Non-communicable diseases, elderly care, and the manufacturing of bio-pharmaceuticals received a favourable mention in Budget 2026, alongside additional tax waivers on 17 drugs used to treat cancer and 7 for rare diseases.
This year’s Budget allocation on health stood at ₹1,06,530.42 crore, a 6 per cent increase from ₹98,311 (budget estimate) last year, and a 10 per cent increase over the revised estimates (RE) FY 2025–26.
In a boost to manufacturing, the Budget outlined a “Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation)” scheme, against the backdrop of India’s disease burden, which is seen as shifting towards non-communicable diseases such as diabetes, cancer and autoimmune disorders.
“Biologic medicines are key to longevity and quality of life at affordable costs,” the FM noted, announcing an outlay of ₹ 10,000 crores over five years to build India as a bio-manufacturing hub. “This will build the ecosystem for domestic production of biologics and biosimilars,” she said. The proposal included three new National Institutes of Pharmaceutical Education and Research (NIPERs), as well as upgrading the seven existing ones. It also proposed establishing a network of 1,000 accredited Indian clinical trial sites.
Another key mention impacting pharmaceuticals and medical devices is the move to strengthen the regulatory Central Drugs Standard Control Organisation “to meet global standards and approval timeframes through a dedicated scientific review cadre and specialists,” the FM said.
Initiatives were also outlined for Allied Health Professionals (AHPs), through upgrading existing institutions and adding new AHP Institutions in the private and Government sectors. “This will cover 10 selected disciplines, including optometry, radiology, anaesthesia, OT Technology, Applied Psychology and Behavioural Health and add 100,000 AHPs over the next 5 years,” the FM said.
Care givers & mental health
The Budget spotlighted the “Care Ecosystem,” which covers geriatric and allied care services. Programmes will be developed to train multiskilled caregivers, combining skills such as the operation of medical and assistive devices, she said, adding that in the coming year, 1.5 lakh caregivers would be trained.
The Budget alluded to mental health and trauma care. “There are no national institutes for mental healthcare in North India,” she said, announcing the setting up of NIMHANS-2 and also upgrading the National Mental Health Institutes in Ranchi and Tezpur as regional apex institutions. “Emergencies expose families, particularly the poor and vulnerable, to unexpected expenditure,” she said, proposing the strengthening and increase in capacities by 50 per cent in District Hospitals by establishing Emergency and Trauma Care Centres.
Medical Value Tourism
To promote medical value tourism, the FM said States would be supported in establishing five Regional Medical Hubs in partnership with the private sector. These hubs would combine medical, educational, and research facilities, and include AYUSH centres, medical value tourism facilitation centres, and infrastructure for diagnostics, post-care, and rehabilitation, besides providing diverse job opportunities for health professionals.
Given the growing acceptance of Ayurvedic products and exports, the Budget sought to help farmers who grow these herbs and the youth who process them. Initiatives included the setting up of three new All India Institutes of Ayurveda; an upgrade of AYUSH pharmacies and drug-testing labs to higher standards of certification; and an upgrade of the WHO Global Traditional Medicine Centre (Jamnagar) to bolster evidence-based research, training, and awareness for traditional medicine.
The Budget listed 17 new drugs/medicines for exemption from basic customs duty, from 5/10 per cent to nil. Seven rare diseases that are part of the National Policy for Rare Disease (NPRD), 2021, would be included for customs duty exemption (as applicable) on drugs, medicines and food for special medical purposes, when imported for personal use, the FM said.
Flagship schemes
The Pradhan Mantri Jan Arogya Yojana (PM-JAY) allocation has been increased by ₹500 crore to ₹9,500 crore, representing a 5.56 per cent rise over RE FY 2025–26, the Health Ministry said. The increase is aimed at expanding beneficiary coverage, improving service quality, and strengthening hospital networks.
The allocation for the National Health Mission (NHM) has been enhanced to ₹39,390.00 crore, up by ₹2,289.93 crore, marking a 6.17 per cent rise over RE FY 2025–26, to further strengthen primary healthcare delivery, maternal and child health services, and disease control interventions across States and Union Territories.
The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) saw an allocation of ₹4,770 crore in BE 2026–27 – an increase of ₹1,925 crore – aimed at expanding critical care blocks, integrated public health laboratories, district and sub-district hospitals, and other health infrastructure facilities, it added.
Published on February 1, 2026
