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Ayush sector gains strategic momentum as Union Budget 2026 solidifies Ayush as a mainstream healthcare pillar
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Peethaambaran Kunnathoor, Chennai
February 03 , 2026
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In a significant move to bolster India's pluralistic healthcare model, the Union Budget 2026-27 has elevated the Ayush sector from a supplementary system to a core component of the national health strategy.
Finance minister Nirmala Sitharaman, while presenting the budget yesterday, reinforced the Ministry of Ayush’s status as a distinct financial entity under Demand No. 4, mandating it to manage its own comprehensive budget estimates. This formalization is seen as a clear signal of the government's intent to mainstream Ayurveda, Yoga, Unani, Siddha, and Homoeopathy alongside modern medical systems, ensuring they are fiscally accountable and professionally integrated.
The cornerstone of this year’s Ayush roadmap is an unprecedented focus on research and development (R&D) to drive global scientific credibility. Under a newly mandated reporting structure in Appendix-XLIX, the Ministry has been directed to provide dedicated budget allocations for ‘Research & Development Umbrella Schemes’. This directive aims to facilitate large-scale clinical trials and the scientific validation of ayurvedic formulations, which industry experts believe is critical for achieving wider international recognition and positioning India as a global leader in traditional wellness.
Furthering the ‘Ayurveda Push’, the government announced a major infrastructural expansion, including the establishment of three new All India Institutes of Ayurveda and the modernization of existing Ayush pharmacies and drug testing laboratories. To support these capital-intensive projects, the Ministry must now provide granular details for ‘Grants for Creation of Capital Assets’ under Appendix-XXIII. These investments are designed to ensure that the physical infrastructure of traditional medicine, from colleges to specialized hospitals, can keep pace with the surging public demand both domestically and from international ‘Medical Value Travel’ seekers.
A results-oriented approach now governs the sector’s financial health through the comprehensive ‘Output-Outcome Monitoring Framework’ (OOMF). For the 2026-27 fiscal, the Ministry of Ayush will be evaluated not just on its total expenditure, but on tangible health outcomes, such as the volume of patients successfully treated and the completion of key clinical milestones. This shift toward performance-linked budgeting is intended to maximize the impact of every rupee spent, fostering a culture of efficiency and transparency within traditional medicine institutions.
The budget also places a high priority on equitable access, focusing on the implementation of Ayush welfare schemes through Centrally Sponsored Schemes. To prevent fund bottlenecks, the circular mandates a rigorous review of unspent balances at the state level through the Central Nodal Agency (CNA) and State Nodal Agency (SNA) systems. This mechanism ensures that traditional healthcare benefits effectively reach rural and underserved populations, bridging the urban-rural care gap by facilitating smoother centre-state financial collaboration.
In a move toward long-term financial sustainability, the Ministry is being encouraged to explore the levy of user charges for specific services. As detailed in the budget guidelines, this strategy aims to help Ayush institutions recover operational costs and move toward a more self-sustaining model. By introducing institutionalized revenue streams, the government hopes to reduce the long-term reliance on general grants while maintaining the affordability of traditional treatments for the common citizen.
By aligning R&D innovation, performance monitoring, and capital asset creation, the government has moved traditional medicine from the periphery to the centre stage of the national health framework. These measures collectively aim to transform India into a trusted global hub for holistic health, ensuring that the ancient wisdom of Ayurveda is backed by modern fiscal discipline and scientific evidence.
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