India plans to increase public health spending by over 10% in FY2025/26, focusing on healthcare infrastructure, digital health enhancement, and increasing specialist personnel to meet rising care demands.
Key View
- India will increase public health spending by double digits in the fiscal year 2025/2026, with its latest budget set to enhance healthcare infrastructure and digital health.
- We forecast India’s health expenditure will record a double-digit CAGR over the 2024-2029 forecast period, although spending as a share of GDP will remain comparatively low.
- India will prioritise increasing its healthcare personnel numbers, particularly specialist doctors, to meet the rising demand for care.
- India’s announcement that it will relax visas will drive growth in its medical tourism industry.
India will increase public health spending by double digits in its upcoming fiscal year, with its latest budget set to enhance healthcare infrastructure. On February 1 2025, India’s Finance Minister announced the Union Budget for the FY2025/26 (April – March). The Ministry of Health and Family Welfare received INR959.6bn (USD11.1bn), a 10.8% increase compared to revised estimates in FY2024/25. The budget has placed a strong focus on the country’s public health infrastructure, with increased allocations for public hospitals and medical colleges. This includes improved funding for Safdarjung hospital, one of India’s largest tertiary care facilities, and Kalawati Saran Children’s hospital in New Delhi. Additionally, plans were also announced to establish 200 day care cancer centres, which will help to facilitate earlier diagnosis and treatment. Key healthcare projects and schemes received increased funding, including a 46.9% increase for the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM), which aims to strengthen health infrastructure at the primary, secondary and tertiary care levels.
The budget will advance digital health in India’s healthcare system, including its use in primary health centres. India’s National Digital Health Mission, which aims to integrate digital technologies to enhance access to care, received a significant increase of 51.2%, although it still represents a small portion of the total health budget. Additionally, the country’s National Tele Mental Health Programme received improved funding, aligning with our view that governments would allocate greater funds towards mental health services in 2025. The government also announced its plan to implement broadband connectivity in all rural primary health centres. This aims to enhance telemedicine infrastructure to improve access to services including timely and accurate disease diagnosis. We expect this will benefit healthcare services in remote and underserved areas of the country and facilitate advanced diagnostic capabilities and support AI-driven radiology services, which have been growing in India, enhancing the overall efficiency and effectiveness of healthcare delivery. However, we highlight infrastructure limitations and varying levels of digital literacy, especially in rural regions, as significant obstacles to the widespread adoption and implementation of these technologies.
As India moves towards 2025, the healthcare budget reflects a pivotal shift in prioritizing infrastructure, personnel, and digital health. The government is expected to allocate a significant portion of the budget to expand healthcare facilities, particularly in rural and underserved urban areas. This focus on infrastructure aims to enable better access to medical services, reduce the burden on crowded hospitals, and improve overall health outcomes across the nation.
Equally crucial is the investment in healthcare personnel. The budgetary emphasis on training and recruiting qualified medical professionals aims to address the acute shortage of doctors, nurses, and allied health workers. Initiatives to enhance educational programs, as well as incentives for healthcare workers to practice in rural areas, are vital components of this strategy. Strengthening the workforce will ensure that the burgeoning healthcare needs of the population are met effectively and sustainably.
Lastly, the integration of digital health technologies is set to revolutionize the healthcare landscape in India. The budget is likely to allocate funds for telemedicine, digital health records, and AI-driven diagnostics, enhancing the efficiency and accessibility of care. By investing in these technologies, India aims to bridge the gap between patients and healthcare providers, streamline operations, and ultimately deliver improved health services to its diverse population.
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