Budget 2026: What India’s Education Economy Needs — A Comparative Snapshot
India’s education sector entered the Union Budget 2025 with unprecedented anticipation. The government’s announcement of a ₹1.28 lakh crore allocation to the Ministry of Education was widely applauded for signalling renewed investment at a time when universities struggled with outdated laboratories, shrinking research output and a widening skills gap. Among the headline commitments were a network of AI Centres, expanded IIT infrastructure, thousands of skilling hubs and tinkering labs, and digital learning initiatives aimed at narrowing urban–rural divides.But a year on, the reality has been more ambivalent. While the rhetoric of Viksit Bharat — a future-ready India powered by education and innovation — has animated policy circles, on-the-ground impact has been uneven. Many institutions reported that funds committed for research infrastructure remained stalled; digital platforms intended to democratise high-quality learning saw patchy adoption; and the expansion of skilling ecosystems struggled to translate into measurable improvements in employability. Meanwhile, the public expenditure on education has remained stubbornly modest at just over 4 per cent of GDP, well short of the long-standing 6 per cent target that economists and educators alike have championed.Critics argue that Budget 2025 looked good on paper but lacked the structural reforms necessary to ensure accountability, measurable outcomes and equitable distribution — particularly across Tier 2 and Tier 3 cities where educational backwardness and opportunity gaps are most acute. The result has been a cycle in which aspirational initiatives generate headlines but fall short of tackling deep-rooted flaws: weak research ecosystems, limited industry engagement, faculty shortages, and the persistent mismatch between what students learn and what the job market demands.
As the government prepares for Budget 2026–27, the education industry is urging a sharper focus — not just on bigger numbers, but on better architecture. Leaders from universities, professional bodies and skilling organisations contend that past promises must translate into process-driven fixes if India’s demographic dividend is to become a developmental reality rather than a looming liability.
From access to advantage: Why universities want to be seen as economic engines
For many institutional leaders, the debate is no longer about expansion alone, but about positioning universities as drivers of economic growth and social mobility. Vinayak V. Bhosale, Trustee, Sanjay Ghodawat University, frames Budget 2026 as a potential inflexion point. He argues that universities must be recognised as “catalysts for economic growth and social mobility”, particularly beyond India’s metros.
Bhosale highlights the urgent need for modern research infrastructure, expanded scholarship support for meritorious students from marginalised communities in Tier 2 and Tier 3 cities, and dedicated funding mechanisms for innovation hubs that can connect academia with industry demand. He also calls for competitive faculty grants and international exchange programmes to elevate Indian institutions to global benchmarks.
As India aspires to be a knowledge economy, he notes, “strategic investments in digital learning platforms, skill development centres, and interdisciplinary research initiatives will determine our competitive edge.”
Private universities educate the majority, but are still treated as outsiders
Despite educating a significant proportion of India’s students, private universities continue to seek formal recognition as equal partners in nation-building. Prof (Dr) Amit Jain, President and Vice Chancellor, Amity University, underlines the need for policy realism. “Private universities today educate a significant proportion of India’s students,” he says, calling for greater collaboration rather than segmentation.
Jain expects the Budget to focus on education quality, infrastructure strengthening, and alignment with future skill requirements, with particular emphasis on digital learning ecosystems, research capacity and industry-linked programmes. He also points to an opportunity to strengthen research pipelines by enabling collaborative projects across public and private institutions, supported through agencies such as DST, DBT, ICMR and ICSSR. Such an approach, he believes, would enhance India’s global academic competitiveness while delivering outcomes at scale.
Viksit Bharat or Skilled Bharat? The missing link is execution. While national narratives increasingly link education to economic transformation, implementation gaps remain glaring. Dr Santosh Narayankhedkar, Dean of Academics, Somaiya Vidyavihar University, Mumbai, argues that Budget 2026 must better align investment with the visions of Viksit Bharat and Startup India. He calls for enhanced funding for public education, university-led research, digital infrastructure and faculty development, alongside deeper integration of higher education with skilling, innovation and entrepreneurship.
Importantly, Narayankhedkar also emphasises the often-overlooked dimension of value-based education, stressing the need to nurture ethical, responsible citizens — not just job-ready graduates — under the framework of NEP 2020.
Professional education wants global mobility, not just local jobs
As industries evolve under the pressures of AI, sustainability and global compliance, professional education bodies are urging the government to think beyond conventional degrees.
Md Sajid Khan, Director – India, ACCA, highlights how the accounting and finance profession is being reshaped by digitalisation, sustainability reporting and AI-driven analytics. He hopes Budget 2026 will prioritise high-quality professional education aligned with global standards, supported by stronger industry–academia collaboration.
“Incentives for skill-based learning, digital upskilling, and global mobility of Indian professionals will be crucial,” Khan notes, arguing that such measures can help position India as a hub for world-class finance and accounting talent, while addressing persistent skills gaps.
Tier 2 and Tier 3 India – Where the skills war will be won or lost. Prof Supriya Pattanayak, Vice Chancellor, Centurion University of Technology and Management, Odisha calls for a 20 per cent increase in funding — at least ₹10,000 crore — for skills-embedded higher education, aimed at developing AI-powered, industry-synchronised experiential labs across 500 Tier 2 and Tier 3 institutions. According to Pattanayak, such investments are essential to scale hands-on training in deep technology, climate-resilient agriculture and allied health sciences.
She also proposes tax incentives and simplified CSR routes for industry–academia partnerships, potentially unlocking ₹5,000 crore annually for structured apprenticeships, particularly benefiting rural and first-generation learners. Her call to mandate employer-sponsored health coverage for contractual and gig educators adds a rare focus on academic workforce resilience.
AI got the headlines in 2025 — but can it deliver learning outcomes in 2026?
The previous Budget’s emphasis on AI-led learning raised expectations across the education ecosystem. Anil Kapasi, Managing Director and Co-Founder, Arihant Academy, notes that the ₹1.28 lakh crore allocation to the Ministry of Education in Budget 2025 signalled a forward-looking approach, with initiatives such as AI Centres, Atal Tinkering Labs, skilling hubs and expanded IIT infrastructure.
Looking ahead, Kapasi expects Budget 2026 to deepen its focus on skill-based education, digital literacy and teacher empowerment, while addressing infrastructure gaps and strengthening industry-academia linkages. He also stresses the importance of continued support for flagship schemes such as Samagra Shiksha, PM-POSHAN and PM SHRI, alongside a broader commitment to holistic student development, including arts, sports and well-being.
Apprenticeships: India’s most underrated economic lever
If there is one area where consensus is growing, it is apprenticeships — yet policy alignment remains fragmented. Pravesh Dudani, Founder and Chancellor, Medhavi Skills University, argues that Budget 2026 must move from intent to impact by backing education and skilling with targeted financial allocations. He calls for increased funding for apprenticeship ecosystems, flexible learning pathways, recognition of prior learning, faculty upskilling and responsible AI integration, supported by digital platforms such as DIKSHA and SWAYAM.
Echoing this urgency, Dr Nipun Sharma, CEO, TeamLease Degree Apprenticeship, describes apprenticeships as a core driver of workforce and economic growth, enabling “learning by doing” while improving socio-economic mobility.
Sharma advocates targeted tax incentives for MSMEs, additional support for women apprentices, and clearer alignment between NAPS and NATS frameworks. He also calls for mandatory disclosure of apprenticeship engagement in annual returns to improve accountability and long-term workforce planning.
The budget question that refuses to go away
As India prepares for Budget 2026–27, the education sector’s message is clear: incremental increases will no longer suffice. What is being demanded is strategic, outcome-driven investment, sharper policy alignment, and the political will to treat education not as social expenditure alone, but as core national infrastructure.
Whether Budget 2026 rises to that challenge may well determine if India’s demographic dividend becomes a historic advantage — or a missed opportunity.
