By Rajiv Kumar & Samriddhi Prakash, Respectively Chairperson and Research Associate at Pahlé India Foundation

Each year, the Union Budget is presented as the government’s most consequential economic document. Budget-making is an exercise in foresight, prioritisation, and fiscal discipline. But a closer look at what happens after the Budget is passed reveals a growing disconnect between promise and practice. Increasingly, the Budget appears less like a binding fiscal commitment and more like an accounting statement of intent.

If allocations announced to Parliament are not followed through in execution, and if flagship schemes remain trapped within government files long after their announcement, it is worth asking: what is the purpose of the Budget if the government is not bound by it?

What’s happening to flagship schemes?

The table compares Budget Estimates with actual expenditure for a set of major schemes in 2025-26. The pattern is revealing. Two features stand out. First, schemes that are central to long-term human development and infrastructure—such as Jal Jeevan Mission, housing, sanitation, nutrition, and urban programmes—consistently undershoot their Budgeted allocations, often by large margins. Second, fertiliser subsidies once again overshoot their estimates, with urea and nutrient-based subsidies together absorbing far more fiscal space than planned.

This divergence is not accidental. Subsidies are open-ended and demand-driven. When prices rise or consumption expands, spending follows automatically. By contrast, schemes like Jal Jeevan Mission or PMAY require administrative capacity, coordination with states, timely approvals, and institutional readiness. When these conditions are missing, under-spending becomes the default outcome.

The consequence is a quiet but powerful reprioritisation of public spending not through parliamentary debate, but through execution failure.

Fiscal prudence, but at what cost?

To be clear, this is not a story of fiscal indiscipline. The government has adhered to its fiscal consolidation path, managing deficits and debt with care. But fiscal prudence has come with a structural bias towards subsidies and away from growth-enhancing spending.

Interest payments and subsidies now account for an increasingly large share of expenditure, leaving limited room for social sectors such as education, health, nutrition, and the environment. Over time, this weakens the foundations of growth while preserving short-term priorities.

Announcements without implementation

The problem is not confined to spending; it extends to the very architecture of Budget announcements.
The government brings out a document, “Implementation of Budget Announcements”, along with the subsequent year’s Budget. While the details of implementation are described in detail, the striking finding is that almost none of the flagship schemes announced last year have reached full implementation. Most remain stuck in consultations, draft guidelines, cabinet approvals, committees, or pilots. Very few have translated into on-ground delivery, and almost none are at a stage where outcomes can be evaluated.

In effect, the Budget has become a catalogue of intentions rather than a road map for delivery.

From fiscal planning to fiscal signalling

Together, the two tables tell a consistent story. The Budget increasingly performs a signalling function to markets, voters, and stakeholders, rather than acting as a binding fiscal contract.

Allocations are announced optimistically, knowing that under-spending on complex schemes can always be explained away as “implementation challenges”, while overspending on subsidies is treated as unavoidable.

Reclaiming the purpose of Union Budget

If the Budget is to regain its relevance, it must move beyond announcements and accounting arithmetic. Scheme announcements should be tied to clear implementation readiness, realistic timelines, and accountability for persistent under-spending. Evaluating Budgets by where schemes sit in the implementation pipeline and not just by headline allocations would be a meaningful first step.

The real question has moved away from fiscal consolidation to whether it is coming at the cost of reprioritisation of commitments. If Parliament-approved allocations do not bind the executive, and if Budget announcements remain trapped within government processes, then the Union Budget risks becoming a ritual rather than a rulebook.

And if that is the case, we must ask: what is the point of the Budget at all?

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.