Budget 2025: ₹11.21 lakh crore capex; here’s what key sectors received

Finance Minister Nirmala Sitharaman tabled her eighth consecutive Budget in Parliament on Saturday, February 1, making a marginal increase in capital expenditure allocation continuing the government’s focus on infrastructure-driven growth.

In Union Budget 2025, FM Sitharaman allocated ₹11.21 lakh crore for capex in FY 2026, marking a 0.9% increase from the FY25 budgetary outlay. While several sectors received a hike in allocation, the funding for the railway sector remained unchanged.

The Budget 2025 came as a major relief for India's middle class, which had long been demanding a revision in the income slab. Sitharaman announced that people won't have to pay income tax for annual earnings of up to ₹12 lakh. For the salaried class, the exemption limit goes up to ₹12.75 lakh with a rebate of ₹75,000.

While the changes in income tax slabs stole the show in Budget 2025, the Finance Minister also made major updates to the budgetary allocation to key sectors to aid overall growth in the Indian economy.

Here are budgetary allocations for key sectors of the economy:

Defence

The Finance Minister allocated ₹6,81,210 crore towards defence expenditure for FY26, marking an uptick of nearly 10% from ₹6,21, 940 crore announced in the full Budget 2024. The government has pegged ₹1,92,387 crore for capital outlay whereas expenditures have been projected at ₹1,60,795 crore.

Under the capital expenditure, the FM allocated ₹48,614 crore for aircraft and aero engines, while ₹24,390 crore has been earmarked for the naval fleet. An additional ₹63,099 crore has been set aside for other equipment.

Agriculture

The agriculture and allied activities found prominence in Sitharaman's Budget speech with the announcement of new schemes to aid growth in the sector. The government allocated ₹1.71 lakh crore to the agriculture sector in comparison to budget estimates of ₹1.51 lakh crore last year. The Finance Minister launched the PM Dhan-Dhaanya Krishi Yojana, which will cover 100 districts with low productivity. The scheme aims to enhance agricultural productivity and adopt crop diversification. The move is also aimed at promoting sustainable agriculture practices with improved irrigation facilities and availability of long-term and short-term credit.

The government further announced ₹8,500 crore for the Rashtriya Krishi Vikas Yojana (RKVY), the government's flagship scheme to ensure the holistic development of agriculture and allied sectors.

Healthcare

The government allocated ₹98,311 crore to the healthcare sector in Budget 2025, marking a 9.78% year-on-year growth from ₹90,958.63 crore in FY25. An additional ₹2,445 crore has been allocated to the PLI scheme for the pharma industry. The Finance Minister announced ₹37,226.92 crore for the National Health Mission in her Budget speech.

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) received an allocation of ₹9,406 crore this year whereas the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) got ₹4,200 crore in Budget 2025.

Education

Budget 2025 allocated ₹1,28,650 crore for education, which is an uptick of 6.6% from the ₹1.21 lakh crore allocation for the sector in FY25. Schools have been allocated ₹78,572.1 crore, up from the current estimate of ₹73,008 crore. Higher education has received an allocation of ₹50,077.95 crore.

The finance minister also announced a Centre of Excellence in Artificial Intelligence for education with a total outlay of ₹500 crore. In the medical education field, there will be 10,000 additional seats in the next year. The government has announced to add 75,000 seats in the next five years.

Rural And Urban Development

The government has allocated ₹2,66,817 crore to rural development making its second higher allocation after defence in Budget 2025. The Ministry of Urban Affairs (MoHUA) received an allocation of Rs 82,577 crore. In addition, the government has proposed to set up an urban challenge fund of ₹1 lakh crore to implement the proposals for cities as growth hubs for creative redevelopment of cities. It will also cover water and sanitation purposes announced in the July 2024 Budget.

Railways

The capex target for railways in Budget 2025 remained unchanged at ₹2.52 lakh crore. The government had increased the budgetary allocation to the railways by 5% YoY from ₹2,40,200 crore in 2023-24.