Following the release of the Economic Survey of India and the Union Budget for 2025-26 – which reflect the official assessment of the state of the Indian economy and the government’s priorities and plans going forward – this special edition of the Policy Roundup spotlights research pertaining to selected themes under health, school education, and women’s work, which also form a part of the vision for “Viksit Bharat@2047”.

On 1 February 2025, Finance Minister Nirmala Sitharaman presented the Union Budget for 2025-26. This followed the presentation of the Economic Survey of India, 2024-25, by Chief Economic Advisor V. Anantha Nageswaran. Broadly, the theme of the Budget was stated as “Sabka Vikas” (development and progress for all), with the poor, youth, farmers and women highlighted as the key target groups.

Healthy population: You are what you eat

Noting the increasing burden of non-communicable diseases, the Economic Survey underlines the role of lifestyle choices such as a healthy diet. Citing various research studies, the document draws attention to the link between consumption of ultra-processed or packaged junk foods and health problems such as obesity, cardiovascular disease, and inflammatory disorders. Further, based on data from the Sapiens Labs Centre, the document also phasises the adverse effects of junk food on mental well-being and productivity.

Seeking to assess the impact of food subsidies on the food basket of low-income households, Aouad, Ramdas and Sungu (2024) conducted an experiment in Mankhurd, Mumbai. They find that individuals who receive a wheat and rice subsidy reduce their spending on processed snacks and soft drinks, instead purchasing more spices and accompaniments that complement grains in home cooking. While at baseline, individuals in households with children spent 60% more on snacks (relative to those in households without children), these households demonstrate a stronger positive response to the food subsidy. Such evidence makes a case for the continuation and expansion of food subsidy programmes for the less privileged. In the latest Budget, there is a 3% increase in the allocation towards food subsidy, as compared to the revised estimate for 2024-25.

The Budget Speech took cognisance of the rise in incomes leading to increasing consumption of vegetables, fruits, and millets. Accordingly, the Finance Minister announced a comprehensive programme for fruits and vegetables in partnership with states, to “promote production, efficient supplies, processing, and remunerative prices for farmers”. Based on a small survey in Bengaluru city, researchers at Azim Premji University found that a majority of urban consumers prefer large-sized, uniformly coloured produce displayed in supermarkets rather than the less visually appealing, local produce – encouraging a greater degree of processing at the cost of nutrient content and food safety. Hence, there is a need to understand consumer perceptions of the quality of farm produce and raise awareness.

In the context of millets, the government had brought in a Production-Linked Incentive (PLI) Scheme for the food processing industry for millet-based products in 2022, applicable for the period until 2026-27. As part of I4I’s e-Symposium on Millets, Reshma Roshania of NCAER cautions against the promotion of ultra-processing of millets in order to increase their use. Instead, she advocates for mainstreaming millets into the National Food Security Act.

Strengthening foundational learning: Language matters

It is widely accepted that successfully obtaining skills for the job market later in life hinges on foundational leaning in schools. The Budget Speech also recognises 100% good quality school education as one of the six conditions of Viksit Bharat@2047. In this regard, the Finance Minister announced a new initiative called Bharatiya Bhasha Pustak Scheme to provide digital-form books in Indian languages. According to the National Education Policy, 2020, “young children learn and grasp nontrivial concepts more quickly in their home language/mother tongue.”

Analysing data from large-scale historical events in South India, Jain and Suryanarayana (2017) find that the use of vernacular language in primary and secondary schools did in fact lead to persistent increases in educational achievement. At the same time, evidence of sizeable economic returns to English-language skills in India builds rationale for an education policy that promotes acquisition of English-language skills (Azam, Chin and Prakash 2013).

70% FLFP target – but where are the hostels and crèches?

The Budget Speech acknowledges that being a developed country means having a high rate of women’s participation in the labour force. The presented target of 70% would effectively involve doubling the current female labour force participation (FLFP) rate in India. Various interrelated factors constrain women’s work participation – social and cultural norms at home, issues of safety and mobility in public spaces, and gender inequities and lack of enabling conditions in the workplace (IGC Growth Brief, 2019).

From the perspective of the Budget, which is primarily an exercise of fund allocation towards government priorities, potential impact on women’s work may be achieved by alleviating barriers in public spaces and creating infrastructure that support women in carrying out dual responsibilities at home and at work. The Economic Survey states that “childcare facilities and crèches will go a long way in female participation in the labour force.” However, no commensurate focus is seen in the Budget announcements.

In last year’s Speech, the Finance Minister proposed to facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing crèches, among other measures. Looking at the Implementation of Budget Announcements 2024-25 statement released as part of the Budget 2025-26 documents, an update is that the “Ministry [of Women and Child Development]…intends to create a National database of all working women hostels and crèches in the country including both public and private sector by employing a ‘quality rating’ system in collaboration with Quality Council of India…” Pushing in such directions may make a real difference to the longstanding need to enhance women’s economic empowerment in the country.

Editor’s Notes:

(i) Two I4I posts have been cited in the Economic Survey. The first one by Sengupta and Vardhan (2021) discusses the rising share of consumer credit in overall credit given out by banks. The second one by Mukherjee et al. (2019) explores the impact of trade agreements on India’s apparel trade.

(ii) Do read Rajeswari Sengupta’s (IGIDR) assessment of the new Budget, published on I4I last week, where she argues that the impact of the fiscal stimulus in the form of tax relief for middle-class consumers is likely to be limited and short-lived in the absence of substantial structural reforms to drive sustainable, long-term growth.