Budget 2026 redraws education roadmap with girls’ hostels, AI and skills focus

New Delhi: Finance Minister Nirmala Sitharaman on Sunday placed education and skills at the centre of India’s long-term growth strategy, announcing a series of measures aimed at tightening the link between education, employment and enterprise in the Union Budget 2026–27.

In her Budget speech, Sitharaman said, "I propose to set up a High-Powered ‘Education to Employment and Enterprise’ Standing Committee to recommend measures that focus on the Services Sector as a core driver of Viksit Bharat. This will make us a global leader in services, with a 10% global share by 2047. The Committee will prioritise areas to optimise the potential for growth, employment and exports. They will also assess the impact of emerging technologies, including AI, on jobs and skill requirements and propose measures thereof."

Girls’ hostels in every district


Addressing gender-specific challenges in higher education, especially in STEM institutions where long study hours and laboratory work remain a constraint, the finance minister announced that one girls’ hostel will be established in every district, supported through viability gap funding or capital support.

AI, skilling and workforce reforms

Signalling a sharper pivot towards technology-led education reforms, the government said the committee would recommend embedding AI in curricula from the school level onwards, upgrading State Councils of Educational Research and Training (SCERTs) for teacher training, and proposing frameworks for upskilling and reskilling engineers and technology professionals in AI and emerging technologies.

Other focus areas include AI-enabled matching of workers with jobs and training opportunities, steps to make the informal workforce visible and verifiable, and measures to attract skilled diaspora and foreign talent to India.

Boost for medical education and health jobs

To strengthen healthcare-linked education and employment, Sitharaman announced a scheme to support states in setting up five Regional Medical Hubs, in partnership with the private sector, to promote India as a global medical tourism destination.

These hubs will function as integrated healthcare complexes, combining medical education, research and clinical facilities, along with AYUSH centres, medical value tourism facilitation centres, diagnostics, post-care and rehabilitation infrastructure. The initiative is expected to create diverse employment opportunities for doctors and allied health professionals.

Relief on overseas education costs

In a move that could ease the cost burden for students and families, Sitharaman proposed to reduce the Tax Collected at Source (TCS) under the Liberalised Remittance Scheme (LRS) from 5% to 2% for remittances made towards education and medical purposes.

The Union Ministry of Education’s allocation for 2026–27 builds on the government’s stated focus on school education, higher education and skills, even as overall public spending on education has historically remained below the 6% of GDP target outlined in the National Education Policy (NEP) 2020.