Context & The Gist
The article discusses the healthcare allocations in India’s Budget 2026. It’s in the news because of the ongoing debate about whether India is investing enough in healthcare, particularly in light of the National Health Policy 2017’s target of allocating 2.5% of GDP to the sector. The budget shows a 10% increase in overall allocation, but the percentage of GDP remains low at 0.26%, falling short of the 2017 policy goal.
The central argument is that while there are positive developments like the Biopharma SHAKTI scheme and focus on allied health professionals, the overall budgetary commitment to healthcare remains insufficient, potentially hindering long-term improvements in the sector.
Key Arguments & Nuances
- Increased Allocation, Limited Impact: The 10% increase in allocation (₹1.05 lakh crore) is positive, but its impact is diluted by the low percentage of GDP it represents.
- Biopharma Focus: The ₹10,000 crore Biopharma SHAKTI scheme aims to boost domestic manufacturing of biologics and biosimilars, addressing a long-standing gap in India’s R&D capabilities.
- Allied Health & Elderly Care: Training one lakh allied health professionals and 1.5 lakh care workers acknowledges India’s demographic shift towards an aging population.
- Affordability Measures: Exempting cancer medicines and treatments for rare diseases from customs duties improves access to essential care.
- NHM Funding Concerns: Despite consistent utilization of funds, the National Health Mission (NHM) has seen a reduction in budgetary support, raising concerns about patchy outcomes.
- Centre-State Dynamics: While fiscal devolution allows states to invest more, the Centre’s reduced share could lead to uneven healthcare development across the country.
UPSC Syllabus Relevance
- GS Paper II: Governance – Issues relating to development and management of Social Sector/Services including Health, Education, and Human Resources.
- GS Paper III: Economy – Government Budgeting, Inclusive Growth, and related issues.
- GS Paper III: Science and Technology – Developments in the pharmaceutical and biotechnology sectors.
Prelims Data Bank
- National Health Policy 2017: Aims to achieve a health expenditure of 2.5% of GDP by 2025.
- Biopharma SHAKTI Scheme: ₹10,000 crore initiative to promote domestic manufacturing of biologics and biosimilars.
- NIPER: National Institutes of Pharmaceutical Education and Research. Three new institutes to be established, seven existing to be modernized.
- NIMHANS: National Institute of Mental Health and Neurosciences. A second campus to be established in North India.
- Tax Collected at Source (TCS): Reduced from 5% to 2% on medical and educational remittances.
Mains Critical Analysis
The Budget 2026 presents a mixed picture for healthcare. While targeted investments in areas like biopharmaceuticals and allied health are commendable, the overall allocation remains significantly below the National Health Policy’s target. This raises concerns about the long-term sustainability and effectiveness of India’s healthcare system.
Challenges
- Insufficient Funding: The low percentage of GDP allocated to healthcare (0.26%) is a major constraint. This limits the capacity to expand infrastructure, improve access, and address emerging health challenges.
- Centre-State Coordination: The Centre’s reduced share in healthcare funding could exacerbate regional disparities and hinder the implementation of national health programs.
- Research & Development Gap: While the Biopharma SHAKTI scheme addresses R&D, sustained investment and a supportive ecosystem are crucial for long-term innovation.
- Affordability & Access: Despite measures to reduce costs for certain treatments, affordability remains a significant barrier for many Indians, particularly those with chronic diseases.
Opportunities
- Demographic Dividend: The focus on training allied health professionals and care workers aligns with India’s aging population and creates employment opportunities.
- Manufacturing Hub: The Biopharma SHAKTI scheme has the potential to transform India into a global manufacturing hub for biologics and biosimilars, boosting economic growth and improving access to affordable medicines.
- Digital Health: The budget could have leveraged the potential of digital health technologies to improve access, efficiency, and quality of care.
Value Addition
- National Health Policy 2017: Emphasizes universal access to healthcare, strengthening primary healthcare, and promoting preventive care.
- Ayushman Bharat (Pradhan Mantri Jan Arogya Yojana - PMJAY): A flagship scheme providing health insurance coverage to vulnerable populations.
- SC Judgement on Right to Health: While not explicitly a fundamental right, the Supreme Court has recognized the right to health as an integral part of the right to life under Article 21.
Context & Linkages
Credible and creditable: On Union Budget 2026-27
This article provides a broader overview of the Union Budget 2026-27, highlighting its focus on fiscal prudence and sectoral growth. It corroborates the current article’s point about the budget prioritizing targeted investments in manufacturing (like biopharma) while maintaining a cautious approach to overall spending. Both articles emphasize the budget’s attempt to balance economic stability with growth objectives.
Budget moves forward with future as focus but ducks key reforms
This article echoes the concerns raised in the current editorial regarding the budget’s failure to address fundamental issues like subsidy rationalization and disinvestment. It suggests that the government often postpones difficult reforms, which could hinder long-term economic growth and development, including in the healthcare sector.
Unenviable choice: On the government’s fiscal policy space
This article provides context on the government’s constrained fiscal space, explaining the factors limiting its ability to increase spending. This helps understand why the healthcare allocation, despite a 10% increase, remains a small percentage of GDP. The article highlights the trade-offs the government faces between growth-enhancing expenditure and fiscal consolidation.
The Way Forward
- Increase Healthcare Spending: Prioritize increasing healthcare expenditure to at least 2.5% of GDP, as recommended by the National Health Policy 2017.
- Strengthen Primary Healthcare: Invest in strengthening primary healthcare infrastructure and workforce to improve access to essential services.
- Promote Public-Private Partnerships: Encourage public-private partnerships to leverage private sector expertise and resources in healthcare delivery.
- Enhance Research & Development: Provide sustained funding and support for research and development in the pharmaceutical and biotechnology sectors.
- Address Regional Disparities: Implement targeted interventions to address regional disparities in healthcare access and outcomes.
- Leverage Digital Health: Utilize digital health technologies to improve efficiency, access, and quality of care.