Budget 2025: Does Indian education system need a new lesson plan?

Ahead of upcoming budget of Modi 3.0, all eyes are on Nirmala Sitharaman on whether public expenditure on education in India would come closer to the recommended level of 6% of GDP, as envisaged by the 1968 Policy, reiterated in the Policy of 1986, and which was further reaffirmed in the 1992 review of the Policy.

As per Economic Survey, expenditure on education has grown at a CAGR of 9.4 per cent- a tad below the rate of nominal GDP growth.

What is education sector expecting?

The Union Budget is poised to transform the education system by 2025, focusing on internationalization, incorporation, and accessibility. It aims to enhance partnerships with Indian and international universities, boost digital infrastructure for smart learning, and provide financial aid for students studying abroad. These initiatives are crucial for ensuring equitable access to quality education across diverse backgrounds. By increasing scholarships and grants, the government can further promote academic growth and elevate India’s global educational standing, said Rahul Subramaniam, Co-founder, Athena Education (Education)

"The allocation of ?1.48 lakh crore in the last Budget for education, employment, and skilling was a commendable step in strengthening India’s position as a global talent hub. As we approach the next Union Budget, we are hopeful that a significant share will go towards education, particularly for teacher training. Investing in our educators is key to building a skilled and inclusive workforce ready to tackle future challenges.Such investments will boost both foundational and higher education, giving our youth the skills they need to excel in a competitive job market. These steps will also ensure quality education reaches every corner of the country, helping bridge the digital divide and bringing the benefits of technology to all students," said Kavita Kerawalla, Vice Chairperson of VIBGYOR Group of Schools.

"We believe the upcoming Budget should focus on building strong digital infrastructure to support blended learning, narrow the rural-urban gap, and scale technology-driven education programs. This will help us thrive in the digital era, preparing students for a tech-focused world. These initiatives won’t just empower our youth—they will also drive India’s journey to becoming a developed nation by 2047. We hope to see a focus on modernising education to match industry needs while encouraging the growth of the EdTech sector," added Kerawalla.

What happened in last budget?

For India's education sector, the budget presented by Finance minister Nirmala Sitharaman on July 23 turned out to be mixed bag. Side by side with budgetary boosts for a number of areas, there also came deep disappointments for a number of others.

Announced allocations include substantial increases in some areas, such as an uplift for the PM Poshan scheme, along with government support for student loans up to Rs 10 lakh for higher education in domestic institutions. Meanwhile, some other segments face budget cuts.

The government plans to upgrade 1,000 Industrial Training Institutes (ITIs), ensuring their courses align with industry skill requirements. Additionally, a new initiative aims to provide internships to one crore youth. Interns will receive a stipend of Rs 5,000 and a one-time assistance of Rs 6,000. Companies will cover the costs for this initiative through their corporate social responsibility (CSR) funds.

The PM Poshan scheme received a significant boost of over Rs 800 crore. Its allocation increased from Rs 11,600 crore in 2023-24 to Rs 12,467.4 crore in 2024-25. This increase aims to enhance nutritional support for school children, ensuring their health and well-being.

The Centre's total allocation for education, employment, and skill development stands at Rs 1.5 lakh crore. This includes financial assistance for student loans, digital learning, and skill development initiatives. The government will provide loans up to Rs 10 lakh for higher education in domestic institutions, offering e-vouchers with a 3% interest subvention to one lakh students annually.

Grants for central universities saw a significant increase of over Rs 4,000 crore, bringing the allocation to Rs 15,928 crore for 2024-25. Additionally, the Finance Minister announced the establishment of a new medical college in Bihar, enhancing the region's healthcare education infrastructure.

Digital learning and artificial intelligence (AI) also received significant attention. The budget for Centres of Excellence (CoE) in AI was increased from Rs 35 crore to Rs 255 crore, underscoring the government's commitment to advancing technology-driven education.

Student aid for higher education saw an enhancement of Rs 493 crore, increasing from Rs 1,320 crore to Rs 1,813.2 crore. Furthermore, funding for research, innovation, and apprenticeships was prioritized. Research funding increased by Rs 162 crore, from Rs 193.4 crore to Rs 355 crore. The National Apprenticeship Training Scheme saw a boost from Rs 460 crore to Rs 600 crore.

On the contrary, the budget for education saw a reduction of Rs 9,090.4 crore from the revised estimate of 2023-24. This brought the allocation down to Rs 1,20,627.8 crore for 2024-25. Despite a 6.8% increase from the previous year's budget estimate, it reflects a reduction when considering the revised figures.