Health is one of the biggest priorities of every country. The progress of the country is not possible without a strong and healthy society. In the last few years, many schemes have been started in India to improve the condition of health services and hospitals, but the real picture of the government budget says something else. The Government of India had implemented a special cess (tax) for health and education in 2018. It was introduced to increase health expenditure and meet the health needs of the people of the country, especially BPL (poor) and rural families. The general feeling was that this cess would increase expenditure in the health sector and support the existing health budget of the government. But the figures and budget details show that the reality is quite the opposite.

Health expenditure reduced while cess is being collected

The total budget expenditure of the government for the health sector is now less than before. In 2017-18, expenditure on health and family welfare was 2.4 per cent of total government expenditure. But in the budget estimate of 2026-27, it has come down to only 1.9 percent. If we look at it in proportion to GDP, it has fallen from 0.28 percent to 0.26 percent. The thing to note is that the money collected from health cess in 2026-27,

That is about 30 percent of the total expenditure of the health budget, that is, if this cess is removed, then the expenditure on health will be only 1.3 percent of the total budget, which is not even half as compared to 2017-18. This means that the cess is only pretending to increase expenditure, but in reality the expenditure on health is decreasing. If there was no cess, the health sector budget would have been only 0.18 percent of GDP.

What do the budget figures tell?
The data clearly shows that the Indian government’s actual expenditure on health has been continuously declining, even though the budget shows a slight increase due to the cess. The share of health in the total government expenditure was 2.4 percent in 2017-18, which has come down to 1.9 percent in 2026-27. If we exclude cess, this share is even less, only 1.3 percent. The same decline is visible in the ratio of GDP. It has reduced from 0.28 percent to 0.26 percent, and after removing the cess it becomes only 0.18 percent. This means that despite the cess, the actual budget received by the health sector is continuously decreasing and is far behind the goals of the National Health Policy.
National Health Policy Objective

According to the National Health Policy, expenditure on health was to be 2.5 percent of GDP by 2025. The share of the central government in this should have been about 0.9 percent of GDP. But currently the expenditure on health is only 0.26 percent of the GDP, i.e. almost three times less than the target. If 2.4 percent of the total budget was spent on health like in 2017, then the budget without cess in 2026-27 should have been around Rs 1.2 lakh crore. But the actual expenditure including cess is only Rs 1 lakh crore.

The real purpose and shortcomings of cess

Experts say that health and education cess only creates the illusion of increasing expenditure. The cess money goes into a reserve fund outside the main budget and there is no transparency or outcome measurement on it. The cess collected for health in 2018-19 and 2019-20 went to general revenue. About Rs 20,600 crore which was collected for health, was not put to much use.

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Disclaimer: This information is based on research studies and expert opinion. Do not consider this as a substitute for medical advice. Before adopting any new activity or exercise, please consult your doctor or relevant specialist.

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Union Budget 2026: The country’s Union Budget will be presented in Parliament on Sunday 1 February 2026. Now less than 24 hours are left for the budget to be presented. On the other hand, the general discussion is often on roads, railways, defense or welfare schemes. At the same time, from the old budget data, we are going to know for which sector the maximum allocation is made. Let us know in which sector the government spends the most.

Government’s biggest expense

According to the revised estimates of Budget 2024-25 and Budget at a Glance 2025-26, interest payments constitute the largest share of total government expenditure. Interest payments were about 24% of total expenditure in 2024-25. For 2025-26, this figure is expected to increase slightly to around 25%. In simple words, every rupee the government spends, almost a quarter of it goes to repay the previous debt. This money does not create new property, jobs or infrastructure.

Largest allocation as per ministry

Among all the ministries, the Defense Ministry gets the highest allocation. In the Budget 2025-26, Rs 6.81 lakh crore has been given to the Defense Ministry. This is about 10% more than last year. This expenditure includes salaries, defense pension, modernisation, purchase of weapons and operational preparation.

share of states

A large part of central expenditure goes directly to the states. The states’ share in central taxes and duties is about 22% of the total expenditure. This amount is mandated by constitutional provisions and the recommendation of the Finance Commission to support state level governance and development.

Infrastructure and transportation

Infrastructure remains a big priority area. A substantial budget is given to the Ministry of Road Transport and Highways for roads and highways. These allocations are focused on asset creation, logistics efficiency and long-term economic growth.

If we talk about rural development sector, Rs 2.66 lakh crore was given to this sector in the last budget. Its objective was to generate employment, housing, cleanliness and basic infrastructure in the village. Along with this, subsidy on food, fertilizer and other essential items is about 6% of the total government expenditure. Whereas the pension of government employees is about 4% of the budget. Old budget data clearly shows that interest payments dominate government expenditure. This is more than defense and infrastructure. This shows why fiscal discipline, controlled borrowing and economic growth are necessary.

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Indian Government Finance: When the Indian government collects taxes, borrows money or receives foreign aid, then accounts of all that money are also kept. But the question arises that who keeps the account of that money? From budget to audit, many major institutions ensure that every rupee is accounted for and used only for public welfare. Let us know who keeps the accounts of this entire account.

Who keeps complete accounts?

The management and audit of the funds of the Government of India is the responsibility of the Ministry of Finance, the Comptroller and Auditor General of India and the Reserve Bank of India. The Finance Ministry is a major part of the financial management of the country. It prepares the Union Budget which gives complete account of the expected income and expenditure of the government for the financial year.

The ministry ensures that funds are carefully distributed among different departments and welfare schemes. Along with this, it also keeps an eye on the expenditure of this money. The ministry formulates economic policies through its departments such as economic affairs, expenditure, revenue and financial services. It also collects taxes and manages government loans.

Responsibility of Comptroller and Auditor General

Its job is to ensure that the money is used properly. It is an independent constitutional authority that accounts for all revenues and expenditure of the government, including ministries, departments and public sector undertakings. If any irregularities are found then it prepares a detailed report and presents it in the Parliament.

reserve Bank of India

The Reserve Bank of India acts as the government’s banker. It handles all the accounts of the government, manages its public debt as well as facilitates all financial transactions. Whenever the government pays or receives money, it all happens through RBI.

India’s democratic structure ensures that government spending always remains under surveillance. The Comptroller and Auditor General’s report is made public, so that Parliament and the civilian government can be held accountable. If cases of scam or corruption come to light, investigation is conducted on the basis of the findings of the Comptroller and Auditor General.

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