Event Report
Paridhi Jain
The IMPRI Center For Human Dignity And Development (CHDD) – IMPRI Impact And Policy Research Institute, New Delhi, organized a thematic discussion on Population, Health and Union Budget 2026-27 as part of IMPRI’s 7th Annual Series Of Thematic Deliberations And Analysis Of Interim Union Budget 2026-27 which was held on February 5, 2026, 11:30 am IST.
The discussion commenced with Priyanka, a researcher at IMPRI, greeting everyone. She introduced the chair and moderator, Dr Manorama Bakshi, Director and Head of Healthcare and Advocacy, Consocia Advisory; Founder and Director, Trilok Raj Foundation (TRF); Visiting Senior Fellow, IMPRI.
She then introduced the distinguished panel of experts, which included :
- Dr Shoba Suri, Senior Fellow, Health Initiative, Observer Research Foundation (ORF),
- Urvashi Prasad, Ex-Director, Office of Vice-Chairman, NITI Aayog
- Prof Sanghmitra Sheel Acharya, Professor, Centre of Social Medicine and Community Health (CSMCH), JNU
- Dr Praveen Aggarwal, Co-Founder and Director, Consocia Advisory
- Mr Abhijit Mukhopadhyay, Senior Research Consultant, Chintan Research Foundation (CRF), New Delhi
- Mr Varun Sharma, Senior Specialist, Monitoring & Evaluation, Population Foundation of India (PFI)
OPENING REMARKS BY THE CHAIR
The session was opened by Dr. Manorama Bakshi, Chair of the discussion, who framed the Union Budget 2026–27 within India’s changing health landscape. She noted that health challenges in India are no longer limited to access or episodic illness, but are increasingly shaped by demographic aging, the rising burden of non-communicable diseases(NCDs) which accounts for nearly 60% of mortality along with their implications for productivity, care systems, and long-term economic resilience.
Turning to budgetary provisions, she highlighted that the total allocation to the Ministry of Health and Family Welfare stands at ₹1,06,530.42 crore, marking a nominal increase of about 10% over the previous year and the first time the health budget has crossed the ₹1 lakh crore mark. While this reflects increased visibility of health in national priorities, she stressed that its real significance depends on how effectively these allocations translate into system capacity and outcomes.
Within that, she outlined key allocations and initiatives under the budget. Of the total allocation, ₹1,01,179.2 crore has been provided to the Department of Health and Family Welfare, while ₹4,848.21 crore has been allocated to the Department of Health Research, reflecting a 24% increase over last year.
Major initiatives include the introduction of the Bharat Bio -Armour Shakti programme, with an outlay of ₹10,000 crore over five years to promote biologics and biosimilars; the establishment of five regional medical value tourism hubs aligned with the Viksit Bharat 2047 vision; and a strong focus on health workforce development through the expansion of allied health institutions across 10 disciplines, aiming to add one lakh professionals over five years.
The budget also proposes training 1.5 lakh multi-skilled caregivers for geriatric care, strengthening traditional systems of medicine through new institutes of Ayurveda, expanding mental health infrastructure with a new NIMHANS in North India and upgrades in Ranchi and Tezpur, and improving drug affordability through customs duty waivers on select cancer and rare disease medicines.
While acknowledging the intent and range of these measures, Dr. Bakshi offered a Critical assessment of the budget’s limitations. She observed that the real growth in health spending is modest once medical inflation and demographic pressures are considered, meaning the budget largely sustains existing systems rather than creating significant new capacity. She also highlighted the continued imbalance between service delivery and research spending, with a disproportionately small share allocated to health research despite rising NCDs and emerging risks such as pandemics, antimicrobial resistance, and climate change.
Further, she noted that the focus remains skewed towards tertiary care, with insufficient attention to prevention, surveillance, and community-based interventions. She adds on the Execution risks for new initiatives and Workforce gaps, such as wage protection, training, deployment to underserved areas, etc.
Concluding her remarks, she described the budget as one of stability and selective ambition rather than transformation, emphasising the need to move from treatment to prevention and from a welfare approach to viewing health as economic infrastructure, since health is not just an outcome of development but its foundation.
CRITICAL REFLECTIONS ON THE HITS AND MISSES OF THE HEALTH BUDGET
Dr. Urvashi Prasad delivered a candid critique of the Union Budget 2026–27, arguing that increases in absolute health allocations mask deeper inadequacies. Public health spending remains below 2% of GDP, well short of the 2.5% target set by India’s National Health Policy (2017), even nearly a decade later. In comparison, neighbouring countries spend 4–6% of GDP on health. She stressed that health continues to be treated as an “expense” rather than as an investment in the workforce and demographic dividend.
Drawing on her own experience as a cancer patient, she highlighted the contradiction between rising disease burdens and cuts to pollution control budgets, despite clear links between air pollution and illnesses such as lung cancer, noting that annual 10% increases do not signal real ambition.
While she welcomed initiatives such as bio-pharma promotion, expanded clinical trials, and research funding such as Bharat Bio-Armour Shakti (24%), she emphasised the real concerns as execution, quality, accreditation and certification -Mental health, Geriatric care, Caregiving Training (1.5 lakh) etc. She also flagged India’s troubled clinical trial history, recalling the tighter safeguards introduced by former Health Secretary Keshav Desiraju due to ethical violations and weak informed consent among poor and vulnerable populations.
She also noted that customs duty exemptions on select cancer drugs reduce costs by only 5–10%, offering limited relief, while hundreds of imported oncology drugs, including targeted therapies, remain excluded from PM-JAY and unaffordable for most patients (99.9%) highlighting affordability gaps as stage-4 patients survive in the US but not in India.
Dr. Prasad further criticised the neglect of primary care, prevention, environmental health, and equity. Excessive focus on secondary and tertiary care has left many Ayushman Arogya Mandirs underfunded (₹1.8 lakh) and poorly functional. Rendering Delhi as “the pollution capital”, she mentions Environmental health cuts as delusional with Uranium in groundwater and unbreathable air (200-300AQI) . She called for explicit rural, gender, marginalised, and occupation-sensitive interventions, better insurance coverage for advanced therapies, and evidence-based integration of AYUSH through rigorous research, drawing on her experience at NITI Aayog. She concluded that without treating health as economic infrastructure rather than welfare spending, incremental budgetary measures will remain inadequate.
REMARKS ON FINANCING HEALTH FOR VIKSIT BHARAT 2047
Dr. Praveen Aggarwal adopted an optimistic but pragmatic lens, situating the health budget within the larger vision of Viksit Bharat 2047. He argued that the central question is not whether allocations have increased as they have by roughly 10–12.5% across insurance, innovation, research, digital health, and AYUSH, amounting to about ₹1.25 lakh crore. Instead, whether health financing is aligned with India’s long-term demographic and productivity challenges. With an ageing population and a narrowing demographic dividend as expected by 2047, he stressed that health and mental health must be treated as foundational investments, alongside education, rather than as residual social expenditure.
Highlighting structural constraints, he noted that public health spending at 2% of GDP translates to barely ₹2 per person per day, while out-of-pocket expenditure remains close to 50%. Since states deliver 65–70% of health services, uneven utilisation of National Health Mission funds results in India functioning largely as a privately financed health system. Per capita public spending of roughly ₹700 annually must stretch across prevention, primary care, hospitals, medicines, diagnostics, mental health, surveillance, and digital systems, making efficiency and prioritisation critical.
He pointed to a mismatch between PM-JAY coverage (around 50% of the population, with only 62–65% utilisation) and underinvestment in primary care, arguing that redirecting even 5–10% of incremental growth towards diagnostics and frontline services could reduce avoidable hospitalisation.
Citing state evidence, Dr. Aggarwal argued that execution, not allocation, determines outcomes. Tamil Nadu achieves ~92% NHM utilisation through predictable financing, staffing, and procurement, while Odisha reached 104% due to rapid fund flow and administrative readiness, showing money is not the binding constraint. Weak absorption and end-of-year rush spending often dilute the impact. He proposed outcome and efficiency-linked financing, including PLI-style incentives tied to utilisation and service delivery, and infrastructure-linked models to crowd in private capital, noting that 2% of GDP is insufficient and long-term needs may approach 6%.
He also flagged regulatory lags in digital health: pathology rules still require one physical pathologist per lab despite AI reporting, and dialysis norms mandate one MBBS doctor per centre, constraining scale (about 10,000 centres versus an estimated need of 25,000). He concluded that targeted regulatory reform combined with outcome-based budgeting could substantially improve returns on existing health allocations.
DEMOGRAPHY, YOUTH AND GENDER IN THE HEALTH BUDGET
Dr. Varun Sharma placed the Union Budget 2026–27 within India’s critical demographic transition, marked by declining fertility, rapid ageing, and a shrinking demographic dividend beyond 2031. He argued that population health, women’s agency, and youth wellbeing are economic necessities, not social add-ons. While the health budget increased by around 10% (7.7% by some estimates), per capita central spending remains low at about ₹745 per person per year, i.e., roughly ₹2 per day—excluding state and out-of-pocket expenditure, and well below levels in countries such as China and Brazil. He also highlighted mid-year health budget cuts of nearly ₹3,000 crore in FY 2025–26, which disrupted public systems, while health’s share of the Union Budget remains stagnant at around 2%.
Turning to programme priorities, he noted that the National Health Mission allocation stands at ₹39,390 crore, with the RMNCH+A and Health System Strengthening flexi-pool receiving ₹31,820 crore – only a 6.5% increase over revised estimates and with negligible capital outlay, raising concerns given that NHM supports rural areas comprising about 63% of the population. Family Welfare funding declined by 1% compared to BE and rose only 1.7% over RE, signalling weak prioritisation.
While announcements such as a new NIMHANS in North India were welcomed, the National Tele-Mental Health Programme saw a 36% cut from last year’s BE, despite suicides being the leading cause of death among youth aged 15–29 and India having nearly 365 million young people. He also flagged concerns with the gender budget, i.e., 9.4% of total expenditure, but only ~20% in Part A schemes, concluding that the budget recognises demographic challenges but finances them inadequately, prioritising control over scale and risking the erosion of past gains.
VULNERABLE POPULATIONS, AFFORDABILITY AND SYSTEM GAPS
Prof. Sanghmitra Sheel Acharya focused her remarks on vulnerable populations, arguing that headline increases in the health budget of around 7–10% matter only insofar as they translate into protection for those most at risk. She highlighted three priority areas: mental health, affordable care for NCDs such as cancer, and the Bharat Bio-Armour Shakti initiative. While the latter positions India as a producer of biologics, she stressed the need to examine its implications for affordability, environmental alignment, and availability of a skilled workforce amid rising disease burdens.
Although health research allocations rose by 24%, she noted that overall public health spending remains close to 2% of GDP, limiting the potential to reduce out-of-pocket expenditure. Family welfare allocations declined by about 1.6%, a missed opportunity given India’s fertility transition, while duty exemptions on 17 cancer drugs offer limited relief when hundreds of oncology medicines continue to be imported, leaving access for vulnerable patients unclear.
She further flagged implementation and equity gaps across programmes. Despite available funds, NHM utilisation stood at only about 62% in FY 2024–25, with regional disparities undermining service delivery for vulnerable groups. Budget provisions for mental health and trauma care- including a second national mental health institute, expanded trauma facilities in district hospitals, and upgrades in Ranchi and Tezpur were welcomed, particularly given the heavy burden of injuries, road traffic accidents, disability, and their links to mental health and livelihoods, especially among youth.
However, she underscored persistent gaps in “golden hour” trauma care, rehabilitation, prevention, data, and surveillance. She cautioned that social identity, gender, disability, and remoteness continue to shape unequal health outcomes, and noted that although sub-plan allocations for Scheduled Castes and Tribes have increased, utilisation remains weak. Concluding, she argued that without stronger implementation, prevention, and affordability pathways, budgetary provisions risk falling short of protecting those who need them most.
NUTRITION, GENDER AND HUMAN CAPITAL
Dr. Shobha Suri situated nutrition at the centre of human development and economic growth, linking it closely with gender inequality and vulnerability among women and children. She noted that despite decades of targeted programmes, India continues to face a severe nutrition crisis: nearly one-third of children are stunted, one-fifth are wasted, and around 50% of women of reproductive age suffer from anaemia. These deficits, she argued, directly undermine cognitive development, learning outcomes, labour productivity, and intergenerational mobility. Nutrition, therefore, can no longer be treated as a peripheral social sector concern, but must be recognised as a core investment in human capital and the demographic dividend.
Turning to budgetary provisions, Dr. Suri observed that the nutrition budget has seen an incremental increase of around 10% over the previous revised estimates, which she described as tokenistic given India’s population size and economic growth. The allocation under the Ministry of Women and Child Development stands at approximately ₹23,000 crore, largely routed through Saksham Anganwadi and Poshan 2.0. However, costing studies suggest that ₹38,000–44,000 crore is required annually for nutrition-specific and nutrition-sensitive interventions to achieve meaningful impact, indicating a substantial financing gap that the current budget does not address.
She further highlighted persistent implementation challenges, particularly weak fund utilisation across states. Drawing on evidence from NITI Aayog, she noted that underutilisation reflects gaps in district- and block-level planning capacity, innovation, and frontline support. Anganwadi and other frontline workers continue to carry heavy workloads with inadequate remuneration, infrastructure, and training. While digital tools such as the Poshan Tracker are useful, she stressed that technology cannot substitute for sustained investment in skills and human resources.
Finally, Dr. Suri critiqued the lack of genuine convergence across nutrition-sensitive sectors. Although Poshan 2.0 is designed as a multi-sectoral initiative encompassing health, WASH, maternity benefits, food security, and livelihoods, budgeting and implementation remain siloed. She called for a clear roadmap towards adequate financing, stronger decentralised planning and monitoring, rebalancing investments towards frontline workers, and real inter-ministerial convergence with shared targets and accountability. Without such reforms, she warned, nutrition outcomes will continue to lag despite repeated policy recognition.
FISCAL CONTEXT, PRIORITIES AND THE WAY FORWARD
In his closing remarks, Mr. Abhijit Mukhopadhyay placed the discussion within the broader macro-fiscal context, noting that health budgeting must be understood against the government’s fiscal deficit target of 4.3% of GDP, down from 4.5%. With limited fiscal space and a widening gap between revenue and expenditure in a turbulent global environment, he acknowledged the constraints under which social sector spending operates. While agreeing with earlier speakers that health should not bear the brunt of fiscal consolidation, he pointed out that, in absolute terms, health allocations have consistently increased over the last decade, even if their share of GDP remains inadequate and is the more meaningful metric for assessment.
Reflecting on budget priorities, he highlighted some identifications. Mental health and trauma care received greater visibility in the Finance Minister’s speech, signalling an important shift in public discourse. Flagship initiatives such as Ayushman Bharat and the PM-Ayushman Infrastructure Mission (PM-AIM) were recognised as central to strengthening primary care, though the PM-AIM allocation of around ₹4,770 crore was described as modest relative to population needs.
He also welcomed increased investments in tertiary and cutting-edge care, including PM-SSY allocations of roughly ₹11,300 crore, but cautioned against imbalance at the cost of primary and secondary systems. On research, allocations of about ₹4,800 crore to the Department of Health Research (with nearly ₹4,000 crore for ICMR) and the Bharat Bio-Armour Shakti initiative (₹10,000 crore over five years) were seen as steps in the right direction, though underpowered when compared to private global benchmarks where R&D spending often reaches 15–20% of earnings.
Concluding, Dr. Mukhopadhyay argued that while the budget correctly identifies priorities, its scale remains insufficient for India’s global ambitions, particularly when health and education are increasingly viewed as foundational rights. He called for a clearer medium-term commitment to raise public health spending to 2.5% of GDP by 2030, better redistribution towards underserved districts, and a stronger emphasis on implementation, monitoring, and evaluation. Without improvements in utilisation and accountability at the ground level, he warned, even well-intentioned allocations risk limited impact. A healthy population, he concluded, remains central to equitable and sustained economic growth.
PANEL CONCLUSION AND CLOSING REMARKS
Dr. Praveen Aggrawal offered a collective synthesis of the panel’s deliberations, noting that the Union Budget 2026–27 reflects a broadly positive trajectory in health through investments in infrastructure, insurance, innovation, research, digital health systems, mental health, and AYUSH. He emphasised that future progress will depend on better alignment between prevention, financing mechanisms, and primary care, as well as ensuring that capital investments are matched with adequate operational funding, technology deployment, and human resources. He underscored that the vision of Viksit Bharat should be judged not by the number of hospitals built, but by diseases prevented, productivity preserved, and households protected from health-related financial shocks.
Adding a final substantive comment, Prof. Sanghmitra Sheel Acharya highlighted a critical gap in the budget’s approach to injury prevention and road safety. While welcoming investments in mental health, NCD care, and biologics, she cautioned that road traffic injuries remain a major public health challenge with deep links to trauma, disability, mental health outcomes, and economic loss. Greater emphasis on prevention, trauma systems, and equity-focused interventions, she argued, would significantly reduce avoidable deaths and long-term livelihood impacts, particularly among vulnerable populations.
In her closing summation, the Chair, Dr. Manorama Bakshi, observed that Budget 2026–27 demonstrates clear intent and incremental progress, prompting cautious optimism among panelists. However, she reiterated that structural gaps remain, particularly in financing design, primary care, nutrition, mental health, and protection of vulnerable groups. Echoing several speakers, she stressed that outcomes will depend less on headline allocations and more on execution, convergence across sectors, and district-level capacity building. She concluded by reaffirming the need to view health as economic infrastructure rather than welfare expenditure, thanking all panelists for an enriching and thoughtful discussion.
The session concluded with a formal vote of thanks on behalf of the IMPRI Center for Human Dignity and Development, expressing gratitude to the Chair, panelists, and participants for their engagement, and inviting attendees to subsequent thematic sessions under the IMPRI Union Budget deliberation series.
Acknowledgement: Written by Paridhi Jain Research Intern at IMPRI.
