Budget 2025: Healthcare industry calls for bigger allocation, better incentives

Industry leaders expect incentives for digital health adoption and interoperability between private and public healthcare systems

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New Delhi: As the healthcare industry anticipates the upcoming Union Budget 2025, stakeholders are united in their demand for increased investments that address both immediate needs and long-term goals.
A key expectation is enhanced funding for public health infrastructure. Rural health facilities, primary care centers, and urban tertiary hospitals require upgrades to handle rising patient loads and future public health crises. Investments in health surveillance systems and disease monitoring frameworks are also essential to ensure readiness for potential pandemics. Digital health initiatives remain a focal point. Telemedicine platforms, electronic health records (EHRs), and integrated health information systems can revolutionize care delivery. Industry leaders expect incentives for digital health adoption and interoperability between private and public healthcare systems.
The industry is looking for substantial allocations toward research and development (R&D), particularly in biotechnology, genomics, and personalized medicine. Emerging technologies such as artificial intelligence (AI), robotics, and wearable health devices need financial backing to scale their impact.
As per Sachidanand Upadhyay, MD, Lord’s Mark Industries Limited, “The pharmaceutical and healthcare sectors are expected to grow significantly due to rising demand, continued infrastructure development, supporting regulations, improved knowledge of preventative healthcare, and technological improvements. In this regard, it is anticipated that the Union Budget 2025 will establish a favourable framework with measures that promote affordability, increase market accessibility, and stimulate innovation. In addition to boosting economic growth, India’s path towards healthcare delivery self-reliance and its rise as a global pharmaceutical leader would strengthen the country’s place in the global value chain. An increase in the health budget is anticipated in order to expand infrastructure and provide healthcare coverage to more people.”
“A uniform tax structure for the healthcare sector, coupled with support for research, innovation, and export incentives, is essential. With India’s nutraceutical market poised for significant growth, these steps can boost global competitiveness and drive the sector’s overall development. In order to guarantee better healthcare outcomes across the country, the budget should also look at implementing broad-based production-linked incentive (PLI) programs to increase export competitiveness for the pharmaceutical industry,” added Upadhyay.
Sanjay Vyas, President and Managing Director, Parexel India said, “India’s pharmaceutical and clinical trials industry is experiencing rapid growth, positioning itself as a key global player. As discussions around Phase 1 clinical trials intensify, one key area of focus could be expanding government research grants and financial incentives to include private Contract Research Organizations (CROs). Currently, these grants are limited to academic institutions, but extending support to private CROs will encourage their active involvement in early discovery and clinical research. Building upon the foundation laid by previous initiatives, the Union Budget 2025 could prioritize targeted incentives for AI in research and development, which will accelerate innovation in drug discovery, clinical trials, and personalized patient care. Also, continued efforts in the establishment and maintaining a single, unified regulatory authority for biopharmaceuticals to simplify compliance, minimize delays, and enhance the ease of doing business will foster growth and attract greater investment in the sector.”
Listing his expectations, Surajit Chakrabartty, CFO, MedGenome opined, “Over the next 5-7 years, we anticipate genomic testing becoming an integral part of routine healthcare, driving advancements in early disease detection and personalized medicine. To fully unlock the potential of genomics, we hope the budget will allocate substantial funding for research and infrastructure development in genomics, accelerating the adoption of cutting-edge technologies and ensuring affordable and equitable access to diagnostics across all demographics. Strengthening public-private partnerships, offering tax incentives for biotech startups, and cultivating a strong policy framework will allow groundbreaking innovations to scale and reach every corner of the country helping tackle some of India’s most urgent healthcare challenges.”
“To position India as a global leader in personalized healthcare, it is imperative to enhance the infrastructure for precision medicine and foster collaboration across sectors. These initiatives will not only lead to better patient outcomes through timely and targeted interventions, but also establish India as a hub for multi omics led diagnostics, improving the health of millions while driving economic growth,” added Chakrabartty.
Dr Harshit Jain, Founder & Global CEO, Doceree commented: “The emergence of 211 new healthcare startups and the adoption of artificial intelligence and machine learning by 4,000 startups have driven a remarkable 28.03% growth in health-tech investments over the past year. This momentum underscores the need for the upcoming budget to focus on expanding India’s health-tech startup ecosystem through substantial tax relief and targeted incentives to empower practicing and aspiring healthcare entrepreneurs to further amplify the benefits of ongoing government initiatives for healthcare like the Ayushman Bharat Digital Mission.”
“Further, creating a dedicated financial pool for technology-driven solutions should be a priority to accelerate research and development for latest drugs, enabling improved patient outcomes and reduce clinical trials cost. By allocating resources for healthcare data management to boost digital adoption across the sector, the budget can pave the way for delivering more personalized and accessible healthcare to millions of underserved citizens, strengthening India’s position as a global leader in health-tech innovation,” added Dr Jain.
Sharing his comments, Dr Rakesh Gupta, Chairman- Sarvodaya Healthcare said, “The focus must shift toward building a resilient and inclusive healthcare ecosystem. With India’s healthcare industry projected to reach $683 billion by 2025, investments in emerging trends like Remote Patient Monitoring (RPM), AI-powered diagnostics, and digital therapeutics (DTx) are crucial to address the dual challenges of accessibility and affordability. Strengthening rural healthcare infrastructure, supporting digital health initiatives like Ayushman Bharat Digital Mission, and enabling technologies such as blockchain and personalized medicine will be key drivers of progress. This budget has the potential to transform healthcare delivery, fostering a future where cutting-edge solutions improve outcomes for millions while ensuring inclusivity and compassion remain central to patient care.”
Kinjal Shah, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Limited said, “To boost investments in the hospitals sector, tax incentives for private sector investments in modernising medical facilities and developing greenfield hospitals in rural areas is a key requirement. Further, given increasing medical inflation, increased allocation towards and price increases under the PMJAY scheme would also be a welcome move. Being research-intensive, the Pharma sector incurs significant spend on R&D. Investments in novel and specialty drugs are subject to higher risk of failure, leading to risk averseness. Higher tax incentives for R&D spends will incentivize Indian players to spend more, thereby providing impetus to newer research initiatives.”
Vikram Vuppala Founder and CEO, NephroPlus said, “As the government prepares for the 2025 Budget, we hope for a significant increase in funding to expand dialysis services under the PMNDP, addressing the urgent need for dialysis care across the country. Only 15% of patients who require dialysis get access currently. With Lakhs of new patients requiring regular dialysis, increasing dialysis care outlay and thereby increasing access to life sustaining care is crucial. Additionally, to position India as a global leader in healthcare in line with Vishwaguru philosophy, we urge the government to introduce tax incentives for healthcare services exports and provide robust support for R&D in innovative healthcare services. This will not only benefit millions of patients but also boost India’s stature in the global healthcare ecosystem.”
Kishore Karumanchi, CEO, aciana “AI is transforming healthcare with accurate diagnoses and personalized preventive treatments. Raising the exemption limit for health check-ups from ₹5,000 to ₹20,000 would encourage regular screenings and lower the disease burden. Additionally, allocating more funds to research in genomics, biotechnology, and AI diagnostics is vital for innovation. Tax breaks for healthcare startups and stronger public-private partnerships can accelerate the use of advanced technologies in healthcare. These steps will expand access to quality care for millions and position India as a global leader in healthcare innovation. Investing in preventive care and advanced medical tech will improve public health and drive sustainable sector growth”.
Sushant Roy, Co-founder COO, and CBO at Alyve Health said, “As the Union Budget 2025 approaches, it is essential to spotlight the transformative role of comprehensive health plans in promoting proactive healthcare. These plans are reshaping health behavior by encouraging regular check-ups, personalized assessments, and sustainable habit-building activities. To accelerate this shift, we recommend the government focus on strengthening Digital Health Infrastructure, Standardizing Annual Health Assessments, Expanding Access to Underserved Regions, Improving Access to Immediate Expert Consultation and Health Education.”
Dr. PN Arora, CMD, Yashoda Super Speciality Hospitals, Kaushambi, said, “As one of India’s largest sectors, both in terms of revenue and employment, the healthcare sector has witnessed unprecedented growth. Ahead of the forthcoming budget, we expect the government to reduce input GST on healthcare services. Besides, recent reports highlight the significant discrepancy between premiums collected and claims paid by insurance companies underscoring the urgent need for reform in India’s healthcare sector. We expect the government to focus on the concern and take certain measures to bridge this gap. Further, increased funding for public health facilities, along with incentives for private-sector collaboration, can improve access to quality care. A focused approach toward enhancing infrastructure in underserved areas will ensure better healthcare outcomes for all citizens.”
Yogesh Mudras, Managing Director of Informa Markets in India said, “The Indian Pharma sector has traditionally been quite strong. The sector is at the cusp of a huge transformation and is expected to reach US$ 130 billion by 2030 and US$ 450 billion market by 2047. To achieve this, we expect the upcoming budget to take policy measures to solidify India’s position at the global level and boost the sector’s capabilities for Viksit Bharat. The government should also consider expanding the list of life-saving drugs eligible for GST/import duty exemptions which will improve affordability for patients. Further, introducing additional incentives to promote investments in research and development (R&D) and promote domestic manufacturing of pharmaceutical products in India will be beneficial. Additionally, incentivising domestic API manufacturers and expanding PLI schemes will boost local production, aligning with the Make-in-India initiative. As the organisers of CPHI & P-MEC India, we are committed to fostering a thriving ecosystem for the pharmaceutical industry and look forward to policies that drive growth, innovation, and self-reliance in the sector.”
Dr Alok Khullar Group CEO of RJ Corp Healthcare “India’s healthcare system even though evolved is facing increasing costs, uneven access and increasing demands because of a significant ageing population as well a significant increase in lifestyle diseases. We suggest that the government take steps towards treating healthcare like an industry with benefits like those given to the IT sector through Special Economic Zones. In addition, we suggest to reconsider the GST on medicines, room rent & medical devices to reduce cost for patients. Access to preferential capital at lower interest rates, investments by the Govt in training & upskilling of medical & nursing professionals, encouraging manufacturing of medical devices and consumables through “Make in India” will give a much-needed boost to the sector in enhancing levels of care and managing costs. Public Private Partnerships at a larger scale will help deliver better healthcare to tier 3 and tier 4 cities.
Nirav Mehta, Managing Director & CEO, CORONA Remedies said, “The upcoming Union Budget, for the year 2025–26 presents a chance to align priorities with the evolving pharmaceutical landscape in India. We are eager to see how the budget aims to boost the industry through policy adjustments that play a vital role in fostering sustainable growth and ensuring widespread availability of essential medications nationwide. Moreover, it is crucial for the government to prioritize boosting investments in research and development (R&D). With strategies and initiatives in place India has the potential to solidify its position as a hub, for innovative products and environmentally friendly pharmaceutical production.”
“As we anticipate the forthcoming budget, we are hopeful for continued and expanded support for our elderly population. Government initiatives such as the Pradhan Mantri Vaya Vandana Yojana have been pivotal in providing financial security to senior citizens, with the scheme offering an assured return of 8% per annum. However, there is a pressing need for greater investment in healthcare, particularly geriatric care and mental health support, to meet the growing demands of our aging population,” said Saumyajit Roy, Co-Founder & CEO, Emoha.
“With the growing burden of eye diseases in both rural and urban India, there is an urgent need for increased budgetary allocations towards expanding eye care infrastructure, promoting public awareness, and ensuring cost-effective treatment options. A reduction in GST and import duties on critical medical equipment and supplies would notably lower treatment costs, making advanced eye care services more accessible to the wider population. We also encourage policies that support healthcare financing, enabling more people, particularly in underserved areas, to access the care they need. Furthermore, incentivizing skill development in ophthalmology will be vital in addressing the rising demand for specialized eye care professionals.” said Rajat Goel, Co-founder and CEO of Eye-Q Superspeciality Hospitals.