One welcome aspect about Budget 2025 is that the Union finance minister 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.
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.
Spending on school education
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.
The finance minister’s speech also did not mention basic issues, such as making the requisite number of teachers or classrooms available, and was focussed only on digital interventions. While utilising the advantages offered by technology is critical and it is also important to address the digital divide right from childhood, it is well known that digitisation is not a substitute for all facilities that a school requires.
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.
One of the flagship programmes of the department of school education is PM POSHAN or the mid-day meal scheme. In its initial days, this scheme played a crucial role in increasing enrolment and attendance, especially of girls and children belonging to marginalised sections.
Also read: The Missing Link in Education Reforms: Uncovering the Challenges Faced by Teachers
To this day, it contributes to addressing classroom hunger and providing at least one nutritious meal to children per day. It has been over 20 years since hot, cooked meals in schools were introduced nationally. It is now time for it to be reimagined in the current scenario.
With more children entering high schools, there is a demand for the mid-day meals to be extended at least up to class X (at present children up to class VIII are covered). This is also important in the context of increasing consumption of processed and packaged foods.
Many field reports show that most children in this age group come empty stomach to school and are often unable to carry lunch from home. They either remain hungry or eat whatever is available and affordable, usually a packet of namkeen or biscuits.
Furthermore, the meal itself needs to be upgraded to be made more nutritious and diverse. While many have discussed the addition of eggs, milk and fruits, the budget for PM-POSHAN does not allow for any of these improvements. The BE 2024-25 was Rs 12,467 crores, increased to Rs 12,500 crores this year. However, the Revised Estimates (RE) for 2024-25 are even lower at Rs 10,000 crores and it is essential to investigate the reason behind this decline.
Nutritional support through anganwadis
Although there is no mention of school meals, the budget speech did mention the nutritional support provided to pregnant women, lactating mothers, young children and adolescent girls in aspirational districts through anganwadis.
The finance minister has said that the cost norms would be enhanced appropriately. This is much needed as the current norms of Rs 8 per day for children and Rs 9.50 for adolescent girls and women were set seven years ago and have not been revised since. Not only do they need to be increased to account for inflation, but also to ensure that nutritional needs are met more effectively through inclusion of eggs and other animal proteins.
Also read: NHA: What the Health Expenditure Data Tells Us and the Questions That Remain
The budget for Saksham Anganwadi and POSHAN 2.0 saw hardly any increase despite this mention in the speech. The allocation for 2024-25 was Rs 21,200 crores, reduced to Rs 20,070 crores in the RE and increased to Rs 21,960 in 2025-26 BE. The anganwadi and mid-day meal budgets need to be increased not only to improve meal quality and expand coverage, but also to raise the wages of cooks, anganwadi workers, and helpers, which remain unacceptably low and have not been revised in a long time.
Spending on health
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.
The allocation for the Department of Health and Family Welfare has increased by 9.5% from about Rs 88,000 crores BE in 2024-25 to Rs 96,000 crores allocated this year. Once again, the RE for 2024-25 was slightly lower (by about Rs 1,000 crores). It has been repeatedly stated that the Union government’s allocation for health needs to be doubled to meet the health spending targets.
Also read: Healthcare for the Elderly: Is Insurance the Best Solution?
The budget for the National Health Mission (NHM) which contributes towards strengthening the public health system, especially at the primary care levels, also didn’t see a substantial increase. The NHM budget has increased by barely 3.4% (therefore a decline in real terms) from an allocation of Rs 36,000 crores last year to Rs 37,223 crores this year.
On the other hand, the Pradhan Mantri Jan Arogya Yojana (PM-JAY), an insurance-based scheme, saw a substantial increase of almost 29% from Rs 7,300 crores to Rs 9,406 crores. While this was expected given the expansion of PMJAY to all elderly people, it still solidifies concerns that the insurance model, where there is a substantial transfer to the private sector, comes at the cost of reduced resources for strengthening the public health system. Other problems with this model of healthcare have been discussed extensively in a number of previous articles.
On the whole, this budget continues the longstanding trend of treating the social sector as a residual and not as one of the core sectors of the economy. The fact that basic education and health forms the basis for human capital – on which one can build skills, a core ingredient for growth – is not taken into account when allocations are made. Although the rhetoric of investing in people has been used, the allocations remain skewed towards large-scale infrastructure projects on one hand and fiscal consolidation on the other. All this, despite an overall slowdown in economic growth and consumption demand.
Dipa Sinha is a development economist.
