As Finance Minister Nirmala Sitharaman prepares to present her ninth consecutive Union Budget, expectations from the education sector remain high. The upcoming Budget 2026 will also be the second full-fledged
Budget of the third term of the Narendra Modi-led government.
In the previous Union Budget, the government earmarked Rs 1,28,650 crore for the Ministry of Education, marking a 6.22 percent rise over the earlier year, with Rs 78,572 crore allocated for school education and Rs 50,078 crore for higher education.
With education allocations steadily rising in recent years, policymakers, academicians, school leaders and industry players are now looking for a sharper focus on quality, outcomes and long-term capacity building.
Higher Education, Research And Retaining Talent
One of the major expectations ahead of Budget 2026 is focused investment in strengthening India’s higher education ecosystem to curb the growing outflow of students to foreign universities. Prof. V. Ramgopal Rao, Group Vice-Chancellor, BITS Pilani, stressed that expanding capacity alone will not address this challenge.
“A critical priority for the budget needs to be in the scaling up of India’s higher education institutions to reduce the steady outflow of talented students to overseas universities. This is not merely about increasing capacity but about building depth and quality at scale. World class teaching, modern research infrastructure, interdisciplinary programmes, and globally competitive faculty must be available within India. When our universities offer credible pathways for advanced learning, research, and entrepreneurship, students will choose to stay back, and increasingly, global talent will choose to come to India. Strengthening high performing institutions and enabling them to grow with autonomy and flexibility is therefore central to retaining talent and building national capability,” he said.
He also highlighted the need for a stronger translational research ecosystem that can bridge the gap between academia and industry.
“Equally important is the need to strengthen translational research through dedicated schemes and purpose built institutions that bridge academia and industry. India requires institutional mechanisms that can take ideas from the laboratory through validation, prototyping, and scale up, while working closely with industry and startups. These bridging institutions must combine scientific depth, engineering capability, and commercial orientation, supported by patient capital and clear governance structures. Well designed translational research frameworks can de risk early stage innovation, accelerate industry adoption, and ensure that publicly funded research leads to tangible economic and societal outcomes,” Prof. Rao added.
Aligning Education With The Changing World Of Work
With rapid changes in job roles and skill requirements, education leaders are calling for deeper alignment between academia and industry. Fr. Nelson A. D’Silva, S.J., Acting Director of XLRI Delhi-NCR, said higher education must remain responsive to real-world needs.
“Higher education is increasingly being asked to respond to a rapidly changing world of work. The previous Budget acknowledged this shift through its focus on skills and capacity building. Going into Budget 2026, there is an opportunity to further strengthen experiential learning, faculty development and meaningful industry engagement. When education remains closely aligned with real-world contexts, it equips graduates not only for employment, but for leadership and responsible decision-making over the long term,” he said.
Industry-academia collaboration, faculty training and experiential learning models are expected to remain key demands, particularly as employers look for job-ready graduates rather than degree holders alone.
Focus On School Education, Teachers And Infrastructure
School education leaders, meanwhile, are looking for sustained investment in teaching quality, infrastructure and inclusion. Shweta Sastri, Managing Director of Canadian International School, Bangalore, said holistic development and equity must remain central to budgetary planning.
“As the Union Budget approaches, we look ahead with optimism that education will continue to receive focused, future-oriented attention. Nurturing well-rounded learners requires strengthening teaching quality, infrastructure, and innovation, with holistic development remaining central. Sustained investment in teacher training, modern learning spaces, and technology-enabled classrooms is essential to fostering inclusion, curiosity, and critical thinking,” she said.
She added that empowering teachers through continuous professional development and digital upskilling must be a priority, as educators form the backbone of the system. A higher allocation, she noted, could support the setting up of new K–12 schools, improve government school infrastructure, bridge the urban-rural education gap and strengthen STEM education from an early stage. Sastri also pointed to the need for easing financial pressure on families by lowering interest rates on education loans and encouraging international partnerships to strengthen India’s global education standing.
Skilling, AI And The Demographic Opportunity
With nearly half of India’s population under the age of 25, skilling and employability are expected to dominate Budget 2026 discussions. Ambrish Sinha, CEO of UNext Learning, the edtech arm of Manipal, said the focus must now shift from access to impact.
“The upcoming Union Budget 2026 presents a pivotal opportunity to evolve India’s education narrative from accessibility to impact. Nearly 50% of the nation’s population is under 25. Our expectations are centered around converting this demographic dividend into a globally competent talent engine,” he said.
Sinha expressed hope for stronger industry-academia collaboration to support Make in India initiatives with skilled talent, especially in Tier 2 and Tier 3 cities where global capability centres are expanding. He also pointed to the ₹500 crore allocation for the AI Centre of Excellence last year and said the coming Budget should focus on execution and outcomes.
Similarly, Abhimanyu Saxena, Co-founder of Scaler, called for skilling to be placed at the heart of India’s growth strategy. “Building on the positive momentum created by recent policy measures, such as the focus on AI Centres of Excellence, industry-linked skilling initiatives, and large-scale internship programmes, the upcoming Union Budget must place skilling firmly at the centre of India’s growth agenda,” he said.
He emphasised the need for incentives for corporate investment in reskilling, tax benefits for individuals pursuing professional upskilling and increased spending on digital infrastructure to bridge the digital divide. Saxena also highlighted the expectations of Gen Z workers, calling for affordable education financing, support for gig economy pathways and financial flexibility to help young professionals invest in their careers.
As Budget 2026 approaches, the education sector is clearly seeking not just higher allocations, but sharper focus on quality, outcomes and long-term reforms that can support India’s ambition of becoming a global talent hub.
