Budget 2025: India's education sector to have a digital and skilling transformation?

The National Education Policy 2020 sets the overarching framework for transforming our education system. While the policy provides overall guidelines, the Government is now focused on developing micro-level strategies and interventions for improving governance through “light-but-tight” regulations and, at the same time, improving employability of students.

Union Budget 2024-25 allocated ₹1.48 lakh crore for education, skilling and employment. Schemes such as Samagra Shiksha Abhiyan, PM-POSHAN, PM-SHRI, STARS and NATS received significant increases. Significant allocations were also made to new initiatives such as PM Internship Scheme, Centre of Excellence in Artificial Intelligence and National Digital University, emphasizing on a focus on practical training and digital education.

It is expected that Budget 2025-26 will further the initiatives taken for digital learning, skilling, technical education and capacity building of teachers. The budget is also expected to focus on new themes such as internationalization in education, research and development and teaching infrastructure.



Aligned to the Government’s vision of establishing India as a Global Education Hub, there may be increased allocation to Study in India Scholarship. The budget could also focus on increasing the involvement of international faculty at state universities through the GIAN scheme. Additionally, with the Government’s focus on Indian Knowledge Systems (IKS), new allocations may be seen to support academic collaboration between institutions specializing in IKS such as Central Tribal University and Sanskrit Universities.

After the increase in funding for World Class Institutions in Budget 2024-25, the Institutes of Eminance (IoE) programme may also receive increased allocation with the objective of creating more globally competitive institutions. With only 12 institutions granted an IoE status against an initial target of 20, there is significant potential for increased budgetary allocations in this area.

With the growing focus on online learning, significant allocations may be expected towards some of the key enablers such as digital infrastructure in institutions, incentives for development of online educational learning resources and innovative technologies in the EdTech space. Expansion of the National Knowledge Network (NKN) is critical to address digital infrastructure related issues in remote areas and to ensure institutions are prepared for digital education. Incentivizing the creation of online educational resources in vernacular languages will make learning more accessible to diverse groups. Allocations are also expected towards strengthening of the Distance Education Bureau, which will help maintain standards and improve programme quality.


The Government has prioritized research and development, especially in emerging technologies such as AI/ML and wafer manufacturing. Budget 2024-25 had significant allocations towards setting up of the Centre of Excellence in Artificial Intelligence. Increased allocations for Centre of Excellences in these sectors are expected this year too. To foster research collaboration between top central and state government institutions, schemes similar to SPARC5, which foster academic collaboration among top-ranked foreign and Indian Higher Education Institutions (HEIs), may be introduced. With the establishment of the Anusandhan National Research Foundation (ANRF), the university-led research model may be reintroduced, focusing on funding for multidisciplinary research. Furthermore, financial incentives for PhD scholars and researchers may be expanded through increased allocations to the PM’s Research Fellowship Scheme and an enhancement in the number of Junior Research Fellowships for UGC-NET/CSIR-NET qualified students.

With a focus on promoting higher education in regional languages and the launch of Anuvadini AI by the All India Council for Technical Education (AICTE), enhanced allocation may be seen towards developing a specialized team to design curriculum in local languages and translate existing course work into regional languages. Six states have launched an MBBS program in Hindi, and similar trends might be seen in other courses as well.

Higher education infrastructure at the grass-roots level has received a significant boost through initiatives like PM-USHA and RUSA. These allocations have been critical in increasing the female gross enrolment ratio (GER) across states. But there is still significant disparity between southern and eastern states in terms of college density (colleges available per lakh of eligible population). Enhanced allocations under PM-USHA may help address this regional disparity. Additionally, to attract international students to India, schemes encouraging public private partnership in building world-class hostels may also be introduced.


With a focus on improving foundational literacy and numeracy, enhanced allocation may be seen in the National Initiative for School Heads’ and Teachers’ Holistic Advancement (NISHTHA) programme, to positively impact learning outcomes and promote NEP implementation at the school level. With doubling of the allocations under MERITE and MMTTP last year, teacher training is expected to receive significant allocation this year as well. The Nurturing Future Leaders Programme may receive significant allocations considering the focus on strengthening administrators in state public universities. In the absence of a standardized system for training teachers at the central and state government levels, allocations are also expected towards the creation of a Centralized Teachers Training Framework and Monitoring System in line with the Vidya Samiksha Kendras (VSK). With recent studies highlighting the low number of female teachers in higher education STEM subjects, schemes providing financial incentives for engagement of female teachers may be introduced.

In vocational education, the PM Internship Scheme has garnered significant interest among students, with 6,21,000 applications received for 1,25,0006 internship opportunities in the pilot phase. It may receive increased allocations to achieve the target of training 1 crore youth by 2028-29. Further, to improve the adoption of Apprenticeship Embedded Degree Programmes, enhanced allocations may be seen in the NATS. The introduction of targeted schemes and increased budgetary allocations in crucial areas such as Early Childhood Care and Education (ECCE), teacher training and the development of skill-based courses for K-12 students will be critical to improve students’ preparedness for the future.

(The article has been written by Suchindra Kumar, Partner and Leader Education, PwC India)