Budgets often celebrate absolute increases—“the highest-ever allocation” to this or that sector. But what truly reveals a government’s priorities is not how much spending rises in rupees, but how the shares of expenditure evolve over time. Viewed through that lens, the recent expenditure pattern tells a sobering story: education and health remain structurally under-prioritised, even as other heads consolidate or expand their claim on the public purse.
The big picture: a shift toward capital, but not toward people
Over the last few years, total government expenditure has steadily expanded. Within this, capital expenditure has grown faster than revenue expenditure, increasing its share of total spending. This signals a deliberate policy choice: infrastructure-led growth, asset creation, and long-term supply-side capacity.
From a macroeconomic standpoint, this tilt toward capital is defensible. Roads, railways, defence hardware, and logistics networks are necessary for productivity and strategic resilience. However, capital deepening without human capital deepening creates an incomplete growth model. Infrastructure cannot substitute for a healthy, educated population; it can only complement it.
Education: rising allocations, stagnant priority
School and higher education together account for roughly 2.4–2.6% of total government expenditure in recent budgets. While allocations have risen in absolute terms, their share has barely moved.
This stagnation is striking when placed against India’s own stated ambitions. The National Education Policy envisions public spending on education rising toward 6% of GDP. Translating that aspiration into expenditure shares, education would ideally command at least 4–5% of total government spending, even after accounting for state budgets.
Instead, the current pattern suggests:
- No decisive reallocation toward school education despite post-pandemic learning losses
- Marginal improvements in higher education without a structural step-up
- Education treated as a maintenance expense, not a transformative investment
The gap: roughly 2 percentage points of total expenditure, year after year.
Health: modest gains, persistent underweight
Health expenditure, including research, hovers around 1.8–2.0% of total spending. As with education, this represents incremental improvement without structural reprioritisation.
For a country with:
- High out-of-pocket medical expenses
- Uneven primary healthcare coverage
- Chronic workforce shortages in public health
- A growing burden of non-communicable diseases
this share is simply inadequate.
In an ideal fiscal architecture, public health should claim at least 3–4% of total expenditure. That level is not exceptional by global standards; it is the minimum required to reduce private distress spending and build system-wide resilience.
The gap here too is about 1.5–2 percentage points of total expenditure.
Defence and capital-heavy sectors: where the momentum lies
Defence expenditure—combining revenue, capital outlay, and pensions—has seen a clear rise in its share, moving into the 13–14% range of total spending. Capital-intensive sectors overall have benefited from the government’s infrastructure-first strategy.
National security and physical infrastructure are legitimate and necessary priorities.
Agriculture: small shares, narrow definitions
Agriculture-related departments account for a very small fraction of total expenditure when viewed narrowly. While broader rural and food-related spending exists elsewhere in the budget, the core agricultural and research ecosystem remains modestly funded, reinforcing long-term productivity concerns.
Why stagnant social-sector shares matter
The danger of stagnant shares is cumulative. When education and health fail to gain ground relative to total spending:
- Inequality deepens, as private provision fills the gap
- Intergenerational mobility slows
- Infrastructure yields diminishing returns due to weak human capital
- Growth becomes capital-intensive but employment-light
In effect, the state invests heavily in things but cautiously in people.
The editorial bottom line
Budgets are moral documents disguised as accounting statements. Today’s expenditure pattern reveals a state that is confident about building assets, assertive about security, but hesitant about fully underwriting human development.
An ideal expenditure structure would not pit capital against welfare. It would recognise that education and health are themselves productive capital—with returns that compound across decades.
Until their shares rise decisively—not just in rupees, but in proportion—India’s fiscal priorities will remain growth-oriented, yet development-constrained.
Indian Political Debate 