Budget 2026: PMJAY Expansion and Healthcare Infrastructure Push Beyond Tier-1 Cities in Focus
With the Union Budget 2026–27 just days away, healthcare leaders and industry bodies are urging the government to go beyond incremental budget increases and introduce structural reforms aimed at strengthening India’s health system, particularly in underserved regions and in insurance coverage expansion.
Public Health Spending Below Policy Targets
India’s public health expenditure has been rising but remains below the National Health Policy’s target of 2.5% of GDP. In the financial year 2025–26, healthcare allocation grew to around Rs 95,958 crore from Rs 87,657 crore the previous year, marking a 9.46% increase. Yet total spending still accounts for less than 2% of the GDP.
Industry bodies such as NATHEALTH have called for sustained investment and policy support to bridge the gap between current spending and the National Health Policy goal. They have also highlighted the rising burden of non-communicable diseases and stressed long-term healthcare system strengthening.
Decentralising Healthcare Infrastructure
A key theme expected in the Budget is the decentralisation of healthcare services away from metros and Tier-1 cities. Stakeholders are advocating for incentives that promote hospital and infrastructure growth in Tier-2 and Tier-3 cities, as well as rural areas. They are also pushing for public-private partnership (PPP) models to improve secondary care capacity outside major urban centres.
Industry representatives have emphasised the need for easier access to capital, faster clearances, and more predictable reimbursement frameworks to encourage infrastructure development across the country.
Pradhan Mantri Jan Arogya Yojana (PMJAY) and Out-of-Pocket Costs
India has made notable progress in reducing out-of-pocket (OOP) healthcare spending, which fell from 62.6% in 2014-15 to 39.4% in 2021-22, a trend attributed in large part to the expansion of Ayushman Bharat and the Pradhan Mantri Jan Arogya Yojana (PMJAY) insurance scheme.
Under Ayushman Bharat — the broader health mission that includes PMJAY and Health & Wellness Centres — millions of beneficiaries now receive coverage for secondary and tertiary care services. Recent expansions include extending PMJAY benefits to all citizens aged 70 and above, irrespective of income.
Healthcare leaders have urged that Budget 2026 consider expanding the PMJAY beneficiary base further, increasing insurance cover limits, easing GST on health insurance premiums, and reducing duties on medical devices to lower costs across the health ecosystem.
Preventive Healthcare and Tax Incentives
Calls have also been made to enhance preventive health measures. One proposal under discussion is to raise the tax deduction limit for preventive health check-ups, which could encourage earlier diagnosis and reduce long-term treatment costs.
Status of Disease Elimination Goals
Budget discussions are also expected to highlight India’s progress on disease control targets. While India has met its Kala Azar elimination goal in endemic blocks, tuberculosis remains a significant challenge, with incidence rates still above national targets. Additional funding through programs such as Ni-kshay Poshan Yojana may be sought to sustain the fight against TB.
References
- Budget 2026: PMJAY expansion, healthcare infra push beyond tier-1 cities in focus — Moneycontrol, January 27, 2026. Full article on Budget 2026 healthcare priorities
- Budget 2026: NATHEALTH urges higher healthcare spending, flags rising NCD burden — Times of India, January 23, 2026.
- Ayushman Bharat – Universal Healthcare Scheme & Key Initiatives — IBEF overview of scheme progress.
- Delhi joins Ayushman Bharat-PMJAY scheme — Manorama Yearbook, April 7, 2025 (beneficiary expansion and coverage details).
- Hike healthcare spend to over 2.5% of GDP, give tax sops for preventive check-ups in Budget: NATHEALTH — Outlook Business, January 2026.
(Except for the headline, this story has not been edited by Bharatiya News staff and is published from a syndicated feed.)