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Union Budget 2025: Healthcare Sector Gets a Boost with Increased Funding, Cancer Care Expansion, and Medical Tourism Push

Written by : Dr. Aishwarya Sarthe

February 1, 2025

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Finance Minister Nirmala Sitharaman, in her Union Budget 2025 speech, unveiled a series of measures to strengthen India’s healthcare infrastructure, expand medical education, and promote medical tourism. The budget builds on last year’s allocation, reflecting a 12.9% increase in funding for the Health Ministry and targeted reforms in critical areas like cancer care, rare diseases, and digital healthcare.

Key Healthcare Announcements

Expanded Access to Life-Saving Medicines

In a major relief for patients suffering from cancer, rare diseases, and other chronic illnesses, the government has exempted 36 life-saving drugs from basic customs duty. “Those suffering from cancer, chronic, or other severe diseases will benefit as I propose adding 36 life-saving drugs and medicines to the list of those fully exempted from basic customs duty,” Sitharaman announced.

Additionally, specified drugs and medicines under patient assistance programs run by pharmaceutical companies will be fully exempt from Basic Customs Duty (BCD), provided these medicines are supplied free of cost to patients. However, six life-saving medicines have been added to the custom duty list, now attracting a 5% tax. Furthermore, 37 more medicines and 13 new patient assistance programs have been added to expand access to essential treatments.

Strengthening Cancer Care Infrastructure

The government will set up 200 cancer daycare centers nationwide to ensure better treatment access. These centers will be located within existing cancer hospitals and focus on daycare chemotherapy services, reducing the burden on tertiary hospitals.

Medical Education Expansion

Recognizing the shortage of healthcare professionals, the budget includes provisions to increase medical education capacity. Over the past three years, the government has added 1.1 lakh UG and PG medical education seats, with an additional 10,000 seats set to be added next year. The long-term goal is to reach 75,000 new medical seats within five years, ensuring a steady supply of trained professionals.

Boosting Medical Tourism and ‘Heal in India’ Initiative

The budget also focuses on positioning India as a global medical tourism hub. Under the ‘Heal in India’ initiative, the government will partner with private sector stakeholders, improve capacity building, and streamline visa norms to attract international patients. “Medical tourism in India will be promoted in partnership with the private sector,” Sitharaman said.

Digital and AI-Driven Healthcare Reforms

Artificial intelligence (AI) is set to play a key role in healthcare transformation, with the government allocating ₹500 crore for a Centre of Excellence in AI for Education. The focus on AI-driven healthcare solutions is expected to improve diagnostics, personalized treatment, and predictive healthcare models.

Healthcare Access for Gig Workers

The budget extends healthcare coverage under the PM Jan Arogya Yojana to gig workers, ensuring social security for those in informal employment. This move aims to provide financial protection against medical expenses to millions of workers outside traditional employment structures.

Increased Health Ministry Budget Allocation

The Health Ministry has been allocated ₹90,958.63 crore for 2025-26, a 12.9% increase over last year’s budget. Of this, ₹87,656.90 crore is allocated to the Department of Health and Family Welfare, while ₹3,301.73 crore goes to the Department of Health Research. The AYUSH Ministry’s budget has also seen a significant hike of 23.74%, reaching ₹3,712.49 crore.

Conclusion

The Union Budget 2025 reflects the government’s commitment to healthcare accessibility and resilience. With a focus on expanding cancer care, improving medical education, boosting medical tourism, and leveraging AI for healthcare advancements, the budget aims to address existing gaps while preparing India’s healthcare sector for future challenges.


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