As Finance Minister Nirmala Sitharaman prepares to present the Union Budget for 2025 on February 1, the healthcare sector stands at a critical juncture, with growing demands and expectations from the public and experts alike. As India grapples with an increasing health burden from both non-communicable diseases (NCDs) and infectious illnesses, there is a strong call to prioritise certain crucial areas in the upcoming budget. Among these, providing cheaper cancer drugs and bolstering rural healthcare have emerged as pivotal issues that could significantly transform the country’s healthcare landscape.
Growing Health Crisis and Budgetary Allocation
The health sector in India is facing a rising tide of challenges, with diseases such as cancer, diabetes, cardiovascular issues, and mental health conditions becoming more prevalent. The burden on the healthcare infrastructure is intensifying, and the existing resources are proving inadequate to address these concerns effectively. The government’s current allocation to the health sector stands at a mere 2% of the total Union Budget, a figure that many experts believe is insufficient given the escalating health needs of the country.
In 2024-25, the Union Health Ministry received an allocation of Rs 90,658.63 crore, marking a 12.59% increase from the previous year. However, experts argue that India needs to invest more in its healthcare system. Sandeep Guduru, CEO of the Asian Institute of Nephrology and Urology, advocates for a rise in healthcare spending to at least 2.5-3% of the GDP. Such an increase could help the country transition towards preventive medicine and ease the pressure on the public health system. This rise in funding should be focused on tackling the twin challenges of cancer treatment and rural healthcare, both of which need urgent attention.
Prioritising Affordable Cancer Care
Cancer remains one of the leading causes of death in India, with rising cases across various types of cancer. The cost of cancer treatment, including surgery, chemotherapy, and targeted therapies, is often prohibitive for a large portion of the population. The financial burden is further compounded by the lack of affordable and accessible healthcare facilities, especially in rural areas. As the government begins to shape the healthcare provisions for Budget 2025, experts are urging a concerted effort to reduce the costs of cancer drugs and make them accessible to all.
In February 2024, the government made a significant move by slashing the Goods and Services Tax (GST) on three major cancer drugs: Trastuzumab Deruxtecan, Osimertinib, and Durvalumab. This was a positive step, but experts argue that this reduction should extend further to other essential cancer medications, including targeted therapy drugs and advanced cancer treatment equipment, such as radiotherapy machines and robotics. The customs duties on these essential tools often hover around 37%, a figure that substantially raises the cost of cancer care in India.
Dr. Suneeta Reddy, Managing Director of Apollo Hospitals, has called for a continued focus on reducing customs duties on such essential treatments. Lowering the cost of cancer care would make life-saving medications more affordable and accessible, especially to the underprivileged sections of society who cannot afford expensive treatments. A rationalisation of these duties could play a crucial role in reducing the economic burden of cancer care and improving survival rates in India.
Enhancing Rural Healthcare
The disparity in healthcare services between urban and rural India is stark. Rural areas continue to face inadequate healthcare infrastructure, lack of trained medical professionals, and poor access to advanced medical technologies. This has created an alarming situation where millions of rural residents are deprived of timely and quality healthcare, resulting in poor health outcomes.
Experts have called for a dedicated focus on rural healthcare in Budget 2025. This includes increased allocations for telemedicine, mobile health clinics, and AI-driven diagnostics that can bridge the healthcare gap between urban and rural areas. Telemedicine, in particular, has the potential to revolutionise healthcare delivery in remote areas, where access to medical specialists is often limited. By increasing investments in telemedicine infrastructure, the government could ensure that quality healthcare reaches even the most remote corners of the country.
Moreover, Dr. Dharminder Nagar, Managing Director of Paras Health, advocates for increased investments in electronic health records and public-private partnerships to enhance the accessibility and affordability of healthcare in rural regions. This would not only improve healthcare delivery but also streamline the management of patient data, making it easier to track health outcomes and intervene early in the case of diseases.
Mental Health Support and Government-Driven Programs
Mental health is another area that demands urgent attention, particularly in rural India, where the stigma around mental illness is still prevalent, and adequate mental health services are scarce. The government’s role in addressing this issue through public health programs cannot be overstated. Experts argue that investing in mental health initiatives, especially in rural areas, could reduce the distress caused by mental health issues and farmer suicides. Dr. Rajeev Boudhankar, Medical Director of Holy Family Hospital in Mumbai, suggests that the government should implement mental health programs as part of the National Health Program, reaching out to rural populations who are often overlooked in mental health care.
Improving Reimbursement Rates for Medical Procedures
Another key issue that needs attention is the reimbursement rates for medical procedures under schemes like the Central Government Health Scheme (CGHS) and the Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS). Many medical procedures, such as coronary artery bypass grafting (CABG) and appendectomies, are reimbursed at rates far lower than their actual cost, making it difficult for hospitals to provide quality care within these schemes. Dr. V P Chandrasekaran, Chief Operating Officer at SRM Global Hospitals, points out that current reimbursement rates fail to cover even the variable costs of medical procedures, let alone the overheads like maintenance, infrastructure, and staff salaries.
To ensure that healthcare providers can continue offering high-quality services, especially under government schemes, Dr. Chandrasekaran recommends revising the reimbursement rates to reflect the actual cost of medical procedures. This would not only help improve the quality of care but also make these treatments more accessible to the general public.
Leveraging AI and Genomics in Healthcare
As India moves towards a more modern and technology-driven healthcare system, experts believe that genomic testing and AI-driven diagnostics can play a transformative role in the country’s healthcare future. Surajit Chakrabartty, CFO of MedGenome, highlights the potential of genomics to drive early disease detection and personalised medicine. By integrating genomic testing into routine healthcare, the country could detect diseases early, provide targeted treatments, and improve patient outcomes. Similarly, AI-powered diagnostics can help bridge the gap in healthcare access, especially in underserved areas.
As the Union Budget 2025 is set to be announced, it is clear that the government must prioritise healthcare as a critical sector. By focusing on reducing the cost of cancer drugs, improving rural healthcare access, enhancing mental health support, and modernising the healthcare system through AI and genomics, India can ensure that its growing population receives the healthcare it needs. With adequate investments and thoughtful policy changes, India can build a healthcare system that is equitable, accessible, and capable of addressing the diverse needs of its people.
