How Spending Across Ministries & Departments Have Evolved

Budgets don’t reveal priorities through speeches. They reveal them through what keeps getting more money, year after year. If you strip the Union Budget of commentary and look only at how ministry-level spending has grown since 2020-21, a clear picture emerges:

India isn’t just spending more, it’s spending differently.

Some parts of the state are expanding rapidly. 

Others are stabilising. 

And a few are quietly stepping back.

This chapter looks at where government spending has actually compounded, and why.

1. Building the Productive State: Infra, Energy, Urban India

The fastest growth in spending is concentrated in ministries linked to economic capacity creation:

• New & Renewable Energy

• Power

• Housing & Urban Affairs

• Transport-linked functions

This isn’t cyclical spending. It reflects a structural belief that growth will come from:

• Energy transition

• Urban infrastructure

• Long-gestation physical assets

Once these projects begin, they demand multi-year funding discipline. That’s why these ministries show sustained growth rather than spikes. This is the Budget behaving less like an expense sheet, and more like a long-term investment plan.

2. The Digital & Enterprise Push: IT, MSMEs, Revenue Systems

Another cluster showing strong growth sits in a very different space:

• Electronics & Information Technology

• MSME support

• Revenue and tax administration

  
  

At first glance, these look unrelated. They aren’t.

Together, they represent the operating system of the modern state:

• Digital public infrastructure

• Formalisation of businesses

• Technology-led tax compliance

  
  

Higher spending here reflects a simple reality. A more efficient, digitised economy costs more to administer, before it pays back. These are enabling expenditures. They don’t announce themselves loudly, but they quietly reshape how the system works.

3. The Sovereign’s Fixed Costs: Interest, Finance, Administration

One of the largest increases in absolute terms comes from interest payments.

This growth is not a policy choice, it is arithmetic.

• Higher borrowings over time

• A larger outstanding debt stock

• Longer repayment commitments

  
  

Interest is the first claim on the Budget, and it grows automatically as debt grows.

Alongside this sit the core costs of running the state:

• Ministry of Finance operations

• Police and internal security

• General administration

  
  

These expenses rarely trend down. They form the fixed operating cost of governance. As the state expands its role, these costs rise with it.

4. Human Capital & Social Functions: Steady, Not Expansive

Education, science & technology, and social-sector departments show moderate, steady growth. This signals a shift in phase from rapid expansion to consolidation and outcome focus

These areas still matter deeply, but the Budget suggests fewer new programs and more emphasis on sustaining existing systems.

5. Where Spending Has Flattened or Declined

A few ministries show flat or declining growth over the period:

• Petroleum & natural gas

• Select tourism and legacy functions

  
  

This usually reflects:

• Reduced subsidy dependence

• Greater reliance on market mechanisms

• Policy rationalisation rather than neglect

  
  

In Budget terms, flat spending often signals maturity, not retreat.

What This Breakdown Really Shows

When spending is viewed across ministries and departments over multiple years, the Budget starts to look less like a list of programs and more like a map of the state’s evolving role.

Three clear signals stand out:

• Growth is concentrated in capacity-building areas - infrastructure, energy, digital systems, and urban development continue to absorb increasing resources.

• The cost of running the state is structurally rising, driven by interest payments, administration, and internal security - expenses that cannot be deferred or easily compressed.

• Several legacy functions are stabilising or flattening, reflecting policy maturity rather than withdrawal.

  
  

Seen over several years, spending across ministries and departments begins to tell a consistent story, one shaped by continuity rather than annual change.

* Disclaimer *

This article represents the author’s personal analysis and interpretation of publicly available budget data. The views expressed are for informational and educational purposes only and do not constitute financial, investment, legal, or policy advice.

No responsibility or liability is accepted for any loss or damage arising from reliance on this content.

Resources & Data Reference:

Annual Financial Statements and Expenditure Budget of the Government of India (FY 2020-21 to FY 2025-26)

Budget documents as presented to Parliament

Aggregations and CAGR calculations performed by the author for analytical purposes