5 min readFeb 1, 2026 05:36 PM IST
First published on: Feb 1, 2026 at 05:36 PM IST
According to the latest Economic Survey, India is expected to grow by 7.4 per cent this fiscal year. This is above the average annual growth rate for the past two decades. When growth is sufficiently vigorous, economic policy should pivot towards course correction, targeting sectors of the economy that need particular attention, especially if they have been neglected in the past. In India, these sectors are health and education. The state of India’s health and education is deficient both in absolute terms and in relation to the rest of the world. Health and education represent the basic capabilities of the population. Nations compete through the prowess of their people, which depends on their relative capabilities. The development of capabilities relies strongly on public spending on health and education, even when there may exist a vibrant private sector that provides these services. A comparison of the pattern of public spending on education across the world shows that while India is not a laggard when it comes to public expenditure on education, it is severely behind countries such as China and the United States when it comes to health services. We might ask if the Union Budget for 2026-27 addresses this issue.
Clearly, the Budget’s focus is on growth. To “accelerate and sustain growth by enhancing productivity and competitiveness, and building resilience to volatile global dynamics” is the first of the stated “kartavyas” or duties embraced by this government. While the other two, stated as fulfilment of the aspirations of the people and sabka saath, sabka vikas, may be interpreted as a nod to the social sector, the Budget contains little by way of concrete provisions for enhancing the health and education endowments of the general population.
Though described by the Finance Minister in her speech as a yuva shakti-driven Budget, the initiatives on education are mostly on its uppermost segment. The highlights include the creation of five university townships, which will have multiple universities, colleges and associated housing. A new design institute is planned for eastern India and an upgraded National Institute of Hospitality will “align academic excellence with industry requirements”. The only initiative for schools announced in the Budget Speech is the proposal to support the Indian Institute of Creative Technologies Mumbai in setting up animation, visual effects, gaming, and comics (AVCG) content creator labs in 15,000 secondary schools and 500 colleges across the country. The potential of these initiatives should be evaluated bearing in mind the problem of low quality in India’s public education sector.
New schemes for the health sector follow a pattern similar to what has been adopted for education. Existing institutions for Allied Health Professionals (AHPs) are to be upgraded and new AHP Institutions established in private and government sectors. “Biopharma SHAKTI” has been described as a strategy for healthcare advancement through knowledge, technology and innovation but its stated goal is to develop India as a global biopharma manufacturing hub, expected to build the ecosystem for domestic production of biologics and biosimilars. The strategy will include a biopharma-focused network with three new National Institutes of Pharmaceutical Education and Research (NIPER) and upgrading seven existing ones. As with the proposed university townships, a scheme has been announced to support states in establishing five regional medical hubs in partnership with the private sector. These hubs will serve as integrated healthcare complexes that combine medical, educational and research facilities. But the intention behind this is to promote India as a hub for medical tourism services.
The Budget has marginally raised the share of the social spend in the total expenditure, but the new schemes are largely aimed at the top tier in their respective fields. Therefore, the impact on schools and hospitals, which is where a severe shortfall of public provision of services is concentrated, is unlikely to be much. For that very reason, their impact on India’s “disease burden”, which the Minister referred to, is unlikely to be great either. This is an elitist budget. Its spending pattern does not address the pressing needs of the majority. But it may yet raise the growth rate since capital expenditure has been hiked to its highest level in a decade.
The writer is honorary visiting professor, Centre for Development Studies, Thiruvananthapuram
The Budget has marginally raised the share of the social spend in the total expenditure, but the new schemes are largely aimed at the top tier in their respective fields. (PTI) 
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