Rejecting the perception that the government is trimming allocations to critical social sectors, expenditure secretary V Vualnam said funding for health and education has steadily increased over the past three years and remains a non-negotiable priority for the Centre.
In an interaction with the TNIE, Vualnam said comparisons between budget estimates (BE) and revised estimates (RE) often create a misleading impression of underspending, as REs merely reflect the actual pace at which schemes translate into on-ground expenditure.
“That perception is not correct. If you look at the actuals for 2024–25, the revised estimates for 2025–26, and the budget estimates for 2026–27, you will see a steady increase, especially in school education,” he said, adding that the BE for school education in 2026–27 will be in the range of Rs 65,000 crore.
“Education and health remain top priorities. We never cut allocations in these sectors to fund something else. But when we prepare revised estimates, we factor in how quickly money is actually being spent. Newly launched schemes take a few months before expenditure picks up, and that gets reflected in the revised numbers,” he explained.
The budget for the education sector has been revised downward by 5% to Rs 1.21 lakh crore from Rs 1.28 lakh crore for FY26. But the revised estimate is 10% higher than the actual spending in FY25. For health, the revised estimate for FY26 has been brought down from Rs 98,311 crore to 94,625 crore. But the revised estimate for health sector allocation for FY26 is 7% higher than FY25 actual spending of Rs 88,353 crore.
Asked whether the gap between BE and RE was due to departments being unable to spend, Vualnam said it depended on the stage of implementation. “New schemes naturally take time to translate into spending. But in sectors like school education and health, there has been consistent spending and a steady rise.”
When asked why only Rs 30,000 allocation for MNREGS, while Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) Bill, 2025, the rules for which are yet to be notified, gets Rs 95,000 crore allocation, Vualnam clarified MNREGS has been repealed, and the allocation is to meet only verified committed liabilities. As for VB-GRAM G Bill, he said that rules for the newly announced rural development scheme would be notified once the enabling legislation comes into force.
Vualnam also pointed to a structural shift in the composition of government spending. The share of revenue expenditure in total expenditure has fallen to 68% from around 71–72% earlier, reflecting tighter fiscal discipline.
“Revenue expenditure can easily expand if not monitored. We have reviewed autonomous bodies to see if some have outlived their utility and can be merged or closed. We also monitor government employment very carefully. With around 50 lakh employees, any increase is examined with discipline,” he said.
Combined with GDP and revenue growth, these measures have helped reduce the relative weight of revenue spending, he added.