Budget 2025: Govt makes bigger allocations for health, education & R&D; agriculture takes center stage

The allocations are significant but not on expected lines for healthcare and biotechnology industry

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The Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman along with the Ministers of State for Finance, at the Parliament House to present the Union Budget 2025, in New Delhi on February 01, 2025.
New Delhi: On February 1, 2025, Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2025-26, unveiling significant initiatives in healthcare, education, and agriculture.
The move, as per Sitharaman, is to promote inclusive development and strengthen the nation’s socio-economic fabric.
While higher allocations are significant, the healthcare and biotechnology industries were expecting a few bigger measures. We will be reporting the reactions in the stories to follow soon.
Healthcare Initiatives
The budget proposed a substantial increase in funding for healthcare infrastructure, medical education, and mental health services, aiming to enhance accessibility and affordability across the country. This includes upgrading district hospitals and improving rural healthcare facilities to bridge the urban-rural divide in medical services. Additionally, the government plans to support the integration of artificial intelligence (AI) in healthcare, particularly in diagnostics, to facilitate early detection of diseases such as cancer.
As relief on import of Drugs/Medicines, 36 lifesaving drugs and medicines for treating cancer, rare diseases and chronic diseases have been fully exempted from Basic Customs Duty (BCD). Further, 37 medicines along with 13 new drugs and medicines under Patient Assistance Programmes have been exempted from Basic Customs Duty (BCD), if supplied free to patients.
The government plans to set up daycare cancer centres in all district hospitals over the next three years, with 200 centres set up in FY 2025-26 alone.
In a step towards filling the gap in availability of human resources in healthcare, 10,000 additional seats will be added to medical colleges across India next year, with the aim to add 75,000 over the next five years.
Agricultural Development
The budget emphasized the importance of the agricultural sector by proposing a 15% increase in spending, amounting to approximately ₹1.75 lakh crore. This marks the largest increase in agricultural funding in six years and is intended to boost rural incomes and curb inflation. Key initiatives include enhanced mechanization, subsidized insurance schemes, and improved irrigation facilities to support farmers. Special programs aimed at assisting small and marginal farmers are also part of the government’s rural development strategy.
A new scheme for agriculture sector—Prime Minister Dhan Dhanya Krishi Yojana (PMDDKY) to implemented in partnership with states, across 100 districts in its first phase. The programme to be launched in partnership with the states, covering 100 districts with low productivity, moderate crop intensity and below-average credit parameters, to benefit 1.7 crore farmers.
The state of Bihar will get a Makhana board, to boost the cultivation and marketing of fox nuts.
The government has also proposed the launch of National mission on High Yielding Seeds and setting up of Second Gene Bank for future food security.
Educational Reforms
In the education sector, the government announced plans to develop additional infrastructure in five Indian Institutes of Technology (IITs) established after 2014, with a specific focus on expanding IIT Patna. This initiative aims to enhance the quality of technical education and foster innovation. Furthermore, the ‘Bharatiya Bhasha Pushtak’ scheme was introduced to provide digital versions of Indian language books for schools and higher education, promoting linguistic diversity and accessibility in learning resources.
The budget also explores a Fund of Funds for start-ups and emphasizes research at IITs and IISc. Rs 20,000 crore for innovation and 10,000 research fellowships in Union Budget 2025 to drive technological advancements and support private-sector-driven initiatives.
Government will set up Fifty thousand Atal Tinkering Labs in Government schools in next 5 years to cultivate the spirit of curiosity and innovation and foster a scientific temper among young minds.