As discussions around the Union Budget 2026-27 intensify, healthcare leaders are calling for a decisive policy shift to address India’s most critical medical gaps those in Tier 2 and Tier 3 cities. While metropolitan regions are already well-equipped with advanced hospitals, diagnostics and specialist care, smaller cities continue to face delayed diagnoses, limited emergency services and shortages of trained specialists.
Dr. Dharminder Nagar, Managing Director at Paras Health, said the real pressure points in India’s healthcare system lie outside major metros, where hospitals are struggling to keep pace with the disease burden of a rapidly growing population. He noted that Tier 2 and Tier 3 cities not only serve local residents but also cater to patients from surrounding rural areas, further stretching existing infrastructure.
According to Dr. Nagar, merely increasing hospital bed capacity will not be sufficient unless it is supported by specialist availability, advanced diagnostics and integrated critical care systems. He highlighted that hospitals in non-metro regions face unique challenges, including difficulty in attracting super specialists, higher logistics costs for medical equipment and the need to keep healthcare affordable for local populations.
He emphasised that the upcoming budget should introduce targeted incentives such as viability gap funding, accelerated depreciation for medical equipment, easier financing for greenfield hospital projects and a rationalised GST framework for essential healthcare services. Such measures, he said, could encourage greater private investment and support the expansion of advanced specialties like oncology, cardiology, neurosciences and organ support care in smaller cities through structured public-private partnerships.
Workforce development is another area requiring focused attention, Dr. Nagar said, pointing out that linking medical education, nursing colleges and paramedical training centres with the healthcare needs of smaller cities could significantly improve talent availability and retention. He added that evidence from Tier 2 hospitals shows local training opportunities help healthcare professionals remain rooted in their communities.
Emergency and critical care infrastructure also remains a major gap in non-metro regions. Dr. Nagar called for dedicated budgetary support for trauma centres, cardiac emergency pathways and high-acuity critical care units, warning that their absence leads to avoidable mortality and higher out-of-pocket expenses.
On digital health, he stressed that while telemedicine and remote monitoring have improved access to medical advice, these solutions must be supported by robust physical infrastructure to ensure timely treatment.
Dr. Nagar concluded that prioritising Tier 2 and Tier 3 healthcare infrastructure in Budget 2026-27 should be seen as a long-term national investment rather than a series of isolated announcements. Strengthening hospital capacity in smaller cities, he said, would not only stabilise community health but also boost economic participation and reduce medical migration to metros, making it a critical component of India’s overall growth strategy.