Reference Article: Editorial | The Hindu – More, and less: On Budget 2026 and health-care spending
UPSC Relevance:
GS Paper II – Social Justice (Public health, role of the State)
GS Paper III – Indian Economy (Human capital, health expenditure, Budget priorities)
Budget 2026 increases health-care allocation to over ₹1.05 lakh crore, about 10% higher than last year’s revised estimates. Despite this rise, health spending remains modest at around 1.9% of total government expenditure and barely 0.26% of GDP. This falls far short of expectations that the Budget would mark a decisive shift towards higher public health investment.
Focus on Research, Manufacturing and Infrastructure
- Biopharma SHAKTI Scheme: ₹10,000 crore over five years to position India as a global hub for biologics and biosimilars
- Creation of a nationwide clinical trial ecosystem with 1,000 accredited trial sites, addressing long-standing R&D gaps
- Establishment of three new NIPERs and modernisation of seven existing ones
- Setting up a second NIMHANS campus in north India and upgrading two national mental health institutes
Human Resources for Health
- Training of one lakh allied health professionals over five years
- Training of 1.5 lakh care workers for elderly care, a timely intervention as India moves towards an ageing population
Measures to Improve Affordability
- Exemption of 17 cancer medicines and select rare-disease treatments from customs and import duties
- Reduction of tax collected at source on medical and educational remittances from 5% to 2%, easing the financial burden on patients and families
Persistent Gaps and Criticism
- Failure to move towards the National Health Policy (2017) target of public health expenditure at 2.5% of GDP by 2025
- Reduction in allocations to the National Health Mission despite strong utilisation and proven impact
- Over-reliance on States to fill funding gaps through fiscal devolution, raising concerns of uneven health outcomes across regions
Assessment
Budget 2026 strengthens health-related manufacturing, research capacity and workforce planning, but remains fiscally cautious on core public health spending. The Centre’s reluctance to significantly raise health expenditure risks perpetuating regional disparities and limiting systemic improvements in health outcomes.
Sample UPSC Mains Question
Budget 2026 prioritises health research and manufacturing but falls short on public health expenditure. Critically examine the implications of this approach for equitable health outcomes in India.