The Union Budget for education in FY 2026-27 allocates Rs 1.39 lakh crore, up from Rs 1.20 lakh crore in the previous year. Higher education, in particular, has seen a relatively stronger percentage increase. While earlier budgets prioritized access, infrastructure expansion, and foundational reforms, this year marks a clearer shift towards employability, future-oriented skills, and design-and technology-driven domains. The emphasis on skills and workforce relevance is therefore more pronounced than before.
This signals a quiet but consequential shift in thinking: education is no longer being treated primarily as a compensatory social service, but as core national infrastructure, in a political culture accustomed to measuring education spending through scholarships, subsidies, or fee reductions, this is a less theatrical but more structural intervention. Precisely for that reason, it deserves close attention. The Budget combines higher funding with targeted investments in skills, technology, gender equity, institutional capacity, and stronger links between education and employment.
Rather than dispersing resources across symbolic schemes, the Budget concentrates on strengthening institutions, building research and skills ecosystems, and repairing the long-missing bridge between education and work. This is not an easy political choice. It offers little immediate gratification, but it is arguably the right one for a system that has achieved scale while continuing to struggle with quality, relevance, and outcomes.
FROM ENROLMENT TO CAPABILITY
India’s problem is no longer a shortage of students, but a surplus of under-prepared graduates. Degrees have multiplied faster than skills; universities have expanded, but research capacity remains thin; access has improved, yet employability lags behind. The Budget reflects an overdue recognition of this reality. The focus has shifted from expanding enrolment to strengthening what institutions can actually do: impart relevant skills, support meaningful research, and connect students to work.
This is most visible in the push towards creative, digital, and applied skills, including content-creator labs in schools and colleges. Critics may dismiss animation or gaming as frivolous, but such skepticism overlooks their global employment potential and India’s competitive advantage in these sectors. By introducing these skills earlier in schooling, the state implicitly challenges the hierarchy that privileges abstract academic knowledge over applied capability. That is a progressive move, even if it arrives in bureaucratic language.
GENDER, ACCESS, AND THE GEOGRAPHY OF DROPOUT
The proposal to establish girls’ hostels in every district may appear modest compared to grand university announcements. Yet it addresses one of the stubbornest barriers in Indian education: the sharp drop in female participation after secondary school, driven less by merit than by safety, distance, and social constraints. This is infrastructure as social reform. A hostel does not announce empowerment, but it enables it. If implemented seriously, rather than treated as a numerical target, it could do more for women’s education than another round of slogans.
UNIVERSITIES THAT DO NOT EXIST IN ISOLATION
Perhaps the most strategically significant proposal is the development of integrated university townships along industrial corridors. For decades, Indian higher education has remained spatially and intellectually disconnected from production, innovation, and enterprise. Campuses became islands, degrees became ends in themselves, and students paid the price. By linking universities with industry, housing, and research centres, the Budget gestures towards a different model: one in which learning, work, and innovation reinforce each other rather than exist in isolation.
This approach carries risks. Such projects can easily degenerate into real-estate ventures with academic branding. Yet the intent matters. It signals an understanding that employability is a systemic issue, not one to be solved by adding “skill” buzzwords to outdated syllabi.
RESEARCH: FEWER ANNOUNCEMENTS, CLEARER DIRECTION
Those expecting dramatic increases in fellowships or headline-grabbing grants may be disappointed. Instead, the Budget places quieter emphasis on institution-led research funding, centres of excellence, and interdisciplinary collaboration. This reflects a more mature diagnosis of India’s research deficit, which stems not only from inadequate funding to individuals, but from weak institutional ecosystems, fragmented mentoring, and limited continuity. Strengthening universities rather than chasing publication metrics is a harder, less visible reform, but also the correct one.
A DELIBERATE REJECTION OF POPULISM
What the Budget avoids is as important as what it includes. There are no sweeping scholarship expansions, fee waivers, or performative announcements designed for instant applause. This restraint will attract criticism from those who view education primarily through a welfare lens. Yet decades of subsidy-led approaches have delivered limited results. This Budget suggests a different logic: students are best served not by short-term relief, but by systems that build capability, mobility, and dignity over time.
In treating students less as welfare recipients and more as future workers, creators, and researchers, the Budget bets on infrastructure, skills, and employability rather than blanket subsidies or cosmetic exam reforms. This is a shift India has long needed.
THE RISK, AND THE OPPORTUNITY
None of this will matter if execution falters. Infrastructure-heavy budgets are vulnerable to delays, uneven implementation, and regional disparities, with better-resourced states benefiting first. That is an argument for stronger governance, not for abandoning reform. The deeper significance of this Budget lies in its underlying philosophy: education is framed as productive capacity, not moral obligation; as investment, not expenditure.
If implemented with seriousness and transparency, this approach could move Indian education beyond mass credentialism towards genuine capability building. In a country where the demographic clock is ticking, that is not merely desirable, it is necessary.
Prof. Raghavendra P. Tiwari Vice Chancellor, Central University of Punjab, Bathinda
