By Nageshwar Patnaik in Bhubaneswar, February 12, 2025: The social sector plays a fundamental role in ensuring equitable progress. Investments in education, health, nutrition, and social protection are essential not just for welfare, but for building human capital, reducing inequality, and ensuring long-term economic resilience.

Every Finance Minister tries to meet many of the expectations encoded in the Directive Principles of State Policy (DPSP) to promote socio-economic welfare of the people. But some fail and some succeed while presenting the Budget.

Presenting her 8th Budget, Finance Minister Nirmala Sitharaman mentioned six principles of ‘Viksit Bharat’: zero-poverty, quality education, comprehensive healthcare, meaningful employment, inclusion of women in economic activities, and farmers’ well being. However, Budget figures show that these measures are not sufficiently backed by allocations.

Incidentally the debates around the Budget often centre on fiscal deficit targets, capital investments, and tax reforms. However, academics, industry, and civil society have all been recommending demand-side measures to increase the disposable incomes of the poor, lower classes, and the middle class. The union government’s total expenditure has risen by 7 percent i.e. from Rs 47.16 lakh crore in 2024-25 to Rs. 50.65 lakh crore in 2025-26, but ironically, the allocation for the social sector has not grown proportionally.

But beyond the glossy numbers, the core welfare schemes of this administration— PM-Kisan Samman Nidhi (PM-KISAN), Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY), and Ayushman Bharat—are themselves not testaments to success but glaring reminders of failure.

Over the past decade, the share of social sector spending in total Union government expenditure has stagnated. During 2014-15 to 2019-20, it averaged 21% of total expenditure and 2.8% of gross domestic product (GDP). The trend continued during 2019-20 to 2024-25, with the share remaining at 21%, and 3.3% of GDP, though pandemic-related spending caused fluctuations.

In 2020-21, the and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) expansions pushed social sector spending to an all-time high of 30% of total expenditure and 5.3% of GDP. However, since then, the share has steadily declined, reaching 19% in 2023-24 (2.8% of GDP), marginally lower than 2014-15 level.

Nirmala highlighted ‘investing in people’ as a critical intervention, along with investing in the economy, in achieving ‘Viksit Bharat’. Sadly though, the vision for health, education and social protection – the primary components of investing in people – is still quite narrow. Public expenditure in all of these areas is quite low in India compared to global standards, as well as by targets set by our own governments.

For 2024-25, the social sector’s share stood at 17%, an all time low in the last decade, and in 2025-26, it is projected at 19%. Over the past decade, the growth trajectory of social sector spending has slowed, reflecting shifting policy priorities.

While overall social sector expenditure grew at an average annual rate of 8% between 2014-15 and 2019-20, this pace declined to 4% in the period between 2019-20 and 2024-25. Food subsidy and civil supplies again held the largest share, accounting for 35% of total social sector spending. But despite it being a phase with the pandemic at its height, the share going to medical health has fallen, averaging only 10%. Similarly, the share of education and rural development has also declined to 12% and 20%, respectively.

Real allocations declined for four of the nine schemes, which included Samagra Shiksha, Jal Jeevan Mission (JJM), PM POSHAN, and National Social Assistance Programme (NSAP).While looking at the period between 2019-20 and 2024-25, except for JJM all other schemes saw decline in allocations.

Largely, the schemes that saw a big decrease in real terms are related to education (Samgara Shiksha and PM POSHAN), health (NHM), employment (MGNREGS), social security National Social Assistance Programme (NSAP), rural development, Pradhan Mantri Gram Sadak Yojana (PMGSY) and direct entitlement Swachh Bharat Mission-Grameen (SBM-G).

In 2025-26, allocations for MGNREGS, SBM-G and NSAP remained stagnant. Achieving a spending goal of 3% for health and 6% for education, as recommended by various government committees and in the national policies for these sectors, would require a major push in allocations rather than some piecemeal changes.

The school education budget saw an increase from about Rs 73,000 crores in 2024-25 Budget Estimates (BE) to about Rs 78,600 crores in 2025-26. This increase of 7.6% barely keeps pace with inflation and does not provide much leeway to fill the massive gaps in human resources and infrastructure that the sector faces.

It is also worrying that year after year, even the allocated amounts for school education do not get spent. The revised budget for school education for 2024-25 for instance is around Rs 68,000 crores, about Rs 5,000 crores less than what was allocated initially. The budget for health too remains quite low.

The finance minister’s speech mentioned increasing seats under medical education and day care centres for cancer patients, both worthy intentions. But the overall increase in the health budget is not enough to cover even the existing programmes, let alone new ones.

According to the World Inequality Report (2024) the top 10% of India’s population has improved its share of the national pie from 33% in 1957 to 56% in 2022, while the bottom 50%’s share has come down from 24% in 1957 to 12% in 2022.

French economist Thomas Piketty in a research article has brought out how a mere two per cent wealth tax on people with a net worth above Rs 10 crore and an inheritance tax will generate 2.7% of the GDP of India.

Yet again the Budget had made little attempt to take bold measures addressing India’s fundamental challenge of inequity and social justice giving some breather to “The Wretched of Earth”.