The Union Budget is the most significant annual financial statement of the Government of India, outlining the country’s income and expenditure for the upcoming financial year. However, the initial projections in the budget do not always align with the actual financial outturns. The government uses three key measures to track and adjust its fiscal strategy over time. Actual Expenditure refers to the final amount spent in a given financial year after all outflows are accounted for. Budget Estimates (BE) represent the initial planned allocations for different ministries and sectors at the start of the financial year. These estimates reflect the government’s intended focus and strategic priorities. However, economic fluctuations, policy changes, and unforeseen expenditures often necessitate adjustments. This is where Revised Estimates (RE) come in, which are mid-year corrections to the Budget Estimates, based on real-time revenue and expenditure trends.
Understanding the evolution of expenditure across these three metrics helps in assessing whether government priorities remain stable or undergo changes due to fiscal constraints or emergent policy needs. This article first compares the Actual Expenditure of 2023-24 with the Budget Estimates for 2024-25 and 2025-26, highlighting changes in overall government spending and ministry-wise allocations. The second part examines the difference between the Budget Estimates (BE) and the Revised Estimates (RE) for 2024-25, providing insights into how financial planning has been modified within the year.
A Growing but Slowing Total Expenditure
Over the last three years, total government expenditure has shown a steady increase, reflecting the government’s commitment to development and welfare while ensuring fiscal consolidation. In 2023-24, the actual expenditure stood at ₹44.43 lakh crore, which was increased to ₹48.20 lakh crore in the 2024-25 Budget Estimates, marking an 8.49% growth. The 2025-26 Budget Estimates further increased this to ₹50.65 lakh crore, representing a slower growth of 5.08%. This trend suggests that while the government is expanding its spending, the pace is moderating to align with revenue constraints and debt management goals.
A crucial distinction in expenditure is between capital expenditure (which is invested in infrastructure, asset creation, and economic development) and revenue expenditure (which covers operational costs, salaries, subsidies, and welfare schemes). Capital expenditure saw a significant 17.05% rise in 2024-25 BE compared to 2023-24 actuals, highlighting the government’s focus on infrastructure development. However, the growth rate falls drastically to just 0.90% in 2025-26 BE, indicating that the investment-driven push might slow down in the coming years. Meanwhile, revenue expenditure has grown more steadily, with a 6.17% increase in 2024-25 BE and a further 6.32% rise in 2025-26 BE, underscoring a continued commitment to running government programs and subsidies efficiently.
Sectoral Allocations: Who Gains and Who Loses?
While total expenditure is rising, the distribution of this budget across key ministries highlights shifting government priorities. The share of the School Education Ministry in total expenditure remained almost constant, slightly decreasing from 1.53% in 2023-24 to 1.52% in 2024-25 BE, before rising marginally to 1.55% in 2025-26 BE. This stability suggests that while the sector is receiving more funds in absolute terms, it is not gaining additional prominence in the overall budget.
In contrast, Higher Education saw a significant decline, with its share of total expenditure dropping from 1.25% in 2023-24 to just 0.99% in 2024-25 BE, remaining at the same level in 2025-26 BE. This reflects a 14.03% budget cut for higher education in 2024-25, potentially impacting public universities and research institutions. The government’s focus appears to be shifting towards primary education, but at the cost of higher education investments.
The Health & Family Welfare Ministry experienced a more positive trend, with its budget share increasing from 1.81% in 2023-24 to 1.82% in 2024-25 BE and further to 1.89% in 2025-26 BE. This increase aligns with the government’s emphasis on improving public healthcare infrastructure and addressing post-pandemic health challenges. In absolute terms, the health budget grew by 9.17% in 2024-25 BE and another 9.47% in 2025-26 BE, reinforcing the long-term importance of this sector.
The Agriculture Ministry received a strong boost, with its share of total expenditure increasing from 2.44% in 2023-24 to 2.54% in 2024-25 BE, before slightly dropping to 2.51% in 2025-26 BE. This growth translated into a 13.08% increase in budget allocation for agriculture in 2024-25 BE, showing heightened government focus on rural support, subsidies, and farmer welfare programs. However, the slight reduction in 2025-26 suggests some rationalization in expenditure after the immediate boost.
The Defence budget remains one of the most stable elements of the budget, accounting for 10.28% of total expenditure in 2023-24, which declined slightly to 10.20% in 2024-25 BE and further to 10.00% in 2025-26 BE. Despite these minor reductions, defence spending continues to see year-on-year increases in absolute terms, growing 7.67% in 2024-25 BE and 3.01% in 2025-26 BE. This suggests that while defence remains a priority, other sectors are gradually receiving greater emphasis.
A notable shift was observed in MGNREGA funding, which saw its share of total expenditure drop sharply from 1.94% in 2023-24 to just 1.25% in 2024-25 BE, before recovering slightly to 1.38% in 2025-26 BE. The absolute allocation to MGNREGA was slashed by 30.23% in 2024-25 BE, signaling a reduced reliance on rural employment programs. However, the 16.67% increase in 2025-26 BE suggests that the government may have reassessed the need for employment support.
Mid-Year Adjustments: What Changed in 2024-25 Revised Estimates?
While the Budget Estimates provide an initial blueprint, the Revised Estimates reveal how the government has adapted its spending mid-year. Education funding faced notable reductions, with school education seeing a 7.45% cut and higher education reduced by 2.39%. This suggests lower-than-expected spending or possible policy delays in executing planned initiatives.
In contrast, agriculture required an additional 7.07% increase compared to the original budgeted amount for 2024-25, indicating a greater need for rural support than initially anticipated. Healthcare spending remained largely stable, with only a slight downward revision of 1.23%, meaning that the sector largely adhered to its projected budget.
Interestingly, the Defence budget remained completely unchanged between the Budget Estimates and the Revised Estimates, indicating precise planning and execution in this sector.
Conclusion: A Budget Focused on Stability and Controlled Growth
The Budget 2025-26 continues the government’s strategy of gradual expansion while exercising fiscal restraint. The overall expenditure is increasing, but the pace of growth is slowing down, particularly in capital investments. Sector-wise allocations reveal some shifts in priorities—agriculture, healthcare, and infrastructure continue to see strong support, while higher education and MGNREGA face cutbacks. The mid-year revisions for 2024-25 further highlight these trends, with education and employment programs seeing budget cuts, while agriculture required additional allocations.
The challenge for the government going forward will be to strike a balance between economic growth and social welfare investments. While infrastructure development and fiscal discipline are necessary, adequate funding for education, healthcare, and employment programs remains crucial for ensuring long-term inclusive growth.
Indian Political Debate 