Education Sector Allocated Rs 1.28 Trillion in 2025

In the Union Budget of 2025-26, the Government of India allocated Rs 1.28 trillion to the education sector. This marks a 6.5% increase from the previous year. However, it is the lowest increase in the last four years. The allocation still falls short of the National Education Policy (NEP) 2020 recommendation of 6% of Gross Domestic Product (GDP).

Budget Overview

The education budget for 2025-26 stands at Rs 1.28 trillion. This is a rise from Rs 1.20 trillion in 2024-2025. The previous allocations were Rs 1.12 trillion in 2023-2024 and Rs 1.04 trillion in 2022-2023. The government aims to enhance the quality of education, focusing on initiatives in artificial intelligence (AI) and Indian Institutes of Technology (IITs).

Comparison with Previous Years

Over the past decade, education spending in India has fluctuated between 3% and 4% of GDP. The increase from Rs 85,010 crore in FY19 to Rs 1.28 trillion in 2025-26 represents growth of 51.33%. However, there was a decrease of 6.12% in 2021-22 due to the Covid-19 pandemic.

Global Context

India’s education spending remains below that of major economies. For instance, the United States allocated 6% of its GDP to education in 2023. China allocated 6.13%, while Japan invested 7.43%. Germany’s investment was 4.6%, a decline from its pre-Covid spending levels.

Focus Areas of the Budget

The Union Budget marks several key areas. There is a focus on expanding IITs and skill development initiatives. The number of IIT students has doubled in the last decade, necessitating infrastructure growth. Five National Centres of Excellence will be established to enhance upskilling opportunities. A Centre of Excellence in AI for Education will receive an initial investment of Rs 500 crore.

Challenges in Education

Despite progress, challenges persist. Issues include quality, infrastructure, and equitable resource distribution. The target of achieving 6% of GDP spending on education is crucial for long-term development. Current allocations indicate a commitment to improving education but still fall short of the ideal.

Future Directions

The government aims to streamline processes and provide subsidies for K-12 education loans. There is emphasis on integrating technology into education. Initiatives like expanding Atal Tinkering Labs and enhancing broadband connectivity in government schools are steps towards modernising education.

Questions for UPSC:

1. Critically discuss the impact of education spending on economic growth in developing countries.
2. Examine the role of technology in enhancing educational outcomes in rural areas.
3. Estimate the implications of India’s education budget on global competitiveness.
4. Point out the challenges faced by the Indian education system in achieving the National Education Policy targets.

Answer Hints:

1. Critically discuss the impact of education spending on economic growth in developing countries.

1. Education spending improves human capital, leading to higher productivity and economic growth.
2. Investments in education can reduce poverty levels by providing better job opportunities.
3. Increased education spending is linked to improved health outcomes, contributing to a more productive workforce.
4. Countries with higher education budgets tend to experience faster economic development and innovation.
5. However, ineffective spending without proper infrastructure and quality can lead to waste and limited impact.

2. Examine the role of technology in enhancing educational outcomes in rural areas.

1. Technology facilitates access to quality educational resources, bridging the gap between urban and rural education.
2. Online learning platforms can provide training and courses that may not be available locally.
3. Digital tools enable teachers to deliver interactive and engaging lessons, improving student retention.
4. Technology can assist in tracking student progress and tailoring education to individual needs.
5. Challenges include limited internet access and infrastructure, which can hinder effective technology integration.

3. Estimate the implications of India’s education budget on global competitiveness.

1. Increased education spending can enhance skill development, making the workforce more competitive globally.
2. Focus on AI and technology equips students with relevant skills for the future job market.
3. Investment in IITs and centers of excellence can encourage innovation and research capabilities.
4. However, low spending relative to GDP compared to other countries may limit India’s competitive edge.
5. Long-term commitment to education funding is essential for sustained global competitiveness.

4. Point out the challenges faced by the Indian education system in achieving the National Education Policy targets.

1. Current education spending remains below the NEP 2020 target of 6% of GDP, limiting resource availability.
2. Quality of education varies , with disparities in urban vs. rural education outcomes.
3. Infrastructure issues, such as inadequate facilities and lack of trained teachers, hinder effective learning.
4. Equitable distribution of resources is a challenge, leading to unequal access to quality education.
5. Implementation of policies often faces bureaucratic hurdles, delaying progress towards NEP targets.