To strengthen India’s healthcare system, Union Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026-27 in Parliament on Sunday, announced a substantial enhancement in the allocation for the Health & Family Welfare Ministry to Rs 1,06,530.42 crore, reflecting an increase of nearly 10 per cent over the Revised Estimates of FY 2025–26.
The government has approved 22 new AIIMS, upgradation of premier mental health institutions, setting up of Allied Health Professional Institutes, establishment of new medical colleges, a significant boost to medical research and innovation, and a phased plan for the expansion and strengthening of allied and healthcare professionals’ education.
To strengthen mental healthcare services, the Budget provides for the upgradation of premier mental health institutions at Ranchi and Tezpur, along with the establishment of a NIMHANS in North India, significantly expanding access to advanced mental health care, training, and research facilities.
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The Budget also proposes the establishment of Emergency and Trauma Care Centres in every district hospital, ensuring affordable and round-the-clock (24×7) access to critical emergency medical services for citizens across the country. It also provides for a substantial increase in MBBS, postgraduate, super-specialty, and nursing seats, aimed at strengthening teaching, learning, and clinical training capacities, while promoting cutting-edge research and innovation in advanced biomedical fields, including artificial intelligence.
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Recognising the growing healthcare demands arising from an ageing population, the rising burden of non-communicable diseases, and increasing global demand for skilled healthcare professionals, the government has proposed a phased plan outlay of Rs 980 crore over three years for the expansion and strengthening of allied and healthcare professionals’ education.
Under this initiative, Allied Health Professional Institutes in 10 key disciplines will be set up and upgraded to create nearly one lakh skilled professionals over the next five years, through public and private sector participation. Additionally, a focused programme will train 1.5 lakh geriatric caregivers, addressing the rapidly rising long-term care needs of India’s elderly population. These measures will enhance diagnostics, preventive, rehabilitative, and public health services while positioning India as a global hub for skilled allied healthcare professionals.
Further, the allocation for Human Resources for Health and Medical Education, including the establishment of new medical colleges, upgradation of undergraduate and postgraduate seats, and augmentation of nursing education, has been increased to Rs 1,725 crore to strengthen healthcare workforce capacity.
The Union Budget 2026–27 also provides a significant boost to medical research and innovation under the Department of Health Research. The allocation for the Indian Council of Medical Research (ICMR), New Delhi has been enhanced to Rs 4,000 crore, reflecting an increase of Rs 850 crore.
Under the Pradhan Mantri Swasthya Suraksha Yojana, 22 new AIIMS have been approved, of which 18 are fully functional with teaching, research, OPD/IPD, emergency, and diagnostic services, while the rest are under construction.
Significantly, 15 of these AIIMS were approved after 2014, and 12 have been operationalised during this period, dramatically expanding access to world-class tertiary care in underserved and remote regions. Since 2014, MBBS and nursing seats have more than doubled, and postgraduate and super-speciality seats have increased by 100 per cent.
In the last three years alone, over 3 crore OPD patients and 15 lakh IPD patients have received care, underscoring the transformative impact of these institutions in expanding world-class tertiary healthcare to underserved regions.
Recognising the growing healthcare demands arising from an ageing population, the rising burden of non-communicable diseases (NCDs), and increasing global demand for skilled healthcare professionals, the Government has proposed a phased plan outlay of Rs 980 crore over three years for the expansion and strengthening of allied and healthcare professionals’ education.
India as a global hub for Medical Value Tourism
To promote India as a preferred destination for medical tourism services, the government has proposed to support states in establishing five Regional Medical Hubs, in partnership with the private sector. These hubs will function as integrated healthcare complexes, combining medical services, education and research facilities under one umbrella.
The proposed Medical Hubs will house AYUSH Centres, Medical Value Tourism Facilitation Centres, and advanced infrastructure for diagnostics, post-treatment care and rehabilitation. Besides enhancing patient experience for international and domestic visitors, these hubs are expected to generate diverse employment opportunities for healthcare professionals, including doctors and Allied Health Professionals (AHPs).
To further strengthen the AYUSH sector and meet global demand, the Union Budget proposed setting up of three new All India Institutes of Ayurveda to expand quality education, clinical care and research, upgradation of AYUSH pharmacies and drug testing laboratories to ensure higher standards of quality, certification and availability of skilled manpower, and upgradation of the WHO Global Traditional Medicine Centre, Jamnagar, to bolster evidence-based research, training and global awareness in traditional medicine systems.
Divyangjan Kaushal Yojana
In alignment with the vision of Sabka Sath, Sabka Vikas, and to ensure that every family, community, region and sector has access to resources, amenities and opportunities for meaningful participation, the Finance Minister announced Divyangjan Kaushal Yojana in which IT, AVGC sectors, Hospitality and Food and Beverages sectors offer task-oriented and process-driven roles, which are suitable for Divyangjans. This will ensure dignified livelihood opportunities through industry-relevant and customized training specific to each divyang group.
She also announced Divyang Sahara Yojana, in which the budget proposes to support the Artificial Limbs Manufacturing Corporation of India (ALIMCO) to scale up production of assistive devices, invest in R&D and AI integration, (ii) strengthen PM Divyasha Kendras and support setting up of Assistive Technology Marts as modern retail-style centres where Divyangjans and senior citizens can see, try and purchase assistive products.
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