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2023 Health Budget Highlights - Key Announcements
Feb 24, 2023

Union Budget 2023: Health Sector Highlights – Key Announcements

The recently announced Union Budget for the year 2023-2024 was the last budget before the general elections in 2024. There were high expectations, especially from the healthcare sector that was looking for the financial booster dose that was required to revive it. The budget matched expectations for some and for others, the budget was shorter than expectations. Health insurance policyholders were among them who were hopeful of tax benefits. Here are the key highlights of the health sector which were announced in the Union Budget.

Healthcare Sector Benefits

These are some of the key benefits for the healthcare sector which were announced in the Union Budget 2023-2024 by the honourable Finance Minister of India, Nirmala Sitharaman:
  1. Strengthening Primary Healthcare

One of the major announcements in the budget is the allocation of funds for the establishment of Health and Wellness centres across the country. These centres will be equipped with the necessary infrastructure and manpower to provide basic healthcare services to the population, including screening for non-communicable diseases, maternal and child health services, and preventive care. This is a welcome move as strengthening primary healthcare is essential for ensuring universal health coverage.
  1. Boosting Digital Health

The budget has also allocated funds for the implementation of the National Digital Health Mission (NDHM), which aims to create a digital health infrastructure that can support the delivery of healthcare services in a seamless and efficient manner. The NDHM will enable the creation of digital health records for all individuals, as well as facilitate the exchange of health information between different healthcare providers. This will not only improve the quality of care but also help in reducing healthcare costs.
  1. Focus on Mental Health

The budget has recognized the importance of mental health and has announced several measures to address the issue. This includes the establishment of a National Mental Health Program, which will provide comprehensive mental healthcare services to the population. Additionally, funds have been allocated for the strengthening of the existing mental health infrastructure, including the establishment of new mental health facilities and the training of mental health professionals.
  1. Strengthening Healthcare Infrastructure

The budget has allocated funds for the creation of new healthcare infrastructure, including hospitals, medical colleges, and research institutions. This is essential for improving access to specialized healthcare services, particularly in underserved areas. Additionally, the budget has announced measures to upgrade the existing healthcare infrastructure, including the provision of funds for the maintenance and repair of government hospitals and healthcare facilities.
  1. Increasing the Health Workforce

To address the shortage of healthcare professionals in the country, the budget has announced measures to increase the number of healthcare workers. This includes the establishment of new medical colleges and the expansion of existing ones, as well as the provision of incentives for healthcare professionals working in underserved areas. Additionally, the budget has allocated funds for the training of healthcare workers, including nurses, paramedics, and allied health professionals.

Benefits for Health Insurance Policyholders

There were many expectations from policyholders in regard to the tax deduction that they enjoy on premium payments towards their policy. The current tax deduction that you enjoy on premium payments is Rs.25,000. If you are a senior citizen, it increases to Rs.50,000. Many were hoping to see the limit increased more than the existing one. Especially since many in India still do not own a policy or are unaware of the benefits of health insurance coverage in India. ** In such a situation, the tax deduction could have been increased under Section 80D of the Income Tax Act. Additionally, there is a GST of 18% on the premiums. These factors could further deter people from buying the policy in the first place. And those who already own one might reconsider surrendering their existing policy due to the lower tax benefit and the increasing cost of health insurance. Even if these expectations were not met in this year’s budget, hopefully, they can be done in the next budget.


Overall, the measures announced in the Union Budget for 2023-24 are expected to bring about significant improvements in the health sector in India. By strengthening the primary healthcare system, boosting digital health, focusing on mental health, improving healthcare infrastructure, and increasing the health workforce, the government is taking steps towards achieving the goal of universal health coverage. However, the government can still make efforts to give more benefits towards those who are investing in health insurance plans for family. If you are looking to purchase a plan for yourself or your loved ones, you can use the calculator online to get a quote for the policy you are looking for. The quotes presented are based on the data you enter in the calculator.   ** Tax benefits are subject to change in prevalent tax laws.   Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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