New GST reforms: Will they lead to healthier India?

In the last few decades, India has faced considerable healthcare challenges for various reasons.

- DR. C VENKATA S RAM

These challenges have been exacerbated due to the rising rates of non-communicable diseases such as diabetes, hypertension, and cancer on one hand, and the persistent threat of infectious diseases and inequitable healthcare access on the other. Despite medical innovations and the development of better infrastructure, a significant proportion of India's population, especially in rural and underserved regions, has limited access to affordable and quality healthcare. The out-of-pocket expenditure for diagnosis and treatment remains high, with nearly 60% of health expenses being borne directly by households. Under these circumstances, taxation can play a silent but critical role in either increasing or alleviating the cost burden faced by citizens. Recognizing this key factor, the Government of India has recently announced bold and comprehensive reforms in the 2025 Goods and Services Tax (GST) structure.

With its citizencentric approach and reduced tax burden, the GST reform of 2025 marks a key step toward improving healthcare accessibility and affordability for all Indians. The most striking change introduced in this reform is the simplification of the GST rate structure itself. While the previous system had a complex slab-based classification with GST rates ranging from 0% to 28%, the new framework only contains two primary slabs: 5% and 18%. Although this reform affects multiple sectors, its targeted effects on key healthcare products and services are particularly notable.