Despite record headline allocations in the Union Budget, the Union government has spent only about 40–41 per cent of its budgeted outlay on major flagship schemes during the first nine months of the 2025–26 financial year, official expenditure data shows, raising concerns over implementation delays and the pace of on-ground delivery.
According to interim figures compiled up to December 2025, utilisation has lagged across several big-ticket programmes spanning infrastructure, health, rural employment, housing and urban development sectors that form the backbone of the government’s growth and welfare agenda.
Among the most affected are infrastructure and capital expenditure programmes, where utilisation has remained between 32 and 38 per cent. Key schemes such as the Bharatmala Pariyojana, the National Highways Development Programme, PM Gati Shakti – National Master Plan, and railway capital expenditure on tracks, stations and rolling stock have seen slower disbursement, largely due to land acquisition hurdles, tendering timelines and phased project execution. Officials maintain that such spending typically accelerates in the final quarter.
In the health sector, fund utilisation stands at roughly 42–45 per cent. While entitlement-driven schemes like Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY) have shown steadier spending, infrastructure-heavy programmes such as the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) and components of the National Health Mission have faced procurement and state-level clearance delays.
Rural development programmes have also underperformed relative to allocations. Schemes including MGNREGS, Pradhan Mantri Awas Yojana–Gramin, and the Jal Jeevan Mission (Rural) have collectively utilised about 38–42 per cent of funds. Officials cite seasonal demand patterns, certification delays and compliance-linked fund releases as key factors behind the slower pace.
In contrast, social welfare and subsidy-linked schemes have recorded comparatively higher utilisation, in the 48–50 per cent range. Programmes such as the Public Distribution System, Pradhan Mantri Garib Kalyan Anna Yojana, POSHAN Abhiyaan, and Samagra Shiksha Abhiyan benefit from automatic and recurring expenditure flows, though newer education and nutrition components remain behind schedule.
Spending under defence and strategic heads, including defence capital acquisitions, Border Roads Organisation projects, and DRDO programmes, has hovered around 39–43 per cent, reflecting the traditionally back-loaded nature of defence procurement. Urban development schemes notably the Smart Cities Mission, AMRUT 2.0, and PMAY–Urban have similarly utilised just 37–41 per cent, constrained by municipal approvals and co-funding requirements.
The original budget estimates for these 53 schemes were over ₹5 lakh crore. However, revised allocations have been reduced to under ₹3.8 lakh crore, about 74% of the initial outlay. Actual fund releases between April and December stood at just over ₹2 lakh crore, which is 41.2% of the budgeted amount and 55.4% of revised estimates.
Economists warn that prolonged underspending could blunt the growth multiplier effect of public expenditure, particularly at a time when domestic demand remains a critical driver. Opposition parties have seized on the data to accuse the Centre of “headline budgeting without execution,” while the government argues that prudent fiscal management and compliance-driven releases explain the early-year slowdown.
With only three months left in the fiscal year, attention now turns to whether ministries can accelerate implementation without triggering a last-minute spending rush — a final-quarter push that will determine whether the underspend narrative persists or gives way to a familiar year-end surge.
– Samuthiran
