Evolution of the Indian Budget
The Union Budget in India dates back to the colonial period, when James Wilson, the Finance Minister of the East India Company at the time, presented the first budget on April 7, 1860, while under British rule. This budget contained the financial estimates for the British government in India.
India’s budget is governed by Article 112 of the Constitution. This article requires the President of India to present an annual financial statement, known as the Union Budget, outlining the government’s projected receipts and expenditures for the upcoming fiscal year. Article 114 also requires that a separate account for the Consolidated Fund of India be maintained, which includes all revenues and loans. The budget must be presented to both Houses of Parliament for approval before it can be implemented, ensuring government financial transparency and accountability in the management of public funds. This process is critical for fiscal governance in India.
On November 26, 1947, Finance Minister R.K. Shanmukham Chetty presented Independent India’s first Union Budget. This budget was significant because it was issued during the partition of India and covered a period of seven and a half months until March 31, 1948. The initial budget was required to establish India’s financial governance after its independence.
Following independence, the budgetary process underwent significant evolution. The first full-year budget for the Union of India was presented in 1949–50. This budget aimed to integrate the financial statements of various princely states into a single financial framework, paving the way for the country’s financial unification.
One long-standing tradition was the presentation time; until 2017, the budget was typically announced in the late afternoon, which corresponded to similar timings in the United Kingdom. However, in an effort to modernise the process, the government moved the budget presentation to the morning of the first working day of February 2017.
Several budgets have stood out over time for their impact on the Indian economy. The 1991 budget, presented by Finance Minister Manmohan Singh, marked the start of economic liberalisation in India and is known as the “Epochal Budget” due to its broad reforms. In 2017, the Railway Budget was integrated into the Union Budget, which represented a significant administrative change.
Today, the Union Budget is still a comprehensive document that outlines the government’s projected revenues and expenditures for the fiscal year, divided into revenue and capital budgets. It is now being prepared with increased transparency measures, including extensive consultations with various stakeholders.
Since its inception during colonial rule, India’s Union Budget has undergone significant transformations to reflect the country’s changing political and economic landscape. As the budget evolves, it continues to be an important tool in shaping India’s financial policies and economic direction.
Overview of Union Budget FY 24-25
The Indian government presented its budget for 2024-25 on July 23, 2024. This is Finance Minister Nirmala Sitharaman’s seventh budget and the first full budget during Modi’s third term in office.
The budget arrives at a time when India’s economy is demonstrating resilience in the face of global uncertainty. According to the Economic Survey, India’s GDP growth rate will be between 6.5% and 7% in fiscal year 2025, indicating a strong recovery following the pandemic. Inflation is stable and on track to reach 4%, which is a positive sign for the economy.
Total receipts, excluding borrowings, are estimated to be around Rs 32.07 lakh crore, with total expenditure at Rs 48.21 lakh crore. The capital expenditure has been kept at Rs 11.11 lakh crore, demonstrating the government’s commitment to infrastructure development.
The budget prioritises productivity, jobs, social justice, urban development, energy security, infrastructure, innovation, and reforms. The fiscal deficit for fiscal year 2025 has been set at 5.1% of GDP, with a commitment to reduce it to 4.5% in subsequent years.
Agriculture, employment, and small and medium-sized businesses are among the top budget priorities. The budget also emphasises infrastructure projects as a driver of economic growth and job creation. To stimulate labor-intensive sectors, new employment-related incentives have been implemented.
While the budget discusses income tax reforms, specific details about changes in tax slabs or exemptions are not specified. Over the next six months, the government will conduct a comprehensive review of the customs duty structure.
Overall, the Union Budget 2024-25 outlines a vision for long-term growth based on strategic investments in key sectors, fiscal discipline, and an inclusive economic framework that benefits all segments of society. The government’s increased emphasis on capacity building, infrastructure improvement, and social justice demonstrates its desire to shape a strong economic future for India.
Education and Minority Affairs Road Map
The Indian Budget 2024-25 includes a substantial allocation for education of Rs 1.48 lakh crores. This is an increase over the previous year’s allocation of Rs 1.13 lakh crore, reflecting the government’s commitment to improving educational resources and infrastructure. In contrast, the Ministry of Minority Affairs received an allocation of Rs 3,183.24 crore, a slight increase of Rs 574.31 crore over the revised estimate of Rs 2,608.93 crore for 2023-24.
A significant portion of the education budget, approximately Rs 1,575.72 crore, is set aside for minority community education empowerment. This allocation is intended to address educational disparities and promote inclusivity among various social groups, particularly those that have historically been marginalised. These investments are intended to increase access to quality education, with a particular emphasis on scholarships and skill development programs.
The budget prioritises skill development as a critical pillar of economic growth and job creation. Several schemes in the Prime Minister’s employment package have been implemented to improve employability. These initiatives will receive Rs 2 lakh crore over the next five years, potentially benefiting 41 million youth. This commitment is consistent with the Indian government’s goal of improving workforce skills to meet the demands of an ever-changing job market.
Despite increased allocations, the education sector faces significant challenges in terms of effective resource utilisation. According to reports, while overall education spending increased at a compound annual growth rate (CAGR) of 9.4% between FY18 and FY24, student performance metrics have declined. The National Achievement Survey has revealed troubling trends, such as significant drops in maths and social science scores among students.
Even with a slight increase, there are issues with the Ministry of Minority Affairs’ budget. Essential programs, especially those pertaining to education, have been trimmed. For example, the Pre-Matric Scholarship fund has been reduced from its previous levels to Rs 326.16 crore alone. The changes, according to critics, could exacerbate already-existing inequalities because they show a lack of genuine commitment to minority communities’ educational needs.
India’s education budget for the 2024-25 fiscal year is ₹1,25,638 crore, which accounts for 0.38% of the projected nominal GDP of ₹326.4 lakh crore. This massive underinvestment in education exemplifies the country’s lack of commitment to future generations, especially when compared to countries that prioritise education as a key driver of progress.
Countries such as Norway, New Zealand, and the United Kingdom set a high standard by allocating 6% to 7% of their GDP to education. Norway, for example, spends 6.4% of its GDP, while New Zealand spends approximately 6.3%. The link between increased investment in education and improved educational outcomes, such as better infrastructure, teaching quality, and student performance, is undeniable.
Belgium is also setting a good example by allocating 6.5% of its GDP to education (56). These countries recognise that adequate funding is required to create an equitable, accessible, and high-quality education system.
Compared to several other developing nations that invest more than 3% of their GDP in education, India’s current expenditure level is woefully inadequate. India is falling behind other nations that are implementing aggressive education reforms in their efforts to meet or surpass this standard, which is extremely embarrassing.
In order to give its people fair opportunities and improved results, India urgently needs to increase its investments in education, as this comparative analysis shows. Education is a priority for nations that want to thrive, as evidenced by global spending trends. India needs to examine its priorities carefully and establish education as the cornerstone of its development plan.
The reduction in funding for major scholarship programs has important implications for minority education. The Pre-Matric Scholarship scheme, which previously served a large demographic, has been narrowed to only classes 9 and 10, severely limiting its accessibility. This expands the gap in educational opportunities for minority students during their formative years.
Educational stakeholders and minority rights organisations have responded in different ways. While educational experts acknowledge the overall increase in education spending, they are concerned about the insufficient increase in minority-specific educational allocations. Many activists criticise the government for failing to meet the demands of the National Education Policy (NEP), which requires a minimum of 6% of GDP to be allocated to education—a benchmark that has yet to be met.
The effectiveness of these budget allocations is heavily dependent on the robust implementation of programs. Monitoring and evaluation frameworks are urgently needed to ensure that funds reach their intended beneficiaries. Previous trends suggest that a significant portion of funds allocated for minority schemes go unutilised. This has prompted calls for systemic reforms to ensure that eligible beneficiaries receive educational funding in a timely manner.
To maximize the impact of the education and minority affairs budget, a multi-faceted approach is recommended. Investing in digital learning infrastructure will enable schools to provide equitable access to education, especially in remote areas. The integration of technology into the educational framework is critical for meeting modern educational needs. Prioritizing teacher training programs will enhance teaching quality, ensuring that instructors are well-equipped to utilize new technologies and methodologies. Bolstering scholarship funds is essential to ensure that minority students are not disproportionately affected by budget cuts. Increasing overall financial resources for minority education programs, focusing on demand-driven models, can significantly enhance participation rates among minority students. Policies must be developed with the input of minority communities to close existing education gaps. This engagement will ensure that strategies are aligned with community needs and effectively address barriers to education.
The Indian Budget 2024-25 marks a watershed moment in addressing educational disparities and promoting minority empowerment. While increases in the education budget and allocations for minority affairs demonstrate a commitment to investing in human capital and equity, the true challenge is ensuring effective implementation and allocation of resources. To fully realise the potential of these budgets, a strategic emphasis on practical execution, inclusivity, and transparent governance is essential. Education stakeholders must continue to advocate for adequate funding and meaningful reforms in order to create an equitable educational environment for all Indian citizens, particularly those from marginalised communities.
The Ministry of Minority Affairs budget constitutes approximately 0.66% of the total government expenditure. The budget for the Ministry of Minority Affairs (MoMA) in fiscal year 2024-25 is ₹3,183.24 crore. This is an increase from the revised allocation of ₹2,608.93 crore in 2023-24, which began at ₹3,097.60 crore. However, compared to previous years, the allocation remains significantly lower than the ₹5,020.50 crore allocated in 2022–23. This data indicates a concerning trend for minorities, with significant fluctuations and overall lower funding in recent periods.
The Ministry of Education budget constitutes approximately 2.49% of the total government expenditure. In 2024-25, the Ministry of Education’s budget is projected to be ₹1,20,627.87 crore, a slight increase from ₹1,12,898.97 crore in 2023-24. However, the allocation has decreased from ₹1,29,718 crore in 2022-23, indicating an overall downward trend over the fiscal years analysed.
When comparing the trends, MoMA’s funding fell significantly from 2022-23 to 2023-24, only to recover slightly in 2024-25. This raises concerns about the government’s commitment to minority welfare, especially given that it has decreased by nearly 36% since 2022-23. On the other hand, the Ministry of Education’s allocations have fluctuated but are slightly higher in 2024-25 than the previous year. Nevertheless, it has not returned to the levels seen in 2022-23, posing challenges in consistently funding educational initiatives. This differentiation in budget percentages underscores the varying levels of financial commitment towards minority and educational initiatives within the government’s fiscal framework for the year 2024-25.
The budget allocation for the Ministry of Minority Affairs (MoMA) in 2024-25 is ₹3,183.24 crore, a significant increase from the previous year’s revised estimate. While this increase may indicate a stronger commitment to minority communities and educational initiatives, it is critical to assess whether it is sufficient in light of the current socioeconomic challenges these communities face. The modest increase in funding may not be enough to address long-standing disparities, especially given the breadth of issues such as education, healthcare, and socioeconomic empowerment that necessitate significant and ongoing investment.
The Scheduled Caste Sub Plan (SCSP) allocation has increased by 40.4%, reaching ₹13,844.28 crore. This surge reflects a stronger emphasis on the developmental needs of Scheduled Castes. However, the effectiveness of this allocation is heavily dependent on its implementation and the ability of state governments to efficiently use these funds. There is frequently a disconnect between allocation and actual impact on the ground, with issues such as underutilisation of funds and bureaucratic inefficiencies stifling progress.
The Scheduled Tribe Sub Plan (STSP) allocation for 2024-25 has been increased by 70%, reaching ₹13,000 crore. This demonstrates a strong commitment to improving the conditions in tribal communities. The real challenge, however, is to ensure that these funds reach their intended beneficiaries and are effectively used for sustainable development initiatives. Geographic and infrastructural constraints are frequently encountered in tribal areas, making efficient project implementation challenging.
To sum up, the government has acknowledged the need to invest in marginalised groups, as evidenced by the increased allocations for MoMA, SCSP, and STSP. However, the question that needs to be addressed is whether these increases are adequate to tackle the extent of socio-economic disparities. Furthermore, clearing structural obstacles that frequently keep marginalised communities from fully benefiting from such funding is necessary for the effectiveness of these allocations, as is transparent and efficient utilisation. In the event that these implementation obstacles are not resolved, the well-intentioned budget increases might not result in significant changes occurring in practice.
In order to support the development of a more equitable society through education, this budget analysis highlights the urgent need for comprehensive policy and investment strategies that actively engage minority voices and educational stakeholders.
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