tl;dr
The Union Budget for 2025-26 reflects a significant decline in overall allocations for Department of Telecommunications and Ministry of Home Affairs as compared to 2024-25 and meagre increment to the Ministry of Information and Broadcasting while Ministry of Electronics and Technology saw 18.64% increased allocations partly due to the prioritization of India AI mission. Even as the Central Sector Schemes under Department of Telecommunications seeing a massive increase in allocation for USOF and Bharatnet by 900% and 158.82% respectively as compared to last year, analysis reveals a sizeable reduction in the Other Central Sector Expenditure under Department of Telecommunications and issues of underutilisation within Ministry of Electronics and Technology being a cause for concern.
Introduction
Union Finance Minister, Shrimati Nirmala Sitharaman presented her 8th consecutive Annual Financial Statement for the Financial Year 2025-2026 (“FY 2025-26”). In the ongoing Budget Session, the Union Finance Minister placed the Union Budget in both the houses on 1st February 2025. The Budgeted Estimates (“BE”) for the Ministry of Home Affairs (“MHA”) and Department of Telecommunications (“DoT”) saw reduction by 29.43% and 27.61% respectively meanwhile Ministry of Information and Broadcasting (“MIB”) witnessed a minute increase by 0.36% whereas Ministry of Electronics and Technology’s (“MeitY”) budgetary allocation was increased by 18.64% as to Budgeted Estimate of 2024-2025, the highest among these four ministries. Moreover, the Ministry of Electronics and Technology is the only ministry among the four to witness an increased Budget Estimate as compared to Revised Estimate (“RE”) of 2024-2025 by 48.16%.
Table 1: Total Expenditure for MeitY, MIB, DoT, and MHA (In Rs. Crores)
The Ministry of Electronics and Information Technology
The total budgetary allocation for the MeitY in the Union Budget 2025-26 stood at ₹26,026.25 crore, reflecting an 18.64% increase over the Budget Estimates of 2024-25. Budgeted Estimates of 2025-2026 sees a further increase in allocation i.e., 48% when it is compared against the Revised Estimates of 2024-25 underscoring the underutilisation of funds in the previous fiscal year. Even as the MeitY’s estimated expenditure increased, the total Budget of Telecom and IT sector in general came down by 0.65% points from last year (2.41% in FY25 to 1.88% in FY26). With the increased utilisation of technology in governance, ballooning of emerging technologies and digitisation being ubiquitous in every walk of life demands more than allotted budget for it to be equitable and accessible to every stratum of society.
Table 2: Budgetary allocations for specific items for MeitY
With AI taking center stage in public discourse and its inevitable growth in the foreseeable future, the India AI Mission aims to bring AI to critical sectors of the economy. It has been allocated ₹2000 crore, a whopping 1056% increase from the revised estimates in the 2024-25 budget, where ₹173 crore was allotted. This considerable increase comes in the background of a Technical Secretariat being proposed and other regulatory frameworks being framed to govern AI in the country which is positioned to have a profound socio-technical impact. Out of the total outlay towards India AI, considerable amount should be spent towards capacity building and upskilling which provides impetus towards the sustained growth of the sector and the ability to keep up with the fast-paced advancements. The Finance Ministry has allocated a total of ₹4,349.75 crore in the FY26 Union Budget to schemes which directly or indirectly involve AI.
Allocation towards Cyber Security Projects under the Digital India Program saw a 143% jump from Rs. 332 crores under the revised estimates for FY25 to Rs.782 cr. allotted in this year’s budget is a step in the right direction given the rapid increase in the cybercrimes and threats. Initiatives under the Cyber Security Projects are related to security policy, compliance and assurance, security training. However, budget allocation for the national cybersecurity agency Indian Computer Emergency Response Team (“CERT-In”), national nodal agency for responding to computer security incidents, increased about 6% to Rs 255 crore in this year's budget from Rs 241 crore in the revised Budget Estimates for FY25 which could prove detrimental at the time when India is susceptible to cyberattacks making it as the second most targeted nation globally.
The Data Protection Board (“DPB”) which is the key regulatory authority under the Digital Personal Data Protection Act, 2023, responsible for enforcing data protection regulations, again saw a mere allocation of Rs. 5 cr. with Rs. 50 lakhs forming the capital outlay which includes fixed assets such as digital portal, and the rest of Rs. 4.5 crores towards revenue expenditure.
Further, Pradhan Mantri Gramin Digital Saksharta Abhiyan (“PMGDISHA”), which was introduced in 2017 to provide basic digital literacy to sixty million citizens across rural India, within two years as initially planned was extended till FY23 with reduced fund allocation every successive year, found no allocation this year as well without fulfilling its mandated purpose completely. The discontinuation of the critical program aimed at improving digital literacy for the country's most digitally underserved populations is concerning. This initiative was essential for enabling access to government, healthcare, and financial services online.
The Ministry of Home Affairs
Table 3: Budgetary allocations for specific items for MHA
The total budgetary allocation for MHA is 29.43% lower than what was allocated in the Budget Estimate for 2023-24 and 23.23% lower than the 2023-2024 revised Budget. The allocation in the Budget Estimate, net of receipts and recoveries, for MHA is ₹6458.24 Cr. The allocation for planned capital expenditure has marginally dipped as compared to both 2023-2024 Budget Estimates (by 10.16%) and Revised Estimate (by 29.39%), which is disappointing.
A sum of ₹574.8 crore is allocated for Census Survey and Statistics/Registrar General of India this year compared to ₹1,309.46 crore in the July 2024 Budget, giving a clear indication that the decadal exercise will be further delayed. The census was supposed to be carried out in 2020-21 but was postponed due to the COVID-19 pandemicCyber Crime Prevention against Women and Children and Miscellaneous Schemes witnessed a small increase in allocation as compared to FY25 RE, however, Revised Estimates saw a reduced expenditure from FY25 BE. Moreover, capital expenditure under the scheme came down considerably from Rs.10 Cr (FY25 BE) to a meagre Rs. 2 lakhs in FY26 BE.
The Ministry of of Information and Broadcasting
Table 4: Budgetary allocations for specific items for MIB
The total budgetary allocation for MIB in 2025-26 is ₹4358.38 Cr, which is a mere 0.36% increase from the 2024-2025 Budget and a 5.79% decrease from the 2024-2025 Revised Budget.
The continued reduction in Prasar Bharati’s allocation and fluctuating investments in information dissemination indicate a lack of clear direction in India’s digital media strategy. However, the increased support for community radio initiatives signals a recognition of grassroots-level media’s role in information access.
The Department of Telecommunications
In 2025-26, DoT (which operates under the Ministry of Communications) has been allocated ₹81005.24 Cr, which is a 27.61% decrease over the budget allocated in 2024-25 (₹111915.43 Cr) and 34.88% reduction over the Revised Estimates for 2024-25 (₹124408.71 Cr).
Table 5: Budgetary allocations for specific items for DoT
The most notable change in allocation for the DoT comes from the staggering increase in allocation for the Bharatnet with 158.82% surge from the Budget Estimates of 2024-25 (Rs. 8500 Cr) and a 238% over FY25 RE of Rs. 6500 Cr. This will bolster the broadband connectivity across government run secondary schools and primary health centres in rural areas. The project is aimed at providing high-speed and affordable Internet access to every gram across nations bridging the digital divide between urban and rural areas. The increase signals a positive step in the right direction.
To this end, the government has increased the estimated expenditure of the Universal Service Obligation Fund (“USOF”) for FY26 by 168.29% over revised estimates of FY25. The objective of the USOF is to provide access to telecom services in a non-discriminatory manner to people in rural and remote areas at affordable and reasonable prices, thereby bridging the rural-urban digital divide. However, historically USOF has been plagued by underutilisation with the government not achieving the complete utilisation even once. The sharp increase in allocation is appreciated along with Bharatnet. However, part of the solution to bridge the digital divide lies in its complete utilisation.
Total budgetary allocations to regulatory bodies such as Telecom Regulatory Authority of India (“TRAI”) and Telecom Disputes Settlement and Appellate Tribunal (“TDSAT”) remained more or less the same as compared to FY25RE. Capital expenditure for both the bodies saw an increased allocation in revised expenditure, yet the Budget Estimate of 2025-26 allotted Rs. 1 Cr and Rs. 77 lakhs respectively for capital expenditure which includes fixed assets.
Conclusion
The Union Budget 2025-26 presents a mixed outlook for India’s digital and telecommunications landscape. While the Ministry of Electronics and Information Technology has seen a notable 18.64% increase in its budget allocation, the persistent underutilisation of funds in previous years raises concerns about effective execution. The IndiaAI Mission’s substantial boost is a welcome move, yet it underscores the need for capacity building and governance frameworks to ensure ethical AI adoption. Meanwhile, cybersecurity investments have increased, but allocations for CERT-In remain modest despite India's rising vulnerability to cyberattacks. The Department of Telecommunications has undergone a significant 27.61% reduction, with notable cuts in other central sector expenditures, even as Bharatnet funding surged by 158.82%. While this signals a push for rural broadband expansion, the chronic underutilization of USOF funds casts doubt on whether these increased allocations will translate into tangible improvements.
While the budget reflects the government’s prioritization of AI, semiconductor development, and rural broadband, the sharp reductions in key ministries suggest a recalibration of digital governance priorities. The continued underfunding of digital literacy programs like PMGDISHA remains a glaring issue, as increased investments in technology without inclusive accessibility measures could widen the digital divide. Additionally, the historical underutilization of funds in telecom and cybersecurity sectors raises concerns about whether increased allocations will result in effective implementation. Ultimately, the 2025-26 budget underscores a shifting focus toward emerging technologies, but the reductions in long-established digital inclusion and governance initiatives highlight areas requiring greater accountability and long-term strategic vision.
Important Documents
- IFF’s post on Union Budget for 2024-2025 (link)
- Consolidated budgetary data for selected items (link)
This post was drafted with the help of our intern Pruthvish Gowda.