Health & SocialPriority2026-02-01

Union Budget 2026-27 Health Sector Announcements

In News

What Happened

In the Union Budget 2026-27, India's health sector received its highest-ever allocation, crossing the Rs 1 lakh crore mark for the first time. The Finance Minister launched the Rs 10,000 crore Biopharma SHAKTI scheme to boost the production of complex biological medicines. The budget also announced the creation of NIMHANS-2 in North India and the training of 1 lakh allied health professionals.

Why It Matters

This budget shifts India's pharmaceutical focus from being the world's supplier of low-cost generic drugs to becoming a hub for high-value, cutting-edge biologics and biosimilars. It also directly tackles the rising burden of non-communicable diseases and a growing national mental health crisis, aiming to make advanced healthcare and trauma support more accessible and affordable across regions.

Background

History & Context

Historically, India has been the 'pharmacy of the world', supplying 20% of global generic medicines by volume. However, the disease burden is shifting towards non-communicable diseases (NCDs) like cancer and autoimmune disorders, which require complex biological drugs. The National Health Policy 2017 set a target of raising public health expenditure to 2.5% of GDP by 2025, which remains unmet despite steady increases. Furthermore, the 2015-16 National Mental Health Survey by NIMHANS highlighted that 15% of Indian adults need mental health intervention, yet tertiary psychiatric care has been concentrated in the South. This necessitated a shift from incremental fixes to strategic national infrastructure.

What Changed

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Allocation Milestone: Health budget increased by nearly 10% to Rs 1,06,530 crore, crossing the historic Rs 1 lakh crore threshold for the first time.
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Biopharma SHAKTI Launch: A Rs 10,000 crore initiative launched over 5 years to boost domestic manufacturing of biologics and biosimilars using non-animal methodologies (NAMs).
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Mental Health Expansion: NIMHANS-2 announced for North India, and institutions in Ranchi (CIP) and Tezpur (LGBRIMH) upgraded to Regional Apex Institutions.
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Clinical and Academic Upgrades: Establishment of 3 new NIPERs, upgradation of 7 existing ones, and creation of a network of over 1,000 accredited clinical trial sites.
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Customs Duty Relief: Basic Customs Duty fully waived on 17 essential cancer drugs and medicines/food for 7 rare diseases to reduce Out-of-Pocket Expenditure.
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Workforce Target: A target set to train 1 lakh Allied Health Professionals (AHPs) in disciplines like optometry, alongside 1.5 lakh geriatric caregivers for the 'Silver Economy'.

What Did NOT Change

Despite the absolute numerical milestone of Rs 1 lakh crore, the health budget still constitutes roughly 1.96% of total government expenditure and hovers around 0.3% of the GDP. This leaves the National Health Policy 2017 target of 2.5% of GDP largely unfulfilled. Furthermore, public health activists noted a continued lack of proportional funding for primary healthcare infrastructure compared to tertiary care and pharmaceutical production.

Prelims Angle

NCERT Connection

This heavily relates to Class 12 Biology, Chapter 12: 'Biotechnology and its Applications', specifically the section on 'Biotechnological Applications in Medicine'. The chapter explains how recombinant DNA technology is used to produce safe and effective therapeutic drugs (biologics) like genetically engineered insulin, as opposed to chemical synthesis. The Biopharma SHAKTI scheme is the real-world economic policy designed to scale up exactly this segment of modern biotechnology, pushing India to manufacture these complex biosimilars domestically.

Common Misconceptions

✗ The Biopharma SHAKTI scheme focuses on boosting generic chemical drugs and Ayurvedic medicines.

✓ It strictly targets the production of high-value, complex biologics and biosimilars using advanced techniques like organoids.

India's historic global dominance in generic chemical drugs and concurrent budget boosts for AYUSH lead students to mix up these distinct pharmaceutical categories.

✗ India has finally met its National Health Policy spending target by crossing Rs 1 lakh crore in the 2026-27 budget.

✓ The allocation represents barely 1.96% of the total budget expenditure and roughly 0.3% of GDP, far below the 2017 policy target of 2.5% of GDP.

The headline-grabbing 'record high' and '1 lakh crore' milestone creates an illusion of massive macroeconomic proportion.

Practice Questions

Q1

How Many Correct

Consider the following statements regarding the health sector announcements in the Union Budget 2026-27: 1. The Biopharma SHAKTI scheme aims to transition India into a global hub for generic chemical drug manufacturing. 2. The budget announced the establishment of NIMHANS-2 in North India to address the lack of national mental healthcare institutes in the region. 3. Basic Customs Duty has been completely waived on all life-saving drugs imported for communicable diseases. How many of the statements given above are correct?

Q2

Match the Following

Match the following budgetary initiatives/institutions (List I) with their primary objective or characteristic (List II) as per Budget 2026-27: List I: A. Biopharma SHAKTI B. NIMHANS-2 C. Silver Economy Care D. Regional Apex Mental Health Institutes List II: 1. Upgrading existing facilities in Ranchi and Tezpur 2. Training 1.5 lakh caregivers for geriatric and wellness care 3. Development of complex biologics and biosimilars 4. New specialized infrastructure for North India Select the correct code:

Q3

Assertion & Reason

Assertion (A): The Union Budget 2026-27 marks a strategic shift in India's pharmaceutical policy by heavily funding the Biopharma SHAKTI scheme. Reason (R): India's disease burden is increasingly shifting toward non-communicable diseases (NCDs) like cancer and autoimmune disorders, which are best treated using complex biological medicines. Select the correct answer from the codes given below:

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