Add Zee Business as a Preferred Source
Union Budget 2025: Healthcare sector gets Rs 98,311 crore; pharma stocks in focus
Budget 2025 boosts healthcare with Rs 98,311 crore allocation, expanding medical education and cancer care while easing drug costs. Pharma stocks gain momentum amid duty cuts and PLI incentives.
)
(Image: File Photo/ZeeBiz)
Written By: Angana Pal Chinya
Updated: Sat, Feb 01, 2025
01:22 PM IST
01:22 PM IST
ZeeBiz WebDesk
The Union Budget 2025 has allocated Rs 98,311 crore for healthcare, marking a modest increase from Rs 90,959 crore in FY24. This budget prioritizes medical infrastructure, health insurance, and pharmaceutical advancements while also aiming to expand medical education. The sector's increased funding has brought healthcare and pharma stocks into the spotlight, with key policy changes expected to influence market dynamics.
Higher allocation for healthcare initiatives
Finance Minister Nirmala Sitharaman announced key investments in India's healthcare system, including:
- Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY): Rs 9,406 crore allocated to expand health insurance coverage.
- Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM): Rs 4,200 crore set aside to strengthen infrastructure.
- Cancer care expansion: The government plans to establish 200 cancer centres in 2025-26 and set up daycare cancer centres in district hospitals over three years.
- Medical education boost: 10,000 additional medical seats to be added in the next year, contributing to a total of 75,000 new seats in five years. Over the past decade, undergraduate and postgraduate medical seats have increased by 130%.
Pharma industry benefits from policy support
The budget includes Rs 2,445 crore for the Production Linked Incentive (PLI) scheme in the pharmaceutical sector, up from Rs 2,143 crore last year. This move aims to boost domestic drug manufacturing and reduce import dependency.
TRENDING NOW
In a major relief for patients, the government has included six life-saving drugs in the concessional 5 per cent duty slab, reducing costs. Additionally, customs duty exemptions have been extended to 36 essential drugs, particularly benefiting cancer patients.
Stock market impact: Pharma sector in focus
Following the budget announcement, pharmaceutical stocks are expected to remain in focus. Companies such as Lupin, Cipla, Abbott India, Ajanta Pharma, Alkem Laboratories, Biocon, and AstraZeneca are likely to see positive momentum due to tariff reductions on critical medicines. The removal of import duties on key drugs will make treatments more affordable and increase domestic sales for these firms.
However, while the increase in budget allocation is a positive step, investors will closely monitor execution, particularly in expanding medical infrastructure and drug accessibility. With India positioning itself as a global medical tourism hub under the 'Heal in India' initiative, pharma and healthcare firms could see long-term growth opportunities.
The bigger picture
The Union Budget 2025 reinforces the government's commitment to improving healthcare infrastructure, expanding medical education, and supporting the pharmaceutical industry. The increased allocation, coupled with policy measures such as concessional duty slabs and PLI schemes, is expected to drive industry growth while making critical healthcare services more accessible and affordable for the public.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
Angana Pal Chinya
Angana Pal Chinya
RECOMMENDED STORIES
)
)
)
)
)
)
)
)
)
)
)
)
)
RELATED NEWS
UP govt tables Rs 24,496.98 crore supplementary budget for 2025–26; power, health, cities in focus — 7 key points to know
PM Modi highlights India-Ethiopia strategic partnership focused on youth, innovation and inclusive growth
US drug policy shift? Trump administration considers easing marijuana classification — Know what it means
Foreign investors reduce energy, consumer staples holdings but boost bets on transportation, telecom and healthcare
Eli Lilly to invest over $1 billion in Hyderabad, expand manufacturing and quality operations
