Education is vital for human development, enhancing quality of life and creating skilled manpower for the economy. It empowers the poor to be self-reliant and contribute to national growth. As a concurrent subject, it involves both the Union and State Governments. According to the National Policy on Education (1986), the Union Government ensures education’s national character, quality, and standards, monitors manpower needs, supports research, addresses international educational aspects, and promotes excellence at all levels.

While presenting the Union Budget on February 1, 2025, Finance Minister Nirmala Sitharaman announced a range of bold initiatives designed to transform India’s education sector. The budget highlights the government’s dedication to promoting innovation, strengthening digital infrastructure, and preparing the youth with skills for the future. In this regard, ObserveNow interacted with industry experts to know their perspectives on the recently announced budget.

The Ministry of Education has received a total allocation of ₹128,650 crore, marking a 6.22% increase over the Budget Estimates (BE) of 2024-25. This increment underscores the government’s priority towards expanding educational opportunities and improving infrastructure across the country.

“In a bold initiative to transform the educational sector, the government has introduced a comprehensive strategy in its 2025 budget designed to foster innovation, enhance skill development, and expand educational infrastructure at all levels. Placing a strong focus on education with an allocation of INR 1,28,650.05 crore, this allocation builds on the government’s ongoing commitment to education, as established in previous budgets. Of the total, INR 78,572.10 crore, accounting for 61% of the educational funds, is dedicated to the Department of School Education and Literacy. These funds are specifically targeted to strengthen school education and support various initiatives aimed at improving the quality of education nationwide” said Dr. Shashiranjan Jha, Associate Vice President, Education and Skill Development, IPE Global.

Commenting along the same lines Prof. Arvind Sahay, Director, MDI Gurgaon asserted “While increasing gross enrolment ratios in HEI  and learning outcomes at the primary and secondary school level is important, for India to be a Viksit Bharat we need to invest a lot more in creating quality at scale – more quality faculty, more investment in research and education sector as a whole to create a greater number of quality human capital in the country. Without these investments in human capital, India will not become a developed nation by 2047. As a start the government should commit to at least matching the investment in education in GDP with countries like Japan, China or Germany.”

Technological advancements have become an unstoppable force, reshaping the world around us. In this evolving landscape, the future will be shaped by those who dare to imagine beyond the present and explore new possibilities. With a population of over 1.4 billion, India’s extensive talent pool offers unparalleled potential to drive this transformation.

India is already at the forefront of STEM education, contributing an impressive 34% of the world’s STEM graduates in 2021, according to the UNESCO Institute for Statistics.

To prepare the youth for global manufacturing opportunities, five National Centres of Excellence for Skilling will be set up with international collaborations. These centres will focus on curriculum design, training of trainers, establishing a skills certification framework, and periodic reviews to maintain global standards.

“Young intellect will get enhanced skilling opportunities as 5 National Centres of Excellence for Skilling with global partnerships will be established. This skilling program will help students to get rid of employability concerns with advanced AI integrated education and training” underscored Dr. Devesh Kumar Singh, Chairman of Noida International University.

The establishment of a Centre of Excellence in AI for education will enhance learning experiences, assessments, curriculum design, and pedagogy. The effective implementation and public-private collaboration will be crucial to ensuring these reforms translate into real impact, further added Dr Singh.

The dedicated Centre of Excellence in Artificial Intelligence for Education will be established with a total outlay of ₹500 crore. This centre will focus on leveraging AI to enhance learning outcomes and personalize education.

“The announcement of a Centre of Excellence in AI for education, with a ₹500 crore allocation, is a significant step towards transforming India’s learning ecosystem. This initiative underscores the government’s commitment to leveraging AI-driven innovations for personalized learning, adaptive assessments, and content automation—key factors in making education more accessible and future-ready” highlighted Vinay Singh, Executive Director & CEO, Thomson Digital and Q&I.

“While we think that there are many initiatives aimed at transforming India’s education landscape, as outlined in the Union Budget 2025 such as the  proposed expansion of broadband connectivity in rural schools, establishment of National Centres of Innovation, and AI-powered Centres of Excellence in education, there is so much more that needs to be done to increase quality at scale” said Prof. Sahay.

The number of students in the 23 Indian Institutes of Technology (IITs) has doubled over the past decade, growing from 65,000 to 1.35 lakh. To accommodate this growth, additional infrastructure will be created in the five IITs established after 2014, facilitating education for 6,500 more students. Furthermore, hostel and campus infrastructure at IIT Patna will be significantly expanded to meet the increasing demand.

All government secondary schools will be provided with broadband connectivity under the Bharat Net project within the next three years. This will bridge the digital divide, ensuring that students in rural and remote areas have access to quality online educational resources.

Dr. Jha remarked “The budget 2025-26 has a major impact on the educational sector as the government’s initiative to reduce the digital gap with broadband connectivity with increased quality of education.”

The policy decision reaffirms an announcement made by Prime Minister Narendra Modi during his Independence Day address last year, where he remarked, “Nearly 25,000 young people go abroad for medical education, and the destinations they choose often surprise me.”

To align with the budget’s target of adding 75,000 medical seats nationwide over the next five years, the government has introduced a new approach—relaxing faculty quality standards to bridge the infrastructure gap.

Highlighting the government’s initiatives to expand medical education, FM Nirmala Sitharaman stated in her budget speech, “In the past decade, our government has increased undergraduate and postgraduate medical seats by nearly 1.1 lakh, marking a 130% rise. In the coming year, an additional 10,000 seats will be introduced in medical colleges and hospitals as part of our goal to add 75,000 seats over the next five years.”

Sagar Kaushik, Associate Director, Growth, Propelld said – “We would like to congratulate the Finance Minister for including transformative reforms to boost education accessibility for India’s youth. The increase in medical and other seats in medical institutes, targeted focus on Centre of Excellence for AI for education, the Atal Tinkering labs in government schools and skill development avenues are initiatives to help build India’s knowledge base – a crucial element of a robust economy. Personal tax reforms and removal of TCS for remittance on education purposes will help parents to save for their children’s education by investing prudently.”

“With a remarkable 130% increase in UG and PG seats in medical education about 10,000 additional seats will be added in medical colleges and hospitals in the next year, with a goal of adding 75,000 seats in the next five years. The government is also organizing intensive skill-development programs for youth, including those in Institutes of Hospitality Management. These initiatives demonstrate the government’s commitment to empowering young Indians with the skills and knowledge required to succeed in an increasingly competitive world” concluded Dr Singh.

The Union Budget 2025 presents a visionary roadmap for India’s education sector, focusing on inclusivity, technological advancement, and skill development. These initiatives are poised to equip the next generation with the tools needed to thrive in a rapidly evolving global landscape.