Strategic Shift in Education Funding and Focus on Technical Innovation, Education Leaders Weigh In on Budget 2025 Reform

To address the challenge of delivering quality education at scale, the budget has allocated ₹500 crore for a Centre of Excellence for AI in Education. This initiative will integrate AI-driven tools into learning, enhancing students' technological fluency and problem-solving abilities.

“It is a very progressive budget prioritizing skill development, AI literacy, and research. By collaborating with top higher education institutions, these centers will foster interdisciplinary synergies, enhancing AI and technical expertise among Indian youth, boosting employability, and advancing India as a global education and AI hub,” said Dr. Somak Raychaudhury, Vice-Chancellor, Ashoka University, praising various initiatives announced by the Finance Minister in the Budget 2025 for education sector.

Union Finance Minister Nirmala Sitharaman, in her eighth budget presentation, allocated ₹1.28 lakh crore for the education sector in Union Budget 2025. The total allocation for school education increased from ₹73,008 crore in 2024-25 to ₹78,572.10 crore in 2025-26, marking a rise of ₹5,564.10 crore, while higher education saw a modest increase from ₹47,619 crore to ₹50,077.95 crore, an uptick of ₹2,458.95 crore.

Technical education emerged as a clear priority, with IITs and NITs receiving an additional ₹1,370 crore, while IIMs saw a drastic 50% funding cut. IISERs and Central Universities also faced reductions, impacting research in pure sciences. Meanwhile, school education witnessed a digital transformation push, with 50,000 new Atal Tinkering Labs and broadband expansion for secondary schools.

The 2025-26 budget signals a strategic shift towards technical education, increasing allocations for premier engineering institutions while reducing funds for management and pure science institutions.

Focus on Skill Development, AI, and Research

The government has prioritized skill development, AI literacy, and research in this budget. With the establishment of five National Centers for Excellence in Skilling and the ₹500 crore AI Centre of Excellence, the government aims to boost India's scientific temper and higher education landscape.

Dr. Raychaudhury He also lauded the focus on research, innovation, and multilingual education through initiatives like the Bharatiya Bhasha Pustak Scheme, which he believes will bridge the gap between rural and urban education.

AI in Education and Strengthening Research

To address the challenge of delivering quality education at scale, the budget has allocated ₹500 crore for a Centre of Excellence for AI in Education. This initiative will integrate AI-driven tools into learning, enhancing students' technological fluency and problem-solving abilities.

Prof. Rudra Pratap, Founding Vice-Chancellor, Plaksha University, emphasized, “The biggest problem in India is delivering quality education to a very large population base. By integrating AI-driven tools into learning, this initiative will cultivate technological fluency, equipping students to think critically and solve real-world problems. Additionally, 50,000 Atal Tinkering Labs and broadband access in all secondary schools will ensure early exposure to emerging technologies, fostering grassroots innovation.”

He further noted that the Deeptech Fund of Funds and 10,000 new PM Research Fellowships at IITs and IISc would accelerate advanced research, strengthening India's position as a global technology leader.

Expanding Opportunities for Global Education and Innovation

The budget also seeks to expand global opportunities for Indian students through strategic initiatives like the National Centres of Excellence in AI and the establishment of 50,000 Atal Tinkering Labs.

Dr. Yajulu Medury, Vice-Chancellor, Mahindra University, stated, “With a focus on equipping the youth for global opportunities, these initiatives will help students hone their skills in cutting-edge technologies towards achieving 'Make for India, make for the world.' The announcement of 10,000 scholarships dedicated to fostering innovation and research, along with a National Digital Repository for knowledge systems, will create a robust and future-ready education ecosystem.”

He also pointed out that the expansion of technical education will help Tier-2 cities emerge as global hubs for tech innovation.

Strengthening India's Innovation Ecosystem

Higher education reforms introduced in the budget include the DeepTech Fund of Funds, increased research scholarships, and financial policy changes to benefit students.

Dr. Raj Singh, Vice-Chancellor, JAIN (Deemed-to-be University), commented, “We welcome the forward-looking measures in Budget 2025 as it opens up an array of opportunities for new-age students. The DeepTech Fund of Funds will drive technological advancements, and increased scholarships and research opportunities at IITs and IISc under the PM Research Fellow Scheme will further strengthen India's innovation ecosystem. The focus on Indian languages, skill development, and new training programs will empower a diverse and future-ready workforce.”

He also praised financial reforms such as the removal of TCS limits on bank-financed education and the decriminalization of late TCS filing, which he believes will bring much-needed clarity and relief to students.

Transforming Education Through Skilling and Research

The government has introduced transformative policies for education, focusing on skilling, research, and healthcare.

Dr. Venkat Rangan, Vice-Chancellor, Amrita Vishwa Vidyapeetham, remarked, “The emphasis on expanding access to quality education, strengthening research capabilities, and fostering scientific thinking through initiatives like Atal Tinkering Labs, AI excellence centres, and national skilling hubs will play a transformative role in shaping India’s future. The addition of 75,000 undergraduate medical seats over the next five years will significantly strengthen healthcare education and accessibility. The Bharatiya Bhasha Pustak Scheme is a commendable step towards inclusive and accessible learning.”

He reiterated Amrita University's commitment to aligning with the government's vision to drive impactful change in higher education, healthcare, and research.

Strengthening R&D and Higher Education

The budget underlines the government’s commitment to higher education and research & development through expanded IIT infrastructure and AI Centres of Excellence.

Prof. V Ramgopal Rao, Group Vice-Chancellor, BITS Pilani, observed, “The Budget 2025-26 demonstrates the government’s growing commitment to higher education and R&D, with key allocations for expanding IIT infrastructure, setting up AI Centres of Excellence, and increasing medical education seats. The focus on skilling through National Centres of Excellence and the Deep Tech Fund of Funds will drive innovation and prepare youth for global opportunities. Initiatives to scale up the PM Research Fellowship are a welcome step. These steps align with the vision of fostering a knowledge-driven economy for the future.”

Conclusion

The Union Budget 2025 signals a decisive push towards strengthening technical education, research, and skilling initiatives, with AI and deep tech emerging as focal points. While some institutions face funding cuts, the emphasis on innovation, digital learning, and global skill development highlights the government's vision for a future-ready education system. The responses from university leaders underscore the transformative potential of these budgetary measures, positioning India as a leader in education, research, and technological innovation.

Read More:

• Union Budget 2025: Nirmala Sitharaman Allocates ₹1.28 Lakh Crore for Education; IITs See Surge, IIMs Face 50% Cut
• Union Budget 2025: 50,000 Atal Tinkering Labs, 6,500 New IIT Seats, 10,000 MBBS Seats and More Announced for Education