While India has upped its spend on building roads and highways to 3.4 percent of GDP in FY25 from 1.7 percent in FY14, its spending on education has been on a decline. Education spending as a share of GDP is set to decline to 0.37 percent in FY25, from 0.63 percent in FY14.

Data shows that the government has directed much of its funding priorities towards building infrastructure, but health and education have not been accorded a similar importance, at least if measured in terms of spending as a percentage of GDP.

In FY24, the government spent 0.44 percent of the GDP on education compared with 0.63 percent a decade ago.

Education spending is set to decline further in FY25 to 0.37 percent of the GDP, as the government is expected to allocate Rs 10,000 crore less to the department of higher education.

On the other hand, health spending at 0.3 percent of the GDP has remained constant over the two decades.

Of course, spending on these sectors as a percentage of GDP is not the only gauge to measure the effectiveness and impact of such spending, experts say.

“The maintenance of education and health spends has ensured that we have not slipped on health and education parameters and have improved on certain counts,” said Paras Jasrai, senior analyst, India Ratings and research.

As per Niti Aayog’s report on multidimensional poverty, 13.9 percent people had below six years of schooling in 2015-16 compared with 11.4 percent in 2019-21.

Maternal mortality rate, or women dying during child birth, declined to 97 in 2018-20, from 130 per lakh live births in 2014-16.

“Given the high level of development that we as a nation aspire for, the share of spending in both these areas needs to be expedited,” Jasrai added.

"India has certainly made significant gains in educational and health attainment. However, significant gaps remain in the health and educational attainment between States, eg, Bihar and Tamil Nadu; and along the rural-urban lines or along gender lines," said Nagesh Kumar, Director and chief executive of the Institute for Studies in Industrial Development (ISID), calling for a gradual enhancement of allocations.

The government has budgeted Rs 90,959 crore for health and family welfare for FY25, Rs 10,000 crore higher than the previous fiscal.

Within the health budget, funds for government’s National Health Mission have declined, while the share of its flagship scheme, Ayushman Bharat has increased.

India’s health expenditure is yet to cross Rs 1 lakh crore, even though it jumped 3.2 times in FY24 from Rs 28,019 crore, compared with a 4x increase on a smaller base of Rs 7,064 crore during United Progressive Alliance’s 10 years in power (2004-14).

On the other hand, the rise in education expenses was lower at 1.7 times between FY14 and FY24 to Rs 1.2 lakh crore from Rs 71,3231 crore. The calculations include budgetary allocations for the ministry and all flagship schemes.

Education accounted for around 4-4.5 percent of the Budget during UPAs era, compared with 3-3.5 percent during NDA’s rule.

Economists contend that the government will need to spend on health and education to aid job creation.

“If you really wanted to create jobs, you would spend money on health and education, but then there you have a capacity and attribution problem,” said Rathin Roy, former member of the Prime Minister’s Economic Advisory Council (PMEAC) in an interview to Moneycontrol.

“States majorly run health and educations, so if you spend more in these sectors then states will get more money and they will get the political credit,” he added.

In a recent paper co-authored by Thomas Piketty, World Inequality Lab argued for higher spends on health and education to correct for income inequality.

The study Towards Tax Justice & Wealth Redistribution in India: Proposals had argued for levying a wealth tax and using the proceeds to double the spending on health and education.

The authors had argued to double the current general government (states and centre) spending on health and education to six percent of the GDP.

As far as capex is concerned, former prime minister Atal Bihari Vajpayee had a better performance with the government spending 3.9 percent of the GDP in its last year in power and 3.5 percent in FY99.