Union Budget 2024-25 Gives a Meager 0.37% Hike to Healthcare Funding

However, the FM also announced the allocation of INR 2,143 Cr for the pharmaceutical PLI scheme.

The Union Budget 2024-25 has delivered a disappointing increase for the healthcare sector, offering only a marginal 0.37% rise in funding. The government has allocated INR 89,287 Cr for the development, maintenance, and improvement of the nation's healthcare system for FY25, up from INR 88,956 Cr in FY24.

Additionally, INR 2,143 Cr has been earmarked for the Production Linked Incentive (PLI) scheme for the pharmaceutical industry.

On July 23, Finance Minister Nirmala Sitharaman exempted three more cancer medications from customs duties.

This follows the March 2023 exemption from basic customs duty of Pembrolizumab (Keytruda), a Merck cancer drug used for cervical cancer.

The government has also exempted foods and drugs used for rare diseases, as listed in the National Policy for Rare Diseases 2021, which includes Wilson's disease, cystic fibrosis, and pompe disease.

Medicines typically attract a basic customs duty of 10%, while some life-saving drugs or vaccines attract a concessional rate of 5% or are completely exempt from duties.

Treatments for spinal muscular atrophy or duchenne muscular dystrophy are among those already exempt from customs duty.

The government has proposed changes in the Basic Customs Duty (BCD) on x-ray tubes and flat panel detectors used in medical x-ray machines under the Phased Manufacturing Programme. These changes aim to align with the addition of domestic capacity.

The government also plans to operationalize the Anusandhan National Research Fund for basic research and prototype development.

Additionally, in line with the interim budget announcement, a mechanism will be established to spur private sector-driven research and innovation at a commercial scale with a financing pool of INR 1 Lakh Cr.

Interim Budget Highlights

In the Interim Union Budget for 2024-25, presented in February, the Finance Minister allocated INR 90,171 Cr to the health sector for FY25, up from INR 79,221 Cr in FY24.

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) allocation was increased from INR 7,200 Cr in FY24 to INR 7,500 Cr in FY25.

Additionally, the allocation for the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission was raised from INR 2,100 Cr in FY24 to INR 4,108 Cr in FY25.

Besides, upgrades to Anganwadi centers under the 'Saksham Anganwadi and Poshan 2.0' initiative are planned to combat malnutrition and enhance early-stage healthcare services.

Healthcare coverage under Ayushman Bharat has been extended to all ASHA workers, Anganwadi workers, and helpers. Furthermore, the allocation for biotechnology research and development has been increased from INR 500 Cr in FY24 to INR 1,100 Cr in FY25.