Budget 2026: Can investment in digital health and AI reshape healthcare?

From diagnostics to primary care, experts say the coming Budget must shift digital health and AI from experimentation to execution at scale

Artificial intelligence (AI) in healthcare is no longer a futuristic concept in India. It is already screening X-rays, flagging high-risk patients and supporting clinicians. As the Union Budget 2026 nears, the real question is whether public spending and policy will now enable these tools to transform healthcare delivery at a national scale.

Scaling digital health nationwide

At a policy level, India’s participation in HealthAI, a global initiative promoting safe and ethical AI in healthcare, along with collaborations between the Indian Council of Medical Research and IndiaAI with countries such as the United Kingdom (UK) and Singapore, are helping align India’s digital health push with global best practices and responsible deployment. 

 

Against this backdrop, industry leaders believe Budget 2026 must send an unambiguous signal that digital health and AI are no longer experimental add-ons but core pillars of India’s healthcare system. 

“The Union Budget 2026 should clearly signal a transition from pilot programmes to nationwide execution in digital health and AI-led care,” said Prashant Warier, Founder & CEO, Qure ai. He pointed to the need for a time-bound national regulatory pathway for clinical AI, along with dedicated funding for deploying AI within public health systems, especially diagnostics. 

Experts also stress that investments under the Ayushman Bharat Digital Mission must continue, with a focus on interoperable health data and outcome-linked procurement. According to Warier, such measures would “accelerate real-world impact” and reinforce India’s position as a hub for affordable, scalable healthcare innovation.  ALSO READ | Budget 2026: Doctors, hospitals lay out India's healthcare spending wishlist

Why primary care and diagnostics matter most

A recurring theme across expert views is where public money should be directed. Most agree that the strongest case for Budget support lies in primary care, diagnostics and large-scale screening. 

“Budget support for AI should lean strongly toward primary care, diagnostics, and large-scale screening, where the real gaps in India’s healthcare system persist,” Warier said, highlighting conditions such as tuberculosis, cancer and cardiac disease. AI, he noted, can support frontline clinicians through earlier detection and faster triage, delivering the highest return in terms of access and outcomes. 

Ajay Mahipal, Co-Founder and General Partner at HealthKois, added that investments at the frontline ease pressure across the entire care continuum, including secondary and tertiary hospitals. "This ensures that patients benefit from earlier diagnosis, fewer referrals, more consistent quality of care, and lower out-of-pocket expenses, turning policy allocations into measurable improvements for communities," he adds 

High-end hospital technologies, experts argue, are more likely to attract private capital, while population-level screening and diagnostics require sustained public backing. 

Others caution against viewing the Budget focus as a binary choice between primary care and advanced hospital technology. 

“The Budget needs to prioritise AI that strengthens primary care, diagnostics and screening, while also ensuring the best high-end hospital technologies are available in India so patients do not have to travel abroad for treatment,” said Abhineet Kumar, Co-Founder and CEO at Rocket Health.  Others stress that technology-led care must be supported by stronger preventive health and insurance coverage to deliver lasting impact. “We expect Budget 2026 to strengthen insurance coverage and wellness provisions to support long-term preventive care, while accelerating investment in digital health infrastructure and community-based clinics. These steps can help close access gaps in Tier-2, Tier-3 and semi-urban regions,” said Dr Mukesh Batra, Founder-Chairman Emeritus, Dr Batra’s Healthcare.

What could accelerate adoption fastest?

Despite the growth of healthtech startups, adoption of AI tools in routine care has been slow. Experts say the barrier is not technology but the absence of clear pathways for scaling validated solutions. 

“A nationally funded public–private deployment programme would enable validated AI solutions to move beyond pilots and into scaled implementation,” Warier said. He argued that outcome-linked funding and reimbursement pathways would give hospitals confidence to adopt AI as part of everyday care. 

Mahipal agreed, calling for a Budget-backed public procurement and PPP (Public-Private Partnership) framework where AI tools are procured and renewed based on measurable improvements such as earlier detection or faster turnaround times.  ALSO READ | Budget 2026: Why more medical seats alone can't fix India's healthcare

The invisible backbone - data and cybersecurity

While AI often dominates headlines, experts caution that it cannot function without a robust data infrastructure. Budget backing for interoperability and cybersecurity is seen as non-negotiable. 

“Without reliable, standardised data flows and secure systems, even the most accurate AI cannot be deployed responsibly at scale,” Warier said, calling strong data and security systems the 'invisible backbone' of AI in healthcare. 

Mahipal pointed out that fragmented health information systems and gaps in cybersecurity slow adoption across states and care settings. Budget support for interoperable records and common standards, he said, would allow AI tools to reach more facilities while maintaining patient trust. 

“Clear, risk-based regulatory frameworks provide clinicians and health systems with confidence that AI tools are clinically validated, safe, and accountable,” Warier said. He also stressed the importance of training clinicians to use AI as decision-support, not as a replacement for clinical judgement.

Reaching beyond big cities

Perhaps the most pressing question is whether digital health and AI can genuinely improve access and affordability in Tier-2, Tier-3 and rural India. 

“Budget-led investments can meaningfully expand access and reduce costs, provided the emphasis is on deployment at scale, not innovation alone,” Warier said. AI-enabled diagnostics and decision-support tools, when integrated with digital referral pathways, can reduce avoidable travel and downstream treatment costs. 

"A model, where the primary care system works closely with digital healthcare companies, can significantly expand access to high-quality services in areas such as mental health, sexual health and women’s health, especially beyond the metros,” shared Kumar. 

Meanwhile, Dr GSK Velu, Chairman and Managing Director of Trivitron Healthcare, said combining AI-driven diagnostics with local manufacturing and infrastructure spending could shift healthcare from reactive to preventive, ensuring quality care reaches even remote regions. 

As Budget 2026 approaches, the message from experts is consistent: what the sector now needs is decisive policy, funding and execution to turn digital health and AI into everyday tools for India’s healthcare system. 

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This report is for informational purposes only and is not a substitute for professional medical advice.