The Union budget for 2026-27 promises cheaper cancer medicines, a large push to train allied health workers, and expanded mental health care, but experts say the modest rise in outlay risks leaving public healthcare services as underfunded as before.

The budget has proposed an outlay of ₹1,01,709 crore for the health department in 2026-27, a 6 per cent increase over the current year, to fund services that range from primary care and immunisation to chronic disease treatment and hospitalisation.

Finance minister Nirmala Sitharaman, presenting her budget speech, outlined initiatives to bolster emergency and trauma services in every district hospital, establish a second National Institute of Mental Health and Neurosciences (NIMHANS), and expand India’s biopharma manufacturing capacities.

Experts, including health economists, said the increase appears set to translate into a decline in the government’s share of health expenditure, from a stagnant 0.29 per cent of India’s gross domestic product (GDP) over the past five years to an estimated 0.27 per cent.

“The outlay for health as a percentage of the total budget remains stagnant at 2 per cent,” said Ravi Duggal, a social science researcher in Mumbai, who last week joined a public health network urging the Centre to double its health allocation.

Sitharaman proposed exempting basic customs duty on 17 drugs, mainly cancer medicines, and on drugs and special medical food for seven rare diseases — a move the health ministry said would lower prices and reduce households’ out-of-pocket spending.

The duty-exempt medicines include abemaciclib, brigatinib, ceritinib, ipilimumab and trametinib, used in advanced cancers of the breast, lung, gastrointestinal tract and prostate. Exemptions also cover treatments for inherited metabolic, genetic, and immune disorders, such as primary immune deficiency disorders and hereditary angioedema.

The budget unveiled a programme to upgrade institutions training allied health professionals in 10 disciplines — including anaesthesia, applied psychology, surgical theatre technology, optometry and radiology — aiming to add 1,00,000 new AHPs over five years. Another scheme will train 1,50,000 multi-skilled caregivers across geriatric and other services in the coming year.

“We need to augment the capacity of core clinical staff, including allied health professionals,” said Sarang Deo, a professor at the Indian School of Business in Hyderabad. “These cadres should handle home care, long-term nursing, rehabilitation and senior living services.”

Citing the absence of a specialised institute for mental healthcare in northern India, the government said it would establish a second NIMHANS and upgrade mental health hospitals in Ranchi and Tezpur. The existing NIMHANS in Bengaluru, set up in 1974, is a leading hospital and research training centre for neurosciences and psychiatry.

The budget signals a push for the biopharma sector, with ₹10,000 crore over five years to expand domestic capacity for producing biology-based medicines, reducing import dependence and, over time, improving access and affordability. Emergency and trauma centres will also be established in district hospitals nationwide, ensuring critical care at affordable costs.

Spending on health research, including allocation for the Indian Council of Medical Research, will increase by 24 per cent to ₹4,821 crore, supporting biomedical and public health research amid growing strain from chronic disease and ageing populations.

While the health ministry has called the budget a reaffirmation of commitment to a resilient and inclusive healthcare system, Duggal and other experts disagreed.

“Disappointed with the budget for the health sector … nothing in it for the majority of Indians,” wrote K. Sujatha Rao, a former Union health secretary, on X.

The outlay for the National Health Mission has increased by ₹2,290 crore. “This is a very nominal increase,” Rao said. Duggal described the ministry’s statement as “fancy language”, downplaying the lack of a meaningful rise.

The Jan Swasthya Abhiyan, a network of health experts and economists, had urged the Centre to double its health outlay to ₹2,00,000 crore as a step toward raising public health expenditure to 2.5 per cent of GDP, a long-standing goal of successive governments for over two decades.

Without such a shift, analysts warn, India’s public health system will remain dependent on household spending, leaving families to absorb the cost of chronic illness and long-term care.