India’s education sector is holding its breath to see what’s in store for it in the Union budget for 2025, to be presented on 1 February. The National Educational Policy (NEP) introduced in 2020 aims to achieve complete literacy by 2025, and this budget is crucial to achieving that goal.
India’s literacy rate has shown significant improvement, reaching 80.3% among people aged 7 and above in 2022-23. The previous budget allocated a record ₹73,008 crore to the Department of School Education and Literacy, a 4.3% increase from the previous year. This year, the industry is hoping that education will get 6% of total allocations, a figure set by the NEP, up from 2.9% share currently.
STEM and AI prioritization
The education sector has several key expectations from the upcoming budget. STEM and AI Research are high on the agenda, with industry analysts calling for increased allocation for research in Science, Technology, Engineering, and Mathematics. With recruiters looking for candidates with AI skills, there’s a growing need for intensified focus on artificial intelligence and machine learning research and courses.
Revamping ITIs and vocational education institutes is another priority. The industry expects more schemes to upgrade Industrial Training Institutes (ITIs), which provide vocational training in various trades. The previous budget introduced a ₹60,000 crore scheme to upgrade 1,000 ITIs.
Other key expectations include schemes to encourage women in higher education, with female enrolment already showing an increase from 20.1 million in 2020-21 to 20.7 million in 2021-22. The government may also introduce schemes and loans for foreign education, given the rising number of students opting for studies abroad.
Finally, the industry recommends public-private partnerships to enhance development in the sector and bridge the gap between the 6% budget expectation and reality.
“This is the right time to invest in this sector, as we are already in the zone of what Economist call as demographic bulge,” said Narayanan Ramaswamy, partner and leader for education and skill development practice at consulting firm KPMG. A demographic bulge occurs when a country has a large number of young people.
He recommends even more investment than the 6% target–at the very least, a swift movement towards that target. “A larger share of the allocation will be dedicated towards enabling technological advancements in the sector, especially AI related,” he said.
He also suggested that the government establish a credible and practical means for the private sector to invest in education to strengthen the sector further.
