcare and medical tourism, with targeted investments in critical and holistic health services.
  • Funding R&D in the Med-tech sector: Announce a fund to support R&D and reward Med-tech innovation in India (including GCC’s) while transitioning to quality linked standardised procurements norms towards value-based care.

—The author, Abhay Soi, is President, Healthcare Federation of India (NATHEALTH), and Chairman & Managing Director, Max Healthcare Institute Limited. The views are personal.