Union Budget 2025 profile: Where each rupee comes from and where it goes

Budget Profile: A breakdown of income and expenditure

The Indian government’s Rs 50.65 lakh crore expenditure in Budget 2025-26 will be primarily funded through tax revenue, borrowings, and non-tax receipts, as per the "Where Money Comes From and Where It Goes" breakdown. Here's the profile of the Budget 2025:

Where the money comes from

• Direct taxes (corporation tax & income tax): 39%
• GST & other indirect taxes: 18%
• Union excise duties: 5%
• Customs duties: 4%
• Non-tax receipts (dividends, profits, fees): 9%
• Non-debt capital receipts: 1%
• Borrowings & other liabilities: 24%

The government’s total borrowings for the year are set at Rs 15.69 lakh crore, slightly lower than Rs 16.45 lakh crore in the revised estimates for 2024-25, indicating a move towards fiscal consolidation.

Where the money goes

• Interest payments: 20%
• States' share of taxes and duties: 22%
• Defence expenditure: 8%
• Major subsidies (food, fertiliser, fuel): 6%
• Finance Commission transfers & other grants: 8%
• Pensions: 4%
• Centrally Sponsored Schemes: 8%
• Central sector schemes (excluding defence & subsidies): 16%
• Other expenditure: 8%

Interest payments continue to be the single largest expense, accounting for Rs 12.76 lakh crore, reflecting the high debt servicing burden. The states’ share of taxes and duties, at Rs 14.22 lakh crore, remains a crucial component of devolution.

Defence spending has been raised to Rs 4.91 lakh crore, up from Rs 4.56 lakh crore in the revised estimates for 2024-25. Major subsidies for food, fertiliser, and petroleum total Rs 4.26 lakh crore, with food subsidies at Rs 2.03 lakh crore, fertiliser at Rs 1.68 lakh crore, and petroleum at Rs 12,100 crore.

With capital expenditure projected at Rs 11.21 lakh crore, the government continues to prioritise infrastructure spending, aiming to boost economic growth while maintaining fiscal discipline.