The Department of Telecommunications under the Ministry of Communications is responsible for promotion and regulation of the telecom sector.  The Department also administers several public sector undertakings involved in providing telecommunication services, consultancy, and equipment manufacturing.   This note examines the allocation to the Department in 2025-26, trends in expenditure over the last few years, and discusses certain key issues in the sector.

Overview of Finances

In 2025-26, the Department has been allocated Rs 81,005 crore, which is 1.6% of the total budget of the central government.[i]   The allocation to the Department in 2025-26 is estimated to decrease by 35% from the revised estimate of 2024-25 (Table 1).   This decrease is mainly due to a lower allocation towards capital infusion in BSNL.  Since 2019, the central government has been implementing a revival plan to improve the financial health of BSNL and MTNL (see page 2 for more details).  

Table 1: Allocation to the Department of Telecommunications (Rs crore)

	2023-24 Actuals	2024-25 BE	2024-25 RE	2025-26   BE
Revenue	27,504	27,419	49,413	29,220
Capital	59,380	84,496	74,995	51,785
Total	86,884	1,11,915	1,24,409	81,005

Note: RE: Revised Estimates; BE: Budget Estimates

Sources: Demand No. 13, Expenditure Budget, Union Budget 2025-26; PRS.  

In 2024-25, spending by the Department is estimated to be 11% higher than budgeted.  This is mainly due to additional transfers to the Universal Service Obligation Fund (USOF).   USOF is a reserve fund to provide for telecom services in underserved areas and encourage R&D.  It is being financed through a levy on service providers.   Also, Rs 3,822 crore has been allocated at the revised stage towards implementation of voluntary retirement scheme for BSNL and MTNL.  A token provision of one lakh rupees was made towards this at the budget stage.

Trend in Expenditure

Between 2014-15 and 2025-26, the expenditure of the Department is estimated to increase at a CAGR of 20%.  A significant increase from 2022-23 is mainly due to expenditure towards revival plan for BSNL/MTNL (Figure 1).  Over the last 10 years, the actual expenditure by the Department has varied significantly as compared to the budget estimates.