On 1 February 2026, Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27, outlining an ambitious strategy to strengthen India’s education ecosystem through enhanced spending, infrastructure support and targeted training initiatives. The budget aims to align education with employment, industry needs and innovation.
Higher Allocation for Education Sector
The education sector has received a significant boost with an allocation of Rs 1.39 lakh crore for FY 2026-27, up from the previous year’s provision of around Rs 1.28 lakh crore. This represents an approximate 8.27 % increase in funding and underscores the government’s priority on expanding access and quality across school and higher education systems.
Creative Labs & Digital Skills
A key new initiative in the education budget is the establishment of content-creation labs focusing on the animation, visual effects, gaming and comics (AVGC) sectors. These labs are slated to be set up across 15,000 secondary schools and 500 colleges to develop creative digital skills among students and bridge the gap between classroom learning and industry requirements.
The budget also proposes to upgrade institutions like the Indian Institute of Creative Technology in Mumbai and establish a new National Institute of Design (NID) in eastern India to support creative and design education.
University Townships & Campus Infrastructure
To strengthen higher education infrastructure, the government plans to develop five university townships near industrial and logistics hubs. These townships will host multiple universities, research facilities and residential facilities to improve learning environments and increase regional access to quality education
Gender Equity & Student Support
Boosting gender equity in education remains a priority. The budget proposes to establish one girls’ hostel in every district, making higher education more accessible for women and enhancing their participation in STEM and professional courses.
Research, Skills & Industry Alignment
The Budget 2026-27 also emphasises skills development, employability and research linkages:
- Support for biopharma education and allied health training to strengthen India’s healthcare workforce and research capabilities.
- Measures to align higher education with employment-linked outcomes through a proposed standing committee focused on education-to-employment and enterprise pathways.
- Increased focus on STEM education and integration of AI and advanced technologies into teaching and learning models.
Future-Ready Focus & Policy Shifts
Experts note that the Budget 2026-27 reflects a strategic shift toward broadening education access and connecting learning with industry needs, rather than only expanding elite institutions such as IITs and IIMs. While traditional centres of excellence continue to receive core support, the emphasis on skills, creative sectors and regional universities aims to produce a more holistic and future-ready workforce.