Budget 2025 Expectations for Education Sector: The Union Budget 2025-26, set to be presented by Finance Minister Nirmala Sitharaman on February 1, carries high expectations from the education sector. Academics and industry leaders are urging the government to prioritise investments in STAM-based (Science, Technology, Arts, Mathematics) research, micro-credential courses, and enhanced financial support for management institutions.

Calls for tax relief on educational expenses for low-income students, increased funding for school infrastructure, and stronger backing for health management education further highlight key areas of focus.

Last year’s budget allocated Rs 1.12 lakh crore to education, a 13 per cent increase from the previous year. However, experts argue that additional investments are necessary to bridge skill gaps, expand digital learning, and improve access to quality education.

Here’s a look at how academics want this year’s budget to be:

To stem brain drain, which sees over 8 lakh students studying abroad at a cost of nearly $70 billion annually, professor Ramgopal Rao, vice-chancellor of Birla Institute of Technology and Science Pilani (BITS Pilani), stresses the need for making Indian institutions globally competitive. He calls for increased funding to establish overseas campuses, greater autonomy for universities, and outcome-based funding models tied to research output. “Strengthening faculty quality and research ecosystems through substantial grants and philanthropic incentives will help bridge the gap between elite and Tier-2 colleges, creating a dynamic higher education system that retains top talent,” he added.

Professor Ram Kumar Kakani, Director of IIM Raipur, reiterated that India currently spends 4.6 per cent of its Gross Domestic Product (GDP) on education and has urged the government to move towards the historical target of 6 per cent as recommended by the Kothari Commission (1964-66). He also emphasised the need for equitable financial support for Indian Institute of Managements (IIMs), which currently lack direct government backing compared to Indian Institute of Technology (IITs). “Increased funding for global collaborations, relaxed regulations for foreign partnerships, and greater investment in STAM research and micro-credential courses would enhance India’s innovation landscape and create globally competitive talent,” he said.

Prateek Maheshwari, co-founder of ed-tech platform Physicswallah, calls for a 100 per cent GST exemption on educational expenses for students from Below Poverty Line (BPL) and Low-Income Group (LIG) families. He highlighted that the current 18 per cent GST on higher education and online learning is a major burden, especially when countries like Switzerland offer free education and China taxes it at just 6 per cent. “High tax rates contradict India’s goal of 50 per cent GER in higher education by 2035, creating access barriers. To make education more affordable, rationalising student loan interest rates and providing interest-free loans for disadvantaged students is essential,” he added.

Professor Debashis Chatterjee, director of IIM Kozhikode, stressed the importance of increased funding for Startup India and the Atal Innovation Mission (AIM). He advocated for a stronger focus on Industry 4.0 skills such as AI, ML, and blockchain to align India’s workforce with global trends. Additionally, he highlighted the need for expanded scholarships and subsidised education loans to improve access to quality education. “Strengthening the Rashtriya Uchchatar Shiksha Abhiyan (RUSA) and providing special financial packages for Tier 2 and Tier 3 institutions would help bridge the urban-rural divide,” he said.

School infrastructure and digital education are also key priorities, according to Tr. Chaitanya Dev Singh, national president of Round Table India (an association focussing on building classrooms and providing essential facilities to underprivileged schools). He pointed out that the Rs 37,500 crore allocated for Samagra Shiksha Abhiyan and Rs 73,008 crore for the Department of School Education in 2024 have already contributed to improving education quality. However, he urged further investment to accelerate technology integration, bridge the digital divide, and align with NEP 2020 goals, positioning India as a global education leader.

Meenu Kanwar, principal of Amity International School, Mayur Vihar, emphasised that school infrastructure development should be prioritised through lease-based models, reduced GST on affiliation services, and sustainability incentives.

Dr Ruchi Arora of BIMTECH underscored the need for stronger public-private partnerships to address India’s vast educational potential, with 580 million youth but only 51.25 per cent employable graduates. She advocated for digital learning expansion, skill-based education, and financial support for international students to establish India as a global education hub.

Health management education is another critical focus area, according to Dr P R Sodani, president of IIHMR University, Jaipur. Sodani has called for strategic investments in skill-based learning, digital capabilities, and global partnerships to strengthen the sector. He stressed the need for greater collaboration between industry, academia, and start-ups to accelerate digital innovation and improve health outcomes. A digital health incentive plan could support the Ayushman Bharat Digital Mission, enhance data security, implement electronic health records, and upskill technical resources, Sodani said. Targeted investments in holistic health services would position India as a leader in high-quality health management education, he remarked.

Piyush Kumar, the regional director of  South Asia, Canada and Latin America (LATAM), IDP Education, hopes that the government announces measures to reduce the financial burden that makes foreign education more affordable. Lowering remittance fees, making education loans cheaper and expanding scholarship programmes to support deserving and underprivileged students would help more meritorious students build promising careers.

A well-calibrated budget increase for education and research will drive innovation, empower youth, and solidify India’s position as a global knowledge leader. As the nation looks ahead to the 2025-26 budget, progressive policy measures and increased investments will be key to transforming India’s education landscape into an inclusive, future-ready, and globally competitive learning ecosystem.

Mridusmita Deka covers education and has worked with the Careers360 previously. She is an alumnus of Gauhati University and Dibrugarh University. ... Read More