Health is one of the biggest priorities of every country. The progress of the country is not possible without a strong and healthy society. In the last few years, many schemes have been started in India to improve the condition of health services and hospitals, but the real picture of the government budget says something else. The Government of India had implemented a special cess (tax) for health and education in 2018. It was introduced to increase health expenditure and meet the health needs of the people of the country, especially BPL (poor) and rural families. The general feeling was that this cess would increase expenditure in the health sector and support the existing health budget of the government. But the figures and budget details show that the reality is quite the opposite.

Health expenditure reduced while cess is being collected

The total budget expenditure of the government for the health sector is now less than before. In 2017-18, expenditure on health and family welfare was 2.4 per cent of total government expenditure. But in the budget estimate of 2026-27, it has come down to only 1.9 percent. If we look at it in proportion to GDP, it has fallen from 0.28 percent to 0.26 percent. The thing to note is that the money collected from health cess in 2026-27,

That is about 30 percent of the total expenditure of the health budget, that is, if this cess is removed, then the expenditure on health will be only 1.3 percent of the total budget, which is not even half as compared to 2017-18. This means that the cess is only pretending to increase expenditure, but in reality the expenditure on health is decreasing. If there was no cess, the health sector budget would have been only 0.18 percent of GDP.

What do the budget figures tell?
The data clearly shows that the Indian government’s actual expenditure on health has been continuously declining, even though the budget shows a slight increase due to the cess. The share of health in the total government expenditure was 2.4 percent in 2017-18, which has come down to 1.9 percent in 2026-27. If we exclude cess, this share is even less, only 1.3 percent. The same decline is visible in the ratio of GDP. It has reduced from 0.28 percent to 0.26 percent, and after removing the cess it becomes only 0.18 percent. This means that despite the cess, the actual budget received by the health sector is continuously decreasing and is far behind the goals of the National Health Policy.
National Health Policy Objective

According to the National Health Policy, expenditure on health was to be 2.5 percent of GDP by 2025. The share of the central government in this should have been about 0.9 percent of GDP. But currently the expenditure on health is only 0.26 percent of the GDP, i.e. almost three times less than the target. If 2.4 percent of the total budget was spent on health like in 2017, then the budget without cess in 2026-27 should have been around Rs 1.2 lakh crore. But the actual expenditure including cess is only Rs 1 lakh crore.

The real purpose and shortcomings of cess

Experts say that health and education cess only creates the illusion of increasing expenditure. The cess money goes into a reserve fund outside the main budget and there is no transparency or outcome measurement on it. The cess collected for health in 2018-19 and 2019-20 went to general revenue. About Rs 20,600 crore which was collected for health, was not put to much use.

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Disclaimer: This information is based on research studies and expert opinion. Do not consider this as a substitute for medical advice. Before adopting any new activity or exercise, please consult your doctor or relevant specialist.

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Health Budget 2026: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026-27 today. This is his ninth consecutive budget and only the second time in history that the budget is being presented on a Sunday. In all sectors, there has been a lot of focus on the health sector. Let us know what the health sector will get in this budget.

India will become biopharma hub

This year, a lot of emphasis is being laid on the health sector. Because there is a big vision behind it, to make India a global biopharma hub. The biggest announcement for the health sector is the launch of the Biopharma Shakti initiative. This has been supported with an allocation of ₹10,000 crore over the next 5 years. It aims to create a strong domestic ecosystem for biologics and biosimilars, reduce import dependence and also establish India as a global supplier of medicines.

Affordable medicines for diabetes and cancer

A major outcome of the emphasis on biopharma will also be low-cost drugs for diabetes and cancer. These are two of India’s fastest growing health challenges. By encouraging domestic production of biologic drugs, the government aims to reduce manufacturing costs. This will directly reduce prices for patients and also reduce pressure on public health expenditure.

Along with this, to support this ecosystem, the budget also proposes to establish three new National Pharmaceutical Education and Research Institutes as well as upgrade seven existing institutes. This institute will focus on advanced pharmaceutical education, research and innovation.

Network of Clinical Trial Sites

Another big step is to create a network of 1000 accredited clinical trial sites across India. This will significantly increase India’s strength for drug testing, clinical research and faster approval of new therapies. Not only this but district hospitals will also be updated. Emergency wards will be increased there so that people can benefit.

Regional medical hub will be constructed

Along with this, it has been announced in the budget that five regional medical hubs will be constructed. Here, along with medical and training, work will be done on research. Not only this, it has also been announced to create three new All India Institutes of Medical Sciences in the country. Along with this, keeping mental health in mind, Finance Minister Nirmala Sitharaman has said that the Mental Institute will also be strengthened.

Three new Ayurveda institutes in the country

Let us tell you that the existing institutions for allied health professionals will be upgraded. Along with this, AHPI institutes will be established in both the sectors. Besides, three new Ayurveda institutes will be built in the country.

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Union Budget 2026: The health sector has great expectations from the upcoming Union Budget, as it plays an important role in deciding the direction and quality of health services in the country. Experts believe that if the government increases the health budget significantly, it will strengthen primary health services and improve the availability of infrastructure, modern equipment and medicines in government hospitals. Incentive schemes are expected to be introduced to overcome the shortage of doctors and trained health workers, especially in rural and remote areas, so that access to health services can be increased equally.

What are the expectations of the health sector?

Expansion of health insurance coverage, preventive care, investment in digital health and medical research are also likely to be included among the major priorities of this budget. Dr. N.K. According to Soni, greater allocation for healthcare infrastructure, technology and preventive services will improve treatment outcomes for patients, especially in Tier-II and Tier-III cities. Better access to digital health and insurance facilities will not only make treatment cheaper but will also reduce the financial burden on patients, thereby creating a strong and sustainable healthcare ecosystem.

There is also a widespread expectation that special attention will be paid to women and child health. Mansi Bansal Jhunjhunwala says that increased expenditure on maternal health, nutrition, timely check-up and newborn care will improve the health level of the society in the long run. Along with this, investment in telemedicine, digital platforms and modern medical technology will make it easier for patients to access better diagnosis and quality treatment.

Need to focus on women’s health

Regarding women’s health, experts also believe that focus on preventive and specialized care is the need of the hour. According to Dr. Sandeep Sonara, increasing access to facilities such as timely diagnosis, advanced imaging technology and minimally invasive surgery in both urban and rural areas will lead to better outcomes in complex diseases like endometriosis and will also reduce the social and economic burden in the long run.

Overall, the upcoming Union Budget is expected to bring strong structural reforms, technological innovations and inclusive policies in the health sector. If the government strengthens primary, preventive and specialized healthcare services in a balanced manner, it will vastly improve the accessibility, quality and affordability of healthcare services and India will be able to rapidly move towards a future-ready and equitable healthcare system.

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Union Budget 2026-27: Union Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2026-27 on 1 February. This time, there will be many important challenges before him in the budget, in which expansion of medical infrastructure and providing treatment to the common people at concessional rates can be the main issues. Government expenditure on health is still very low in most developing countries, including India, compared to developed countries, even though better health services are the foundation of any strong economy.

It is clear from the World Bank’s 2022 report that there is a big difference between countries in terms of expenditure on health. America spends about 17 to 18 percent of its GDP on health services, which comes to about 12 to 13 thousand dollars per person. However, the public health system there is weak and dependence on the private sector is high. Japan spends 10 to 11 percent of its GDP on the medical sector, where per capita spending ranges from $4,500 to $5,000 and public health services are considered very strong.

How much is spent on medical treatment in which country in the world?

Russia spends about 5 to 6 percent of its GDP on health, with per capita spending between $800 and $1,000, but there is inequality in the quality of services. China has rapidly increased investment in health infrastructure in the last decade and spends 6 to 7 percent of GDP on the medical sector, bringing per capita spending to $700 to $900.

In comparison, India spends only 3 to 4 percent of GDP on health and the per capita expenditure is only between 100 to 200 dollars. However, efforts are being made to gradually improve the situation through schemes like Ayushman Bharat.

Country	GDP expenditure on health (%)	Per Capita Health Expenditures (USD)
America	16.8%	12,000
Japan	11	4,150
Russia	5.3	1,474
China	5.0	731
India	3.6	209

How was India’s last medical budget?

Talking about previous budgets, the government has increased focus on digital health, medical infrastructure, domestic production and affordable medicines. In the budget for the financial year 2025-26, about Rs 1 lakh crore was allocated for the Health Ministry, which was about 11 percent more than the previous year. In this, expansion of Ayushman Bharat, exemption in custom duty on cancer medicines, establishment of new medical colleges and additional funds for institutions like National Health Mission and AIIMS were announced.

When and how much is spent on the budget in India?

Year	Health Budget (Rs crore)
2022-23	86,606
2023-24	88,956
2024-25	90 thousand crores
2025-26	99,858.56

What do experts say

Regarding the Medical Budget 2026-27, experts believe that the share of GDP on health should be further increased. According to Dr. Sharad Aggarwal, former president of the Indian Medical Association (IMA), health expenditure should be clearly shown under different heads in the budget, so that it can be known how much is being spent on infrastructure development and how much is going on salaries and other administrative items. He says that it is very important to pay special attention to infrastructure development.

Dr. Aggarwal also suggested that medicines, medical equipment and surgical products should be taken out of the purview of GST, so that the cost of treatment can be reduced. Along with this, relief should also be given in the customs duty imposed on medical equipment. He said that just as tax exemption is given on life insurance, similarly health insurance should also be promoted by giving additional tax exemption.

He believes that after Covid-19, there has been improvement in the medical infrastructure in the country, but a lot of work still remains to be done in remote areas. There is a need to focus on the quality and availability of ambulance services, oxygen plants, solar panels, generators, operation theatres, ventilators and other essential equipment. Many ventilators installed during the Covid period are lying defective today because their quality was not good. Therefore, it is important that there is strict monitoring of expenditure under the health budget and an independent, impartial body can check its implementation and quality.

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Union Budget 2026-27: Union Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2026-27 on 1 February. This time, there will be many important challenges before him in the budget, in which expansion of medical infrastructure and providing treatment to the common people at concessional rates can be the main issues. Government expenditure on health is still very low in most developing countries, including India, compared to developed countries, even though better health services are the foundation of any strong economy.

It is clear from the World Bank’s 2022 report that there is a big difference between countries in terms of expenditure on health. America spends about 17 to 18 percent of its GDP on health services, which comes to about 12 to 13 thousand dollars per person. However, the public health system there is weak and dependence on the private sector is high. Japan spends 10 to 11 percent of its GDP on the medical sector, where per capita spending ranges from $4,500 to $5,000 and public health services are considered very strong.

How much is spent on medical treatment in which country in the world?

Russia spends about 5 to 6 percent of its GDP on health, with per capita spending between $800 and $1,000, but there is inequality in the quality of services. China has rapidly increased investment in health infrastructure in the last decade and spends 6 to 7 percent of GDP on the medical sector, bringing per capita spending to $700 to $900.

In comparison, India spends only 3 to 4 percent of GDP on health and the per capita expenditure is only between 100 to 200 dollars. However, efforts are being made to gradually improve the situation through schemes like Ayushman Bharat.

Country	GDP expenditure on health (%)	Per Capita Health Expenditures (USD)
America	16.8%	12,000
Japan	11	4,150
Russia	5.3	1,474
China	5.0	731
India	3.6	209

How was India’s last medical budget?

Talking about previous budgets, the government has increased focus on digital health, medical infrastructure, domestic production and affordable medicines. In the budget for the financial year 2025-26, about Rs 1 lakh crore was allocated for the Health Ministry, which was about 11 percent more than the previous year. In this, expansion of Ayushman Bharat, exemption in custom duty on cancer medicines, establishment of new medical colleges and additional funds for institutions like National Health Mission and AIIMS were announced.

When and how much is spent on the budget in India?

Year	Health Budget (Rs crore)
2022-23	86,606
2023-24	88,956
2024-25	90 thousand crores
2025-26	99,858.56

What do experts say

Regarding the Medical Budget 2026-27, experts believe that the share of GDP on health should be further increased. According to Dr. Sharad Aggarwal, former president of the Indian Medical Association (IMA), health expenditure should be clearly shown under different heads in the budget, so that it can be known how much is being spent on infrastructure development and how much is going on salaries and other administrative items. He says that it is very important to pay special attention to infrastructure development.

Dr. Aggarwal also suggested that medicines, medical equipment and surgical products should be taken out of the purview of GST, so that the cost of treatment can be reduced. Along with this, relief should also be given in the customs duty imposed on medical equipment. He said that just as tax exemption is given on life insurance, similarly health insurance should also be promoted by giving additional tax exemption.

He believes that after Covid-19, there has been improvement in the medical infrastructure in the country, but a lot of work still remains to be done in remote areas. There is a need to focus on the quality and availability of ambulance services, oxygen plants, solar panels, generators, operation theatres, ventilators and other essential equipment. Many ventilators installed during the Covid period are lying defective today because their quality was not good. Therefore, it is important that there is strict monitoring of expenditure under the health budget and an independent, impartial body can check its implementation and quality.

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The Union Budget 2026-27 coming on 1 February 2026 can be a turning point for the healthcare and pharma sector. The industry is not expecting any big-bang announcement, but this budget will decide whether India will remain only a hub of cheap medicines or will become a global innovation leader. Currently public healthcare spending is only 1.9% of GDP, whereas the target was 2.5%. Pharma sector wants R&D push, return of 200% tax deduction and simple GST structure. Infrastructure, hospital beds and rural workforce gap are also big concerns. In simple words, Budget 2026 will not just calculate the expenditure but will decide the roadmap for India’s healthcare future.