₹1,06,530.42 crore allocated to the Ministry of Health and Family Welfare, nearly 10 per cent higher than FY 2025–26 Revised Estimates
₹9,500 crore for Ayushman Bharat PM-JAY, a 5.56 per cent increase
₹39,390 crore for National Health Mission, up 6.17 per cent
₹4,770 crore for PM-ABHIM, marking a 67.66 per cent surge
₹11,307 crore under PMSSY to support new AIIMS and medical college upgrades
₹10,000 crore over five years announced for Bio Pharma Shakti
₹350 crore allocated to Ayushman Bharat Digital Mission
New Delhi, February 1, 2026: The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, has placed healthcare firmly at the center of the country’s development agenda. The government has allocated ₹1,06,530.42 crore to the Ministry of Health and Family Welfare (MoHFW), nearly 10 per cent higher than the Revised Estimates of FY 2025–26.
The increased outlay marks the first time India’s healthcare budget has crossed the ₹1 lakh crore threshold, signaling a shift toward positioning healthcare as both a social priority and an economic growth sector.
This year’s health budget reflects a cumulative growth of over 194 per cent over the last 12 years, representing an additional increase of ₹70,349.75 crore compared to FY 2014–15. “The sustained rise in public expenditure underscores the Government’s unwavering commitment to expanding healthcare access, strengthening infrastructure, promoting medical research and innovation, and ensuring affordable and quality healthcare for all citizens,” the Ministry of Health and Family Welfare (MoHFW) stated in its press release.
The Pradhan Mantri Jan Arogya Yojana (PM-JAY) has been allocated ₹9,500 crore, registering a 5.56 per cent increase. The enhanced funding aims to expand beneficiary coverage, improve service quality, and strengthen hospital networks under India’s flagship health insurance program.
The National Health Mission (NHM) has received ₹39,390 crore, marking a 6.17 per cent rise. This allocation is intended to reinforce primary healthcare delivery, maternal and child health services, and disease control programs across states and Union Territories.
The sharpest increase has been recorded under the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), which has been allocated ₹4,770 crore, a 67.66 per cent surge over the previous year. This capital-intensive investment focuses on expanding critical care blocks, establishing integrated public health laboratories, and strengthening district and sub-district hospitals.
In addition, the scheme and non-scheme components of the health budget have both been enhanced, with scheme allocations rising by over ₹6,000 crore and non-scheme spending increasing by nearly ₹2,500 crore compared to FY 2025–26 Revised Estimates.
Under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), which supports the establishment of new AIIMS and the upgradation of government medical colleges, the total allocation for FY 2026–27 stands at ₹11,307 crore, an increase of ₹407 crore over last year.
Of the 22 new AIIMS approved, 18 are fully operational, offering teaching, research, OPD, IPD, emergency, and diagnostic services. Notably, 15 of these AIIMS were approved and 12 became operational after 2014, significantly expanding access to tertiary care in underserved regions.
Beyond AIIMS, the Budget outlines investments in cancer centers, super-specialty blocks, transplant units, robotic surgery centers, and AI-enabled medical facilities. Emergency and trauma care centers will be established in every district hospital to expand emergency care capacity and ensure affordable, round-the-clock (24×7) access to critical medical services across the country.
Medical education capacity has expanded substantially over the past decade, with MBBS seats more than doubling from around 51,000 before 2014 to over 1.28 lakh in recent years, according to government data. Postgraduate medical seats have also grown substantially, rising from roughly 31,000 to more than 70,000 over the same period, representing an increase near or around 100 percent and reflecting a major expansion of India’s trained medical workforce.
Medical education capacity has expanded substantially in recent years, with the Union Cabinet approving over 10,000 new MBBS and postgraduate seats as part of phased medical education expansion efforts, reflecting broader attempts to strengthen the healthcare workforce.
For FY 2026–27, the allocation for human resources in health and medical education has been increased to ₹1,725 crore, reflecting a 5.83 per cent rise. The funding will support the establishment of new medical colleges, the upgradation of undergraduate and postgraduate programs, and the expansion of nursing education.
A major highlight of the Union Budget 2026–27 is the launch of ‘Bio Pharma Shakti’, a national initiative with an outlay of ₹10,000 crore over five years. The program aims to boost domestic production of biologics and biosimilars, reduce import dependence, and position India as a global biopharmaceutical manufacturing hub.
The initiative also seeks to integrate research, clinical trials, and manufacturing ecosystems to strengthen India’s capacity for complex therapies and advanced biologics.
The initiative includes the establishment of three new National Institutes of Pharmaceutical Education and Research (NIPERs), the upgradation of seven existing NIPERs, and the creation of a national network of 1,000 accredited clinical trial sites. It also proposes strengthening the Central Drugs Standard Control Organization (CDSCO) through enhanced scientific review capacity.
To reduce out-of-pocket expenditure for patients, particularly those undergoing cancer treatment, the Budget proposes a full exemption of basic customs duty on 17 life-saving drugs.
In addition, seven more rare diseases have been added to the list eligible for customs duty exemption on personal imports of drugs, medicines, and Food for Special Medical Purposes (FSMP), easing the financial burden on affected families.
To address healthcare workforce shortages and generate employment, the government has proposed a phased outlay of ₹980 crore over three years for allied and healthcare professionals’ education.
The initiative includes setting up and upgrading allied health professional institutes across 10 disciplines to create nearly one lakh skilled professionals over five years. In addition, focused training programs will train 1.5 lakh geriatric caregivers. These measures will enhance diagnostic, preventive, rehabilitative, and public health services while positioning India as a global hub for skilled allied healthcare professionals, according to the Ministry of Health.
The Ayushman Bharat Digital Mission has received an allocation of ₹350 crore, a 7.94 per cent increase, aimed at accelerating the rollout of digital health records, interoperability frameworks, telemedicine platforms, and integrated hospital information systems.
On the mental health front, the Budget proposes upgrades to premier mental health institutions in Ranchi and Tezpur, along with the establishment of NIMHANS-II in North India. These initiatives aim to significantly expand access to advanced mental healthcare, training, and research facilities.
To promote medical value tourism, the Budget introduces a scheme to establish five Regional Medical Hubs in partnership with states and the private sector. These hubs will function as integrated healthcare complexes, combining medical services with education, research, diagnostics, rehabilitation, AYUSH centers, and international patient facilitation.
The Regional Medical Hubs are designed as integrated public–private healthcare clusters to strengthen India’s medical value tourism ecosystem.
The Ministry of AYUSH has received an allocation of approximately ₹4,409 crore, around 20 per cent higher than last year’s revised estimates. The Budget also proposes three new All India Institutes of Ayurveda. It also proposes upgrades to AYUSH pharmacies and drug-testing laboratories. The budget also aimed to strengthen the WHO Global Traditional Medicine Center in Jamnagar to promote evidence-based research and global outreach.
References:
Ministry of Health and Family Welfare, Union Budget 2026–27: ₹1,06,530.42 Crore Allocated to Ministry of Health and Family Welfare, Registering Nearly 10% Rise from Revised Estimates of FY 2025–26 (New Delhi: Government of India, February 1, 2026), press release.
Government of India, Press Information Bureau. “Union Budget 2026–27 Health Sector Highlights and Key Announcements.” Press Information Bureau, February 1, 2026. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2221616
Sitharaman, Nirmala. Union Budget 2026–27 Speech. Ministry of Finance, Government of India, February 1, 2026.
(Rh/VK)