Budget 2025 Expectations: Healthcare industry leaders demand strategic reforms, standardised practices and advanced medical education – Healthcare News

Budget 2025: Ahead of Union Budget 2025, industry leaders from healthcare sector are demanding various critical measures for the growth of the sector. Abhay Soi, President, NATHEALTH and Chairman & Managing Director, Max Healthcare Institute Limited maintains that the upcoming Union Budget offers an unprecedented chance to address systemic gaps.

Some of the gaps include acute shortage of medical specialists, escalating cancer care costs, and inadequate hospital infrastructure to meet the demands of a growing population.

“By implementing strategic reforms, we can pave the way for a robust, equitable, and innovative healthcare system. Expanding hospital capacity, viable reimbursement frameworks, reducing treatment costs, and advancing medical education will not only address current challenges but also secure India’s position as a global healthcare leader. These efforts will ensure a healthier and more sustainable future for all,” Soi said.

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Recently, NATHEALTH also included recommendation call for a significant increase in healthcare budget allocation to over 2.5 percent of GDP, with a focus on the following key areas:

• Reducing Cancer Care Costs: Remove customs duties and reduce GST to 5% on oncology radiation equipment, such as LINACs, to expand cancer treatment capacity in underserved regions
• Redirecting Public Health Revenues: Allocate proceeds from healthcare CESS and the proposed 35% GST slab on tobacco and sugar products to strengthen public health programmes. Advocate for a unified 5% GST on all healthcare goods and services to reduce input costs
• Encouraging Vertical Expansion of Hospitals: Permit hospital heights up to 60 metres nationwide (from the current limit of 45 metres), supported by funding for fire safety upgrades to ensure compliance in high-rise healthcare facilities
• Strengthening Health Infrastructure: Add 2.5–3.0 million hospital beds nationwide through Viability Gap Funding (VGF) and long-term, low-interest capital investments, fostering participation from mid-sized and smaller healthcare providers
• Viable Insurance Reimbursement Rates: Index reimbursement rates under schemes such as CGHS, PMJAY, and ECHS to the Consumer Price Index (CPI) to ensure financial viability, given that many rates have remained unchanged for nearly a decade
• Expanding Medical Education: Increase MBBS and postgraduate medical seats through government-led investment, supported by alternative financing mechanisms such as loans and interest subventions. Increase tuition fees for private DNB programmes by 75%-100% to fund capacity expansion
• Advancing Digital Health: Launch a 10-year digital health incentive plan to enable the adoption of Ayushman Bharat Digital Mission (ABDM) infrastructure, enhance data security, implement electronic health record (EHR) systems, and upskill technical resources. Foster collaboration between industry, academia, and start-ups to drive digital innovation
• Promoting India as a Healthcare Hub: Establish a dedicated fund to position India as a leader in high-quality healthcare and medical tourism, with targeted investments in critical and holistic health services
• Funding R&D in the Med-tech sector: Announce a fund to support R&D and reward Med-tech innovation in India (including GCC’s) while transitioning to quality linked standardised procurements norms towards value-based care

What’s in store for diagnostics sector?

Ameera Shah, Promoter and Executive Chairperson, Metropolis Healthcare Ltd. maintained that the diagnostics sector plays a pivotal role in the healthcare ecosystem, enabling timely detection and precise treatment planning.

“The forthcoming budget presents an opportunity to strengthen this critical segment further. To enhance the quality and credibility of diagnostic services nationwide, we urge the government to implement a robust policy framework that standardises practices and mandates NABL accreditation for every laboratory operating in India. We strongly advocate for the introduction of 0% GST on diagnostic services and refunds for GST paid on inputs. Additionally, increasing incentives for research and development in diagnostic technology will foster innovation and position India as a global leader in healthcare advancements,” Shah said.

Other key measures include raising the tax exemption for preventive health check-ups from the current ₹5,000 to ₹10,000, extending this benefit to multiple family members, and incorporating reimbursements for outpatient diagnostic services within insurance packages, she said. Simplifying regulatory processes and introducing a single-window clearance system will also improve the sector’s business environment, she added.

“As the diagnostics industry continues to expand globally, these measures are essential for driving growth and positioning India as a global leader in healthcare advancements. We remain committed to collaborating with the government to achieve these shared objectives and unlock the full potential of the diagnostics sector,” she highlighted.

What’s in store for MedTech sector?

India’s med-tech sector is poised to redefine global healthcare innovation, driven by supportive policies and industry ambition, Himanshu Baid, Managing Director, Poly Medicure Ltd. revealed.

“The upcoming budget provides a vital opportunity to further strengthen this sector through critical reforms. The government can consider standardising the GST rate of 12% across all medical devices as it would simplify the tax structure, ensuring consistency and ease of doing business. Enhancing export incentives under RoDTEP to 2-2.5%—from the current range of 0.6-0.9%—will bolster the global competitiveness of Indian-made medical devices, enabling manufacturers to expand their reach in international markets,” Baid said.

He also revealed that the need to implement a policy that curtails the reuse of single-use medical devices, ensuring patient safety, minimizing healthcare-associated risks, and maintaining high-quality standards across the industry is equally important.

“Additionally, extending the Production Linked Incentive (PLI) scheme by 2-3 years would support local manufacturers in scaling production, reducing import dependence, and achieving long-term growth and sustainability. An increase in the healthcare budget allocation to 2.5-3% of GDP is crucial for strengthening healthcare infrastructure, which will benefit both innovation and access to care across the country. These measures, together, will reinforce India’s med-tech ecosystem, positioning it as a hub for innovation and a trusted partner in global healthcare. We remain committed to collaborating with the government to achieve these shared objectives and unlock the full potential of this dynamic industry,” he said.

What’s in store for pharma sector?

Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance maintained that the Indian pharmaceutical industry is at a pivotal moment, and poised for growth, targeting $120–130 billion by 2030 and $450 billion by 2047.

“This will position India among the top 5 innovators and No 1 in volume. To achieve this, the Union Budget 2025-2026 should prioritize innovation, ease of doing business, and policies that strengthen the Life Sciences Ecosystem. It would be encouraging if the Union Budget allocates at least 10% of the National Research Fund to life sciences, reinstates 200% weighted deductions for R&D expenditure, and expands the patent box regime to include income from patents abroad. Additionally, removing Section 194R related to marketing samples would ease business operations. Further, incentives for AI research in the pharmaceutical sector should be introduced, building on AI Centers of Excellence and medical device training from Budget 2023,” Jain revealed.

These measures in the Union Budget would enhance India’s competitiveness in life sciences and solidify its global leadership in healthcare innovation. By creating a business-friendly, innovation-driven ecosystem, India can achieve its goals, ensuring health, prosperity for all, and fulfilling the Viksit Bharat vision, he added.