India’s budget for people with disabilities is generous – but remains underutilised

The Union Budget 2026-’27 presented on February 1 has explicitly recognised persons with disabilities as a distinct constituency, and enhanced allocations for two key schemes.

For the first time, disability is acknowledged as a category beyond being included as an “other marginalised group” in two new schemes under the Department of Empowerment of Persons with Disabilities and in an emphasis on mental health infrastructure.

But there is a familiar paradox: despite generous allocations, India’s disability budgeting is constrained by chronic underutilisation, weak institutional capacity and fragmented accountability.

More money

For 2026-’27, the Department of Empowerment of Persons with Disabilities has been allocated Rs 1,670 crore, an increase of nearly 30% over the revised estimates of 2025-’26, amounting to approximately Rs 380 crore more. Revised estimates are closer to the expenditure, unlike budget estimates which are proposed expenditures.

This increase has largely been driven by two new flagship schemes: the Rs 200-crore Divyangjan Kaushal Yojana, aimed at industry-aligned skill development, and the Rs 100-crore Divyang Sahara Yojana for assistive devices. Together, these schemes account for 79% of the increase, signalling the government’s emphasis on employability and technological support.

However, allocations for existing schemes, administrative expenses and institutions for the disabled have increased by only about Rs 80 crore. The department has consistently been unable to fully utilise funds in previous years, which throws into sharp relief the skewed allocations for projects over the machinery to implement them.

In 2024-’25, the Department of Empowerment of Persons with Disabilities spent 88% of the budget estimates, and returned nearly Rs 141 crore to the consolidated fund due to implementation bottlenecks.

Reports of the Parliamentary Standing Committee on Social Justice and Empowerment have repeatedly flagged this trend.

In the report presented to Parliament in March 2025, the panel pointed out persistent underutilisation across key schemes, like the scheme to subsidise assistive devices such as wheelchairs, hearing aids, and prosthetics.

Similarly, the committee noted a marked decrease in 2024-’25 in the expenditure on the District Disability Rehabilitation Scheme: the allocation was allocated Rs 165 crore, which was revised to 139 crore but only 87.95 crore was actually spent. The scheme supports disability rehabilitation services, and scholarships for children with disabilities.

The problem, therefore, is a failure in translating allocations into outcomes.

Undermining schemes

The Scheme for Implementation of the Rights of Persons with Disabilities Act exemplifies this problem. It is an umbrella framework that supports interventions such as the disability identity card, barrier-free infrastructure, digital accessibility and sensitisation initiatives.

In 2024-25, the scheme was allocated Rs 135.33 crore but only Rs 43.90 crore was actually spent, as of March 2025. In response to the committee’s queries on the low expenditure, the department said that the scheme is demand-driven and grants are released based on proposals from state governments with documentary evidence, like utilisation certificates for money from previous years.

Despite a revised estimate allocation of Rs 200 crore in 2025-’26, marking a rare mid-year increase reflecting rising demand, the allocation for 2026-’27 has been reduced to Rs 125 crore – a decrease of nearly 38%.

The Department of Empowerment of Persons with Disabilities has previously acknowledged that funds under the scheme were unused because several states were unable to adopt the treasury single account system required to disburse funds.

This has meant penalising the scheme by reducing allocations instead of resolving administrative bottlenecks. It contradicts the government’s stated policy priorities and risks weakening the foundational architecture on which disability inclusion depends.

Undermining the Scheme for Implementation of the Rights of Persons with Disabilities Act has cascading effects as it supports processes that enable access to education, employment and social protection.

Institutional support

Concerns are even sharper when examining allocations for statutory institutions, like the Office of the Chief Commissioner for Persons with Disabilities.

It is the principal enforcement and grievance redressal authority under the Rights of Persons with Disabilities Act, 2016, and has been allocated just Rs 20 lakh, unchanged from the previous year. This amount must cover staffing, infrastructure, hearings, monitoring and follow-up actions.

The inadequacy is stark. In 2025 alone, the commissioner’s office imposed penalties on nearly 100 establishments for violating digital accessibility norms. Effective enforcement requires resources for investigations, hearings and compliance monitoring. The unchanged allocation raises serious concerns about the seriousness of enforcing disability rights.

Similarly, the government has announced a new National Institute of Mental Health and Neuro Sciences, or NIMHANS, in north India, but failed to provide allocations in the budget. Proposing a new institute acknowledges long-standing access barriers, particularly the high out-of-pocket costs faced by persons with psychosocial disabilities who must travel to Bengaluru for specialised assessments.

But there is no corresponding line-item allocation under the Ministry of Health. Unlike new All India Institutes of Medical Science, which are backed by explicit budgetary provisions, the absence of earmarked funds for the mental health institution casts doubt on timelines and the intention to implement announcements.

Political economy of disability

This cycle of underallocation and underutilisation shows that actually changing the lives of people with disabilities is a low political priority that has little to do with inadequate funding. Rights guaranteed under the law are reduced to discretionary welfare that depends on bureaucratic efficiency across multiple levels of the government.

As seen with the Scheme for Implementation of the Rights of Persons with Disabilities Act, centre-state dynamics can further dilute accountability. The central government controls funding while states manage implementation of schemes and policies. Delays and failures are routinely attributed to this division of responsibility, with persons with disabilities caught in between.

The Standing Committee on Social Justice and Empowerment, in its December report, had observed that disability policy in India suffers less from a lack of knowledge about required interventions and more from insufficient political will to execute them.

The disability allocations in the Budget 2026-27 hold real potential. The increase in funding and emphasis on skills, assistive technology and mental health signal intent that could prove transformative. However, real outcomes will depend on making the monetary allocations actually count.

Shashank Pandey is a lawyer and the founder of politics and disability forum.