Union Budget 2026: Emphasising taking the health sector of the country to the next level, Union Finance Minister Nirmala Sitharaman announced key allocations for the sector.
A major attraction of the budget is the launch of BioPharma Shakti, an initiative backed by an allocation of Rs 10,000 crore over five years. This aims to build India into a global biopharma hub, as per Sitharaman, which is expected to strengthen the life sciences and biotechnology ecosystem. It will also help in boosting domestic production of advanced medicines such as biologics and biosimilars, which are critical for treating cancers, autoimmune disorders, and other complex conditions that were previously dependent on imports.
Strengthening of the Central Drugs Standard Control Organisation (CDSCO) to improve regulatory standards and speedier approvals was also proposed, aligning Indian drug regulation with global norms.
Sitharaman proposed the launch of a scheme to support states in establishing five regional medical hubs, in order to promote 'medical tourism'. These hubs will serve as integrated healthcare complexes that combine medical, educational and research facilities. They will have AYUSH Centres, Medical Value Tourism Facilitation Centres and infrastructure for diagnostics, post-care and rehabilitation. Diverse job opportunities for health professionals, including doctors and AHPs can be expected through these hubs.
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To promote traditional medicine, the Finance Minister proposed to:
(i) set up 3 new All India Institutes of Ayurveda
(ii) Upgrade AYUSH pharmacies and Drug Testing Labs for higher standards of certification ecosystem, and make available more skilled personnel
(iii) Upgrade the WHO Global Traditional Medicine Centre in Jamnagar to bolster evidence-based research, training and awareness for traditional medicine.
Importantly, mental health received special attention with the launch of a second NIMHANS campus in North India and the upgrading of National Mental Health Institutes in Ranchi and Tezpur as Regional Apex Institutions.
A strong 'Care Ecosystem', covering geriatric and allied care services, is being focused on by the government, for various programmes will be developed to train multi-skilled caregivers. Training will involve combining core care and allied skills, such as wellness, yoga and operation of medical and assistive devices. It has also been proposed to train 1.5 lakh caregivers in the coming year.
Sitharaman also announced that existing institutions for Allied Health Professionals (AHPs) will be upgraded and new AHP institutions will be established in the private and government sectors. This is expected to cover 10 selected disciplines, including optometry, radiology, anesthesia, OT Technology, Applied Psychology and Behavioural Health and the addition of 100,000 AHPs over the next 5 years.
Ministry of Health and Family Welfare was allocated a total of Rs 106530.42 crore, of which the Department of Health and Family Welfare was allocated 101709.21 crore and the Department of Health Research was allocated 4821.21 crore.
Ministry of Ayush was granted Rs 4408.93 crore in this budget.
Reactions:
"We welcome the emphasis to deepen India’s life sciences and innovation ecosystem through Biopharma SHAKTI, including new and upgraded education and research institutions and a nationwide network of 1000 accredited clinical trial sites. These steps will accelerate the development of advanced therapies and reinforce India’s position as a trusted global destination for healthcare and life sciences," said Dr Prathap C Reddy, Chairman, Apollo Hospitals.
" The Union Budget 2026 presents a dual-speed vision for Indian healthcare. The strategic shift toward Biopharma innovation, specifically the ₹10,000 crore outlay for biologics and complex medicines, is a visionary move that positions India as a global research hub. Furthermore, the decision to lower the cost of treatment for cancers and rare diseases through customs duty exemptions is a life-saving intervention for thousands of families. I particularly welcome the focus on neuropsychiatric health with the announcement of NIMHANS 2. Given the rising burden of neurological diseases, strengthening mental health infrastructure is no longer optional; it is a necessity. However, we must ensure our priorities remain grounded in evidence-based medicine. While the push for Ayush is significant, the government must simultaneously prioritize the infrastructure of tertiary care centers. In critical emergencies, like strokes, heart attacks, and road accidents, it is modern medicine that serves as the immediate lifesaver," said Hyderabad-based Neurologist Dr Sudhir Kumar.
“The Budget’s focus on building capacity for mental healthcare across the country is a much-awaited step. Significant announcements include upgrade of existing institutions for allied mental health professionals—including applied psychology and behavioural health and the announcement of new mental health institutes in Tezpur and Ranchi along with a second NIMHANS in North India; all signaling a clear intent to strengthen public infrastructure & timely trauma support," said Neha Kirpal, Founding Cohort Member, India Mental Health Alliance (IMHA).
Dr Sudhir believes that to democratise healthcare, we need a 'bottom-up' approach. "Upgrading government hospitals where the masses seek care and lowering the barriers to private healthcare for the lower-middle class. Reducing GST on essential drugs and providing tax incentives for private hospitals in Tier 2 and Tier 3 cities would have been pivotal steps toward universal health accessibility. While promoting medical tourism is a sound economic strategy, our primary focus must remain on ensuring that every Indian, regardless of income, can access quality, life-saving care," he said.
"The Union Budget 2026-27 reinforces a people-first healthcare agenda rooted in capacity building and last-mile delivery. The focus on expanding the allied health workforce, targeting 100,000 professionals over five years, along with training 1.5 lakh caregivers under NSQF-aligned pathways, and the 50% expansion of district Emergency and Trauma Care Centres, including through NIMHANS-2 and upgraded mental health institutes, is timely. Translating these reforms into outcomes will require strong community mobilisation and grassroots engagement. We look forward to support such initiatives in order to deliver measurable health gains for families and communities," said Dr Rashmi Ardey, Director Programme (Health), Smile Foundation.