Budget 2026: Doctors, hospitals lay out India's healthcare spending wishlist

As Union Budget 2026 approaches, healthcare leaders spell out priorities to curb preventable disease, cut out-of-pocket costs, and strengthen India's health system at scale

4:08 PM

The non-life market faces near-term challenges

Swiss Re Market Head for India Amitabha Ray said India is a bright spot for insurance growth in the mid-term as opportunities emerge, especially in health and motor insurance.

"We are set to benefit from forward-looking regulatory reform, digital innovation and a disciplined but attractive product mix for consumers," Ray said.

Swiss Re Group is one of the world's leading providers of reinsurance, insurance and other forms of insurance-based risk transfer.

4:07 PM

This is a strong rebound from slower growth of only 3.1 per cent in 2025, as the Indian insurance market adjusted to new regulations.

Reforms by the Insurance Regulatory and Development Authority of India (IRDAI) and broader policy changes by the government are bringing more transparency and reshaping the industry structure for the next phase of accelerated growth.

Key measures include a higher foreign direct investment (FDI) limit in the insurance sector, modernisation of distribution and goods and services tax (GST) reforms. These changes can bring new capital, widen access to insurance and spur insurance demand.

For life insurance, where India is the second-largest life insurance market amongst the emerging economies, annual growth of 6.8 per cent over the next 5 years is expected to come from widening distribution networks, increasing demand for retirement products and credit growth.

4:05 PM

Operational challenges for the forex industry

avad said higher TCS has also created operational challenges for forex companies and authorised dealers.  At the transaction level, firms must track remittances customer-wise across banks, manage frequent rate changes and exemptions by purpose, and handle real-time PAN validation, TCS calculation, reporting and reconciliation,” he said. “This has increased processing complexity and turnaround time.”

4:04 PM

Calls to exclude education and medical remittances from TCS

Both Kavad and Arora argued that education and medical remittances should be treated separately under TCS rules.

 “These payments are made out of necessity rather than choice, and imposing high upfront TCS creates avoidable liquidity stress for families and patients,” Kavad said. “PAN-based reporting, bank checks and income-tax disclosures already provide sufficient audit trails.”

 He said removing TCS for these categories would reduce friction and keep transactions within formal channels.

4:04 PM

Education versus travel-related remittances

Kavad said the higher TCS rate has affected education and travel-linked forex demand differently.

Travel-related forex demand has softened noticeably, as the 20% TCS on most non-essential remittances has increased the upfront cost and created a liquidity squeeze,” he said. “In contrast, education-linked forex demand has proven more resilient, as study-abroad expenses are largely non-discretionary and benefited from policy relief.”

4:03 PM

Impact on overseas education payments

Saurabh Arora, founder and chief executive officer of University Living, said TCS has changed how families plan education payments.“The 16% decline in education-related outward remittances under LRS from $3.48 billion in FY 2024 to about $2.92 billion in FY 2025 reflects multiple factors,” Arora said. “Families spread tuition and settlement payments across the year and became more conscious of limits, timing and documentation.”

He also pointed to slower admission cycles in the US, UK and Canada, along with currency movements, as factors that affected household planning.

4:03 PM

Budget 2026 expectations

Pavan Kavad, managing director at Prithvi Exchange, said TCS under the Liberalised Remittance Scheme has reduced formal outward remittances rather than pushing people towards informal channels.

“RBI data indicates a clear moderation in LRS outflows after the sharp increase in TCS, particularly the 20% levy on most non-essential remittances, as the upfront liquidity burden has discouraged or delayed discretionary spending such as travel and overseas investments,” Kavad said.

4:01 PM

What changes did Budget 2025 bring?

Earlier, remittances above ₹7 lakh in a financial year attracted TCS. Budget 2025 raised this threshold to ₹10 lakh, offering some relief to families managing overseas education or living costs. The Budget also exempted education funded through loans from TCS.

4:00 PM

What is TCS on foreign remittance?

Tax Collected at Source is collected by banks or authorised dealers when an individual sends money abroad under the Liberalised Remittance Scheme. It applies to a range of overseas payments, including:  Higher education

3:58 PM

Long term vision

While these reforms are necessary and could be implemented in the short term, India should also think ambitiously about its long-term digital infrastructure strategy. Other countries are exploring new concepts such as ‘data embassies’ that host sovereign data under diplomatic protections and integrated ‘data cities’ that connect data centres, cloud service providers, AI labs, and fibre infrastructure under a unified policy framework. For India, these initiatives could position the country as one that offers trusted future-ready digital ecosystems. The growth in the data centre sector, with large and long-term capex, demands a predictable, investor-friendly tax and regulatory framework spanning the entire lifecycle of data centres. Union Budget 2026 can address the above asks of the sector, allowing players to plan capacities and strengthening India’s position as the favoured destination for such investments. These changes can signal India’s willingness to provide a stable and predictable regime and will determine whether India is able to capitalise its full potential to become a global data hub.

3:57 PM

Input tax credit for establishment costs

Under the Goods and Services Tax (GST), a recent clarification that data hosting and infrastructure support services are exports, allowing for refunds of unutilised GST credits, has brought about welcome changes. However, denial of Input Tax Credit (ITC) on construction, particularly for hyperscale data centres, and divergent views on the taxability of 99-year leasehold rights and the ITC for lease premiums and rents continue to create uncertainty and add to set-up costs. This area also requires clarity to allow players to make investments with confidence. By holistically addressing the above issues, the government can establish a predictable and trusted data centre ecosystem. India has already recognised data centres as infrastructure and strengthened its data protection laws. Introduction of measures to provide tax certainty via Budget 2026 could be a turning point to take the next big leap.

3:57 PM

Reasonable safe harbours

Regarding transfer pricing, outcomes depend on operating models and the functional, asset, and risk profiles of Indian entities. Export-oriented data centre operations might fall under safe harbour rules for IT-enabled services, but this is not always clear, especially for asset-heavy operations. Clear guidance on safe harbours and the treatment of third-party costs (power, connectivity, maintenance) is needed to reduce disputes.

3:56 PM

The permanent establishment ambiguity

The foremost issue that has been in focus for a while and warrants amendments to provide tax certainty is the Permanent Establishment (PE) challenge. Most hyperscale data centre business models entail overseas entities using Indian data centres to provide cloud services to users. In recent times, doubts have been raised whether such models can give rise to a taxable presence or PE for the overseas entities in India and hence trigger taxability where the rates and amounts are also unclear. To address this ambiguity, there is a need for clear rules that confirm that such data centre operations of international players do not lead to a PE in India. Any such changes should apply to existing and new investments in order to provide a clear framework for all players, existing as well as new.

3:56 PM

The digital opportunity

Currently, India’s installed capacity is roughly 1.5 GW, which is projected to grow and reach around 14 GW by 2035. This growth, which would require more than $70 billion in investments, is a once-in-a-generation opportunity. India’s strengths lie in its competitive operating cost, large scale, land availability, and skilled workforce. This is further supported by national and state-level policies and a robust data protection framework, which builds trust among global investors and users. These strengths were the foundation of the Indian digital journey till now.

3:55 PM

Majority favour taxing crypto like other financial assets

Furthermore, a majority of respondents favour taxing crypto in line with other financial assets like equities or mutual funds. “This points to a broader desire to integrate crypto into India’s existing financial and tax systems, rather than treating it as an exceptional or isolated asset class,” the report said. Beyond taxation, the survey also highlighted concerns over the regulatory landscape for digital assets. Nearly 80 per cent of respondents emphasised the need for clear and comprehensive regulations that go beyond tax policies, noting that taxation alone will not be sufficient to build long-term confidence and participation in the sector.