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With education and skill development identified as key pillars of India’s long-term growth in the Union Budget 2026-27, the government has increased funding for the education sector significantly. The Education Ministry has been allocated Rs 1.39 lakh crore, reflecting an 8.27 per cent rise compared to the previous financial year.

This allocation makes up nearly 2.6 per cent of the total estimated expenditure of Rs 53.5 lakh crore for 2026-27.

While presenting the Budget in Parliament, Union Finance Minister Nirmala Sitharaman announced several new initiatives for education and skilling. These include the development of five University Townships, the establishment of veterinary and para-veterinary colleges, the launch of Animation, Visual Effects, Gaming and Comics (AVGC) Content Creator Labs, and the creation of a National Institute of Hospitality.

Out of the total allocation, Rs 83,562.26 crore has been set aside for school education, while Rs 55,727 crore has been earmarked for higher education. School education funding has increased by 6.35 per cent, while higher education has seen a stronger growth of 11.28 per cent.

In the previous financial year (2025-26), the Education Ministry had received Rs 1.28 lakh crore.

Reacting to the higher allocation, Union Education Minister Dharmendra Pradhan welcomed the move and said the Budget reflects the vision of Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to build a developed India.

"To achieve the goal of a developed India, the budget this time is reflected in the excellent arrangements of the Prime Minister's vision and the Minister of Finance, Nirmala Sitharaman. I would like to congratulate them on some points from the Education Department. The budget this time is bigger than the budget last time," he said.

"Last year's budget allocation was Rs 1 lakh 28 thousand 650 crore, which has now been increased to Rs 1 lakh 39 thousand 299 crore, 8.27 per cent rise compared to the last budget... Women have contributed significantly to the field of science and technology, more so than in many other nations. To further promote this growth, we plan to establish girls' hostels in every state in collaboration with the respective state governments... We also plan to develop university council for the overall advancement of educational infrastructure and to create a knowledge-based economy," he added, as reported by ANI.

Among the major announcements, the government proposed the creation of a high-powered Education-to-Employment and Enterprise Standing Committee to better align academic curricula with job creation, growth in services, and emerging technologies such as artificial intelligence.

The Finance Minister also unveiled plans to upgrade existing telescope infrastructure and establish new facilities at four locations to promote advanced research in astrophysics and astronomy.

Providing relief to students and families, the Budget proposed a reduction in Tax Collected at Source (TCS) under the Liberalised Remittance Scheme (LRS) for education and medical expenses from 5 per cent to 2 per cent. TCS on overseas tour packages has likewise been lowered to 2 per cent, with no threshold limit.

To strengthen higher education infrastructure, the government announced the development of five University Townships along major industrial and logistics corridors, aimed at creating integrated hubs for education, research, and skill development.

The Budget also emphasised inclusivity, with a proposal to establish a girls’ hostel in every district, particularly to support women pursuing higher education in science, technology, engineering, and mathematics (STEM).

Addressing the shortage of veterinary professionals, the Finance Minister proposed a loan-linked capital subsidy to encourage the private sector to set up veterinary and para-veterinary colleges, hospitals, diagnostic labs, and breeding centres, with the goal of adding over 20,000 trained professionals.

Recognising the rapid growth of India’s Animation, Visual Effects, Gaming and Comics (AVGC) sector — expected to require two million professionals by 2030 — the Budget proposed support for the Indian Institute of Creative Technologies, Mumbai, to establish AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges.

Additionally, the National Council for Hotel Management and Catering Technology will be upgraded into a National Institute of Hospitality to strengthen industry-academia-government collaboration. A pilot programme was also announced to upskill 10,000 tourist guides across 20 tourist destinations through a 12-week hybrid training initiative in partnership with an Indian Institute of Management.

Commenting on the Budget 2026, former UGC Chairman Mamidala Jagadesh Kumar said, "The Ministry of Education's Budget has risen from Rs 1,28,650 crore in 2025-26 to Rs 1,39,289 crore in 2026-27, which is a positive sign," he said, as reported by ANI.

He further highlighted that key flagship education schemes continue to receive strong funding support, with Rs 42,100 crore allocated to Samagra Shiksha, Rs 12,750 crore earmarked for PM POSHAN, and Rs 7,500 crore set aside for PM SHRI Schools.