Union Budget 2026: Social Sector Funding Shows Hardly Any Gains

There is little to celebrate in this year’s budget, as allocations for key social sectors have barely improved. Health, education, and social welfare have long been underfunded. Over the past decade, allocations for these sectors have either stagnated or declined in real terms, and this year’s budget largely continues that trend. There are modest increases in the 2026–27 Budget Estimates, but the Revised Estimates for 2025–26 indicate that even the funds originally allocated were not fully utilised.

“Our third kartavya, aligned with our vision of Sabka Sath, Sabka Vikas, is to ensure that every family, community, region and sector has access to resources, amenities and opportunities for meaningful participation,” said Nirmala Sitharaman, the finance minister.  

“The social sector, which includes health, education, and social security, has long been underfunded. Over the past ten years, allocations for these sectors have largely stagnated or even declined in real terms,” said Dipa Sinha, development economist. She noted that this year’s budget continues that trend, with only marginal increases for health, education, social welfare pensions and ICDS. It is also concerning that, for several schemes, the Revised Estimates for 2025–26 are lower than the original Budget Estimates, indicating that even the funds initially allocated were not fully utilised.

Education

The Education Ministry saw a modest increase in its allocation, from ₹1.28 lakh crore in FY 2025–26 to ₹1.39 lakh crore in the FY 2026–27 Budget Estimates.

For 2026–27, the net budget is projected at ₹83,562.26 crore, including ₹83,561.41 crore in revenue and ₹0.85 crore in capital expenditure. In 2024–25, the Ministry recorded a net budget of ₹65,159.25 crore, comprising ₹65,159.00 crore in revenue expenditure and ₹0.25 crore in capital expenditure. The revised estimates for 2025–26 rose to ₹78,572.10 crore, while the approved budget for the same year was slightly lower at ₹70,567.14 crore.

The 2026–27 net budget is projected at ₹55,727.22 crore, comprising ₹55,724.54 crore in revenue and ₹2.68 crore in capital expenditure, after adjusting for recoveries. The Department of Higher Education recorded a net expenditure of ₹45,576.52 crore in 2024–25. For 2025–26, the revised estimates increased to ₹50,077.95 crore, while the approved budget for the same year rose slightly to ₹51,381.67

Health and Social Welfare

The finance minister announced initiatives to strengthen healthcare infrastructure, expand trauma care facilities and enhance social security coverage, including for gig and platform workers. Though the spending has slightly increased, there will be hardly any impact on public health measures, which is where government spending is required.

Health ministry’s allocation went up to ₹1.04 lakh crore for FY 2026–27 from ₹98,311 crore (BE 2025–26), while actual spending in the revised estimates was ₹94,625 crore. For 2026–27, the Ministry of Health and Family Welfare has been allocated ₹1,01,709.21 crore. In 2025–26, while the Budget had earmarked ₹95,957.87 crore, the Revised Estimate was lower at ₹92,925.86 crore, indicating that the full allocation was not spent.

For 2026–27, the allocation for the Ministry of Women and Child Development is ₹28,183.06 crore. In 2025–26, although the Budget had earmarked ₹26,889.69 crore, the Revised Estimate was lower at ₹24,373.91 crore,

For 2026–27, the allocation for Saksham Anganwadi and POSHAN 2.0 (under the Umbrella ICDS scheme, including Anganwadi Services, Poshan Abhiyan, and the Scheme for Adolescent Girls) has been set at ₹23,100 crore. In 2025–26, although the Budget allocation was ₹21,960 crore, the Revised Estimate was lower at ₹20,949.47 crore, indicating that even the funds originally allocated were not fully spent.

Rural Development

Allocation for Rural Development saw a modest increase from ₹2.6 lakh crore to ₹2.73 lakh crore in FY 2026–27.

The Department of Rural Development recorded a net expenditure of ₹176,654.76 crore in 2024–25, comprising ₹176,650.78 crore in revenue expenditure and ₹3.98 crore in capital expenditure. For 2025–26, the revised estimates increased to ₹187,754.53 crore, with revenue expenditure of ₹187,750.29 crore and capital expenditure of ₹4.24 crore.

In the approved 2025–26 budget, the net allocation was marginally lower at ₹186,995.61 crore, including ₹186,991.37 crore under revenue and ₹4.24 crore under capital expenditure.

Expenditure on Social Welfare stood at ₹45,804 crore in the actuals for 2024–25. This allocation was increased to ₹60,052 crore in the 2025–26 Budget Estimates, but was subsequently only ₹50,053 crore was spent. For 2026–27, the Budget Estimates indicate a renewed increase in spending, with an allocation of ₹62,362 crore.