New Delhi: As India gears up for the Union Budget 2025, industry leaders from the healthcare sector have put forth their expectations, emphasising the need for increased spending, policy reforms, and incentives to bridge accessibility gaps and foster innovation.
With the healthcare sector facing critical challenges like non-communicable diseases (NCDs), aging demographics, and regional disparities, the upcoming budget holds promise for transformative changes. Here’s what key industry leaders expect from the upcoming budget:
Dr. Suneeta Reddy, Managing Director, Apollo Hospitals:
The Union Budget 2025 must build on last year’s momentum to address the growing incidence of NCDs. Budget 2024 emphasized cancer treatment with reduced customs duties on essential medicines.
This initiative should be extended to include targeted therapy drugs, as well as advanced cancer treatment equipment like radiotherapy machines and robotics, most of which have around 37 per cent customs duties and are primarily technologies offered by global medtech companies. Rationalizing the duty structure on these will help lower cancer treatment costs in the country.
While input costs for hospitals suffer full GST, healthcare services delivered by hospitals are covered in the GST negative list, resulting in input cost escalation of almost 8-10 per cent. The government should consider lowering the input GST applicable for hospitals to 5per cent for key input services like lease rentals and allied charges, housekeeping, security and maintenance, transportation, and manpower services, similar to the prevailing benefits in the education sector.
Further, given the huge supply constraints on the number of beds that India needs to support its population, an Infrastructure Linked Incentive similar to PLI should be considered, wherein the government can offer an incentive of 50per cent on the cost of Capex incurred for infrastructure creation of any new hospital over 100 beds, as an additional investment allowance to be set off against the company’s tax payable. This can significantly facilitate faster capacity creation in the industry, which will benefit patients and the population at large.
Dr. B. S. Ajaikumar, Executive Chairman, Healthcare Global Enterprises Limited:
Hopefully, Budget 2025 will announce concrete measures to address the glaring disparity in health, wealth, and education.The long-pending need for universal healthcare should be conclusively met, either by imposing a healthcare cess or through an endowment fund, whereby the investment income of the fund can be utilized for public health spending.
Further, better reimbursement models and smart incentivization of efficient private hospitals are imperative to bridge the urban-rural divide and make healthcare accessible and affordable to all. In education, there is an urgent need to introduce a voucher system that can help children in rural areas pursue high-quality education to improve their employability and entrepreneurial ability post-graduation. On the wealth front, the need of the hour is to channel tax collections for purposeful redistribution of wealth to deserving people in deprived regions via potent options like direct cash transfer.
Dr. Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare Ltd:
As we approach the Union Budget of 2025, it is imperative that we prioritize strategic initiatives that enhance the accessibility and sustainability of India’s healthcare sector. Increasing public healthcare spending to at least 2.5 per cent of GDP is crucial for strengthening our infrastructure and ensuring universal coverage. Furthermore, enhancing the Section 80D limit on health insurance premiums will encourage broader participation in health insurance schemes, expanding coverage for all citizens.
We also urge the government to reduce customs duties on essential medical equipment and consumables to lower healthcare costs significantly. Providing IT rebates and tax holidays will allow healthcare providers to reinvest in critical infrastructure and technology, ultimately improving patient care. Additionally, establishing fair reimbursement rates under government schemes is vital for maintaining the financial viability of our institutions.
Gautam Khanna, CEO, P.D. Hinduja Hospital & Medical Research Centre, Mumbai:
As the government sets its eyes on the next budget, we look forward to the possibility of an increased allocation to the tune of 2.5-3 per cent for the healthcare sector.This would help in addressing the country’s growing healthcare needs and improve access to quality care. It will boost infrastructure development, especially in Tier 2 and 3 cities, strengthen primary care through expanded Public Health Centres, encourage public-private partnerships, and support medical education expansion to address shortages of medical professionals and nurses.
The budget should also address the acute shortage of healthcare professionals through increased funding for medical education infrastructure and skill development programs.
Long-term Infrastructure like financing options at lower rates and higher payment periods along with tax breaks will help expansion and give access to the Indian population. Long-term infrastructure like financing options at lower rates and longer repayment periods, along with tax breaks, is critical for healthcare expansion and accessibility in India.
Affordable credit reduces financial strain on providers, enabling investments in facilities, equipment, and training. Current loan tenures of 7-8 years are insufficient, as hospitals require significant capital for land, infrastructure, operations, and human resources, with years needed to achieve breakeven. Long-term credit (15-20 years) with lower interest rates and reduced collateral requirements is essential to address bottlenecks, revive stalled projects, and reduce NPAs in the sector.
Ameera Shah, Promoter and Executive Chairperson, Metropolis Healthcare Ltd:
To enhance the quality and credibility of diagnostic services nationwide, we urge the government to implement a robust policy framework that standardizes practices and mandates NABL accreditation for every laboratory operating in India.
We strongly advocate for the introduction of 0per cent 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.
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. Simplifying regulatory processes and introducing a single-window clearance system will also improve the sector’s business environment.
Dr. Anand K., MD & CEO, Agilus Diagnostics Ltd:
Government healthcare expenditure as a percentage of GDP in India is lower than that of other countries. However, the upward trajectory—with projections of reaching 3.2 per cent of GDP by FY33—is encouraging. We hope this year’s budget allocates a substantial increase in healthcare spending to address these gaps and further drive accessibility and affordability.
India is undergoing demographic shifts, with the share of individuals aged 60 and above expected to reach approximately 13per cent by CY31. Simultaneously, non-communicable diseases are projected to account for ~74per cent of deaths by CY30. These trends emphasize the urgent need for robust policies that focus on preventive healthcare and large-scale population studies. Such measures could mitigate the significant economic losses caused by NCDs and improve overall health outcomes.
Currently, Tier 1 and Tier 2 cities house about 67 per cent of India’s pathology network, leaving Tier 3 cities and rural areas underserved. This disparity often leads to delayed diagnoses and treatments in less urbanized regions. We urge the government to prioritize funding for large-scale public-private partnership (PPP) projects, enabling advanced diagnostic services to reach underserved rural populations. Such initiatives could significantly transform healthcare delivery in these regions and address the stark accessibility gap.
Himanshu Baid, Managing Director, Poly Medicure Ltd:
The government can consider standardizing the GST rate of 12per cent across all medical devices, simplifying the tax structure, ensuring consistency and ease of doing business. Enhancing export incentives under RoDTEP to 2-2.5 per cent —from the current range of 0.6-0.9per cent—will bolster the global competitiveness of Indian-made medical devices, enabling manufacturers to expand their reach in international markets.
Equally important is 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. 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 2.5-3per cent of GDP is crucial for strengthening healthcare infrastructure, which will benefit both innovation and access to care across the country.
The healthcare sector’s wishlist for Union Budget 2025 reflects a clear demand for increased public spending, tax reforms, and incentives for innovation. Experts believe that with these measures, India can address existing gaps, reduce disparities, and solidify its position as a global healthcare leader.
