Particularly in the wake of the COVID-19 pandemic, health has gradually taken centre stage in India’s development rhetoric. Although there has been steady increase in the Union Budget for health in recent years, it is still unclear if this increase will be adequate and strategic enough to provide noticeable health results. Expectations are influenced by existing appropriations, structural deficits, and new health issues as India looks to the 2026–2027 budget cycle.
The Ministry of Health and Family Welfare received around ₹1 lakh crore in the Union Budget 2025–2026, an 11% increase over the year 2024. This underscores the government’s sustained commitment to upgrading health systems, especially through flagship programmes such as the National Health Mission (NHM), Ayushman Bharat–PM Jan Aarogya Yojana (PMJAY), and the PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM). However, with combined national and state spending hovering around 1.8%, health spending in India continues to fall short of the National Health Policy target of 2.5% of GDP.
Strengthening Primary Healthcare as the First Line of Defence
By 2026–27, one of the most crucial predicted effects of current financial priorities is the consolidation of primary healthcare. The goal of NHM and PM-ABHIM investments is to upgrade the infrastructure at community health centres, primary health centres, and sub-centres. The services offered by Ayushman Aarogya Mandirs (formerly known as Health and Wellness Centres) have already expanded to encompass mental health, senior care, and screening for non-communicable diseases.
If funds continue to rise gradually but consistently, the outcome by 2026–27 should be better access to preventive and promotive healthcare, particularly in rural and underserved regions. This is crucial for lessening the burden of disease as well as out-of-pocket costs, which still make up almost half of India’s total health spending.
Expanding Financial Protection Through Health Insurance
One of the most noticeable health budget initiatives has been the extension of PMJAY. The benefit base is growing due to higher funding and new policy changes that include gig workers and older persons over 70. More financial risk protection for disadvantaged populations, particularly against expensive hospitalization, is anticipated by 2026–2027.
However, closing enduring gaps—such as uneven access to empanelled hospitals and restricted coverage of outpatient care—will be necessary for the budget to be effective. The plan could drastically lower catastrophic health costs over the next two years if future budgets start to trial OPD coverage or bolster public hospitals in addition to insurance growth.
Addressing the Rising Burden of Non-Communicable Diseases
Non-communicable diseases (NCDs) like diabetes, heart disease, and cancer are steadily replacing communicable diseases in India. NCDs now account for the bulk of deaths, despite improvements in health indicators including maternal and newborn mortality. This change has only been partially reflected in budgetary allocations thus far.
One of the main expectations is that NCD prevention and management will be given more priority by 2026–2027. This will be achieved by increasing funding for screening, early diagnosis, and long-term care at the primary level. Without this, improvements in life expectancy run the risk of being outweighed by increases in morbidity and medical expenses.
Investing in Human Resources for Health
Medical education and human resources are another important financial focus area. Over the next years, the government intends to add tens of thousands of medical seats. The availability of specialists and doctor-to-population ratios in India may somewhat improve by 2026–2027 if existing allocations are used efficiently.
However, shortages continue to be severe, particularly in rural regions. Expected results will depend not just on the creation of seats but also on upgrading nursing education, filling faculty vacancies, and providing incentives for service in neglected areas.
Health Research and Preparedness for Future Crises
Lastly, the budget’s spending on illness surveillance and health research indicates an awareness of potential hazards. Even overall health research funding is still extremely low by international standards, small increases could help organizations like the Indian Council of Medical Research. By 2026–2027, enhanced research capabilities and surveillance systems could increase India’s readiness for pandemics and health risks associated with climate change.
In conclusion
Instead of a revolutionary leap, the trajectory of health spending points to gradual advancement. Stronger primary healthcare, more insurance coverage, and steady advancements in infrastructure and human resources are anticipated by 2026–2027. However, establishing enduring health security would require not just bigger budgets, but better alignment with disease patterns, stronger state capacity, and a continued push towards universal health care.
Dr Bulbul Sood-Former Country Director Jhpiego, Senior Advisor-RMNCAH with WJCF, PSI-India and IMMAST, Director on the board of JSIPL and Population council Institute
Clear Cut Health Desk
New Delhi, UPDATED: Jan 31, 2026 05:53 IST
Written By: Bulbul Sood
