Vishal Bali, Executive Chairman, Asia Healthcare Holdings 

India has recently surpassed Japan to become the 4^th largest economy. Yet the contrast in public health spending remains stark – Japan allocates nearly 10-11 per cent of its GDP to healthcare, while India continues to hover between 1.6-1.9 per cent.  

The Budget was expected to deliver major reforms for healthcare growth, including a strong push for domestic medical technology manufacturing. Total healthcare allocation rose marginally from ₹99,858 crore in 2025 to ₹1,04,599 crore in 2026, keeping public health spending as a share of GDP well below global levels. However, the ₹10,000 crore commitment to position India as a global biopharma manufacturing hub over five years is a positive step. Overall, healthcare allocations still fall short of an inflection point, given widening demand–supply gaps and rising medical technology import costs amid rupee depreciation in recent years.  

Healthcare in the Broader Economic Landscape 

As India confronts rising incidences of diabetes, cancer, cardiovascular and auto-immune disorders, the healthcare system must evolve from reactive treatment models to preventive, integrated care frameworks. The Budget’s emphasis on digital infrastructure, biopharma innovation, and skilled workforce development is significant at a time when medical inflation and out-of-pocket expenditure strain households. 

For healthcare institutions – both public and private, the roadmap is clear: capitalise on these reforms to build capacity, improve quality, reduce out-of-pocket spending, and extend access through digital and insurance-led innovations. Together, these measures form the foundation of a sustainable healthcare ecosystem. 

Expanding Ayushman Bharat Coverage 

Financial protection remains central to improving healthcare access. Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY) has extended coverage to millions of families, with state-level variants strengthening last-mile delivery. However, the success of Ayushman Bharat hinges on execution – wider coverage, deeper hospital empanelment, and integration with digital health platforms. 

Budget 2026 reinforces this vision by strengthening district hospitals and expanding emergency and trauma care capacity by 50 per cent, particularly in Purvodaya states and the North-East, where medical emergencies push families into catastrophic expenditure. 

Workforce Development: A Competitive Priority 

India’s healthcare ambitions cannot be realised without addressing workforce shortages. Budget 2026 takes a step by committing 1 lakh Allied Health Professionals (AHPs) over a period of five years by upgrading existing institutions and establishing new ones across government and private sectors.  

Beyond numbers, the Budget recognises structured career pathways. NSQF-aligned programmes will train 1.5 lakh multi-skilled caregivers, combining care competencies with allied skills such as wellness, yoga, and operation of medical assistive devices, strengthening geriatric care systems. Faculty quality matters. While medical colleges expand, partnerships enabling private-sector clinicians to serve as adjunct faculty in government institutions will improve educational outcomes. 

Digital Health, Biopharma and Innovation 

Digital health remains a cornerstone of system integration. Support for interoperable health records, telemedicine networks, tele-NICU services, and immunisation tracking aligns with the Ayushman Bharat Digital Mission. Complementing this is the government’s AI Mission, ensuring technology adoption benefits all - from farmers and women in STEM to youth seeking upskilling opportunities and Divyangjan accessing assistive technologies. 

The ₹10,000 crore Biopharma Shakti scheme over five years signals a push towards research, development, and manufacturing in response to India’s evolving disease profile. The creation of a biopharma-focused network, including three new NIPERs and the upgradation of seven existing institutes, with over 1,000 accredited clinical trial sites and a strengthened CDSCO, positions India as a global life sciences hub. 

Inclusive Care, Mental Health and Medical Tourism 

Budget 2026 signals a decisive shift towards inclusive, affordable, and globally competitive healthcare. From empowering Divyangjan through AI-enabled assistive technologies and strengthening mental healthcare infrastructure with new and upgraded national institutes, to positioning India as a hub for medical value travel via integrated medical tourism clusters, the Budget broadens both access and opportunity. A clear effort towards affordability push was seen such as customs duty exemptions on critical cancer drugs and rare disease therapies build on earlier GST reforms to ease the financial burden on patients. These measures form healthcare in India not just as a social necessity, but as a growth engine for innovation, employment, and global leadership. 

In sum, Union Budget recognises healthcare as a driver of growth and wellbeing, but investment levels remain modest. While initiatives in biopharma, digital health, workforce development, affordability, and regional capacity are positive, they stop short of a decisive inflection point, leaving a gap between ambition and public spending requirements. 

The writer is Executive Chairman, Asia Healthcare Holdings 

Published on February 2, 2026