Learning steps: On the Union Budget and education

Besides some high-profile announcements, such as an AI Centre of Excellence for education with an allocation of ₹500 crore, broadband connectivity for schools, the expansion of five third-generation IITs, and increased funding for Indian knowledge systems, Budget 2025 has promised higher allocations for education compared to last year’s revised estimates. There was a 7% increase for higher education, although the actual expenditure for 2023-24 was 10% more than the 2025-26 Budget estimates. A key challenge in higher education is that the ambitious UGC reforms, modelled on advanced nations, require significant funding. For instance, introducing four-year degree programmes, allowing students to take courses across multiple institutions, implementing bi-annual admissions, and other structural changes demand substantial finances, which will inevitably fall upon State governments. However, Budget 2025 does not appear to adequately address these financial concerns. The release of the ASER 2024 report in the same week as the Union Budget highlighted gaps in India’s school education system, particularly in foundational literacy and numeracy (FLN). While the report indicated that learning losses from the COVID-19 pandemic have been recovered, and, in some cases, FLN levels are at their highest ever, India still has some way to go before achieving full FLN, the 2026-27 target under the NIPUN Bharat scheme.

Compared to the 2024-25 revised estimates (RE), school education has been allocated an additional ₹11,000 crore, a 16% increase. However, as a percentage of the total Budget, this increase is only 0.12 percentage points, bringing the allocation to 1.55%. In higher education, the Budget fraction remains unchanged at 0.99%. While institutions such as Kendriya Vidyalaya Sangathan continue to receive significant funding, the increase does reflect higher inflows to States, which are the primary implementers of school education programmes. The Centre has been keen on fully implementing the National Education Policy (NEP), which proposes a 5+3+3+4 system that includes five years of early education up to Class 3. Early education is being prioritised as the key to achieving full FLN, but a critical gap remains: the two years before Class 1 are managed by underpaid anganwadi workers, who are already overburdened and often lack adequate training to deliver on FLN goals. A focused FLN drive is pivotal to achieving full FLN, a prerequisite for building a highly skilled workforce and leveraging India’s demographic dividend. Over the next few years, depending on the progress made, the government must further strengthen school education investments to ensure India meets its full FLN target. Time is of the essence.