Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2025-26 on February 1, 2025. This time the government is continuously increasing its focus on the health sector. Due to which the allocation for major sectors like health can be increased by about 10 percent in this budget. Also, there is a demand for uniform GST on medical devices. Talking about the general budget last year, the Finance Minister had given Rs 90,958 crore for health.
Expectation of reduction in tax in the new financial budget
The health sector is also expecting tax reform in the upcoming budget. Experts associated with this sector are advocating to make GST on health services zero or bring it in the 5 percent slab. This can significantly reduce the cost of hospitals and nursing homes.
Dr Ashish Chaudhary says, restoring 150 per cent deduction under Section 35AD of the Income Tax Act for new healthcare projects and providing tax exemption for a minimum period of 15 years for new projects, as well as 10 years of tax relief for existing facilities are also key demands.
Union Budget FY 2025-26 also suggests India with Ayushman Card
Tier 2 and Tier 3 cities of India are underserved in terms of healthcare infrastructure. The health industry is emphasizing the urgent need to increase private healthcare facilities in these areas. The Ayushman Bharat-PMJAY scheme aimed at improving healthcare access has increased demand in smaller cities. However, the health sector claims that the current pricing model of the scheme fails to reflect the actual cost of service delivery. This puts healthcare providers in financial difficulties.
Dr Rajendra Patankar, CEO of Jupiter Hospital in Baner Pune, said, “Rationalizing package pricing and operating costs for power and utilities is important. Providing subsidies, which are given to government hospitals, can reduce this burden. Without equitable pricing models and relief on operational costs, healthcare providers cannot sustain operations in these areas,” he said.
NCDs to cost India $6 trillion
The rise in non-communicable diseases (NCDs) is another significant challenge. By 2030, NCDs are estimated to cost India $6 trillion. This has made comprehensive screening and diagnosis programmes an urgent priority. Dr Aakar Kapoor, CEO, City X-Ray, emphasised the importance of these programmes, saying, “Early detection can reduce long-term healthcare costs and improve patient outcomes. Incentives such as tax exemptions for diagnostic centres and reduced import duty on equipment are required to make this vision a reality.”
India also has tremendous potential for medical value travel (MVT), but current policies do not fully support this emerging sector. Dr N K Pandey, Chairman and Managing Director, Asian Hospital, emphasised, “Tax exemptions on income from medical tourism and simplification of visa process for international patients can make India a global hub for healthcare services. India’s medical expertise and cost advantages are unmatched, but policy reforms in medical visas and rationalisation of fees are required to attract more patients.”
