Keep the National Health Policy Promise: Double Union Budget for Health in 2026!
Allocate 5% of Union Budget for Health! Double allocations to expand the National Health Mission, upgrade health services! Provide ASHAs and Health workers dignified wages!
The 2017 National Health Policy had committed to “increase health expenditure by Government as a percentage of GDP from the existing 1.15% to 2.5 % by 2025.” While 2025 is now over, this basic goal is nowhere near realisation, especially since the Union government has not upscaled its health budgets are required over the last decade. Government expenditure on health in India remains at very inadequate levels, less than 1.5% of GDP in 2025-26. This budget deficit is having very negative impacts on people’s access to basic public health services, which remain underdeveloped, understaffed and without adequate medicines and infrastructure.
With deepest concern the Jan Swasthya Abhiyan notes that Union Government spending on health has continuously declined post COVID pandemic in real terms, which has made it impossible for the NHP 2017 goal to be realised in 2025. On behalf of the people of India who deserve essential health services, now Jan Swasthya Abhiyan demands that in the coming 2026-27 Union Budget the allocation for health should be doubled, keeping in view the NHP goal. Increasing from the current very low level of just 2% of the total budget, the Union health budget should be expanded to at least 5% of the overall Union Budget within next two years.
Spending by the Union government on health continues to be strangulated
Public spending on health in India continues to be abysmally low compared to many countries. For instance, Bhutan’s per capita spending on health was 2.5 times more than India’s, while Sri Lanka’s was three times in 2021. All the other BRICS nations spent per person 14-15 times more on health than India does. Thailand, Malaysia spend at least ten times more per capita on health than India.
During the COVID pandemic years public spending on health as % of GDP had increased somewhat, with much of the rise due to the States and to lesser extent by the Union government. The States have sustained the increase post-COVID as well. Given the resource constraints they face, this is commendable. As per Reserve Bank of India (RBI) data allocation on Health and Family welfare by all States and Union Territories have increased from 0.67% in 2017-18 to 1.1 of GDP in 2025-26 BE. Share of health in overall state budgets have increased from 5% to 5.6% during this period.
In contrast, the Union government’s spending on health as a percentage of GDP, which increased moderately during the pandemic, has decreased post-pandemic. Union government allocation on health in 2025-26 Union Budget was 4.7% less than what was actually spent in 2020-21, when we take into account the effect of increasing prices. This means, the care that could be provided in 2020-21 cannot be ensured now, given that allocations have declined while prices have skyrocketed.
This also means that as percent of GDP, Union government allocation to health has declined drastically from 0.37% (2020-21 Actual Expenditure) to 0.29% (2025-26 Budget Expenditure). It seems that even modestly higher priority accorded to the health sector in the Union Budget during COVID, has also been slashed after the immediate emergency passed. Share of health budget in the total Union Government budget has declined from 2.26% to 2.05% in this period.
The NHP also proposed that Union Government share should be 40% of total public spending. This essentially means Union Government spending should increase from current level of 0.29% to 1% of GDP. Which required increasing allocations by at least three times. Union government should commit to reach 1% of GDP target in coming two years.
End the resource deficit, upscale the National Health Mission
If we dissect the budget a bit and try to identify which schemes and programs have received cuts and which have seen considerable increase, we can understand the real health sector priorities of Union Government. Schemes which contribute to strengthening the public system and protecting the health of most vulnerable sections of the society, like the National Health Mission (NHM), Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), schemes on nutrition, health research have received severe cuts- despite their doing good work during hard times.
Launched in 2005, the NHM has been a crucial intervention by the Union government to improve health services in rural and urban areas. But during the last seven years expenditure on this key scheme has mostly remained stagnant or has come down. Between FY14 and FY19, the spending on NHM grew at 7.4% on average, largely due to a sudden jump in FY18. However during the second tenure of the NDA government, spending on NHM has actually declined in real terms by 5.5% on average.
Keeping in view the central importance of this programme, NHM allocation should be at least doubled in the coming Union budget. This will be in line with the National Health Policy 2017 budget goal, and would support the upgradation of Health and Wellness Centres, inclusion of NCD services, much needed expansion of urban public health services, and also dealing with profound threats of climate change on health vulnerability of people. Increased allocation to NHM should ensure improved pay scales and regularisation of contractual health staff and ASHAs; guaranteed availability of public health services and medicines at all levels.
Starving the public sector, pampering private partnerships
The overall priority and budgets for health sector are being further slashed by the Union Government. Yet even within the low allocations, instead of strengthening the public health system, it continues to promote private sector partnerships and insurance-based models of healthcare delivery, such as the Pradhan Mantri Jan Arogya Yojana (PMJAY). PMJAY continues to get substantial amount of budget each year, even when the large body of evidence shows the inefficacy of such insurance-based models across the globe, evidence from the ground which continues to show that benefits from the scheme are limited, and with huge number of irregularities as pointed out by the CAG audit. The Central Pharma and Vaccine PSUs are also being systematically undermined and starving from funds and being pushed to irrelevance.
Denying fair share of health budget to state governments
The decline in the share of resources being transferred by the Union Health Ministry to the State governments is extremely concerning. In 2014-15, three-fourths (75.9%) of the Union spending on health was transferred to the States. However within the first three years of the NDA government, this share came down to just around half (53.4%) and has further declined consistently to reach a dangerously low level of just 43% in 2024-25 (Budget Estimates) – which is completely insufficient to maintain basic health services. We need to keep in mind that State governments bear the main costs of providing healthcare to people across India, and need to be adequately resourced by the Union government. The trend reflects hyper-centralisation of financial resources on health, although health services largely fall within the domain of States.
Health Cess used to replace main health budget allocations?
In 2018-2019, Health and Education Cess (HEC) was introduced as 4% of the income. The role of cess should have been to top up and expand existing government spending on health, to take care of the health of the poor and rural families. . However, the thousands of crores collected yearly as health and education cess has not been to expand the health budget, instead it is being used to compensate for the continued slashes in the main health budget. For instance, for the FY 2023-24 collection of HEC was INR 71,180 crores, of which one fourth goes to health, which comes to around INR 17,795 crores. If we keep aside this Cess amount, we note that Union Budget allocation on health has actually declined by 22.5% in real terms between 2020-21 and 2023-24. This amounts to the Union government further escaping from its basic responsibilities for people’s health.
In the context of above anti-people trends related to health budgets, Jan Swasthya Abhiyan demands the following:
- Union Government allocations towards health in the 2026-27 Budget should be doubled to meet
the goal of NHP – 2017!
- Union government should increase its spending on health to at least 5% of the total Union
- budget in next two years!
- Allocations to NHM should be doubled, to support strengthening and expansion of health services, improvement of Health and Wellness Centres, justice to health staff including ASHAs and contractual workers!
- Health Budget transferred to states should be at least two third given that the states share two third of total burden of expenditure! There should greater proportion of untied or flexible funding for states to be able to plan and execute their priorities on health.
- Meet the NHP target of 2.5% of GDP at earliest, with Union Govt share at least 1% of GDP as its required share within two years. Public spending on health should be further increased to 3.5% of GDP by 2030.
- Collection of Health Cess amount should be used to complement resources devoted to health, rather than substituting the main budgetary allocations
- Roll back PMJAY and devolve more resources to strengthen publicly provided healthcare!
- Allocate resources to immediately revamping all Central government pharmaceuticals (IDPL, Hindustan Antibiotics) and the Vaccine Factories. Also the government should fund establishing factories for the production of APIs.
- The Central government should promote R&D, regulate prices of drugs and devices, develop clinical protocols and set up institutions of academic and clinical excellence.
JSA calls upon health and social activists across India to raise these demands, and to generate wide public awareness around these issues. Various Members of Parliament need to actively debate for such major increase in Union health budget, during the coming Budget session. State governments must demand a higher share of Union health spending, while also maintaining an upward curve of their own state health spending, to ensure adequate resources which would enable all sections of people to access essential health services as a basic right.