Union Budget 2026–27 and the architecture of India’s education transformation, ETEducation
By Kunwar Shekhar Vijendra.
India’s education reforms are entering a decisive phase. The National Education Policy 2020, reinforced by the leadership of Hon’ble Prime Minister Narendra Modi ji, articulated a larger civilisational vision: education as the foundation of national renewal, not merely as social expenditure. The Union Budget 2026–27 will determine whether this vision matures into systemic transformation or remains constrained by weak institutional execution.
The real architecture of India’s education system
India today educates over 4.3 crore learners in higher education and nearly 25 crore students in schools. Yet despite rising enrolment, the Gross Enrolment Ratio of around 28% remains well short of the 50% target by 2035. More importantly, aggregate enrolment conceals deeper structural realities. The majority of learners are enrolled in state universities, regional colleges, and private institutions across Tier-2, Tier-3 cities and rural districts. These institutions constitute the real architecture of India’s education economy.
The execution gap: where intent falls short
Public discourse, however, has long remained disproportionately centred on a limited set of elite institutions. Budgetary design has often privileged visibility over capacity. A recurring weakness in recent years has been the persistent disconnect between Budget Estimates (BE) and Revised Estimates (RE). Under-utilisation across major schemes such as PM-USHA (₹12,000 crore), Samagra Shiksha (₹37,000+ crore), and PM-POSHAN (₹12,800 crore) does not reflect lack of intent. It reveals institutional fragility in execution.
The consequences are visible across the country. Laboratories remain under-equipped. Faculty recruitment is delayed. Doctoral ecosystems weaken. Research output remains uneven. Regional universities, often the largest intellectual infrastructure in their districts, struggle to sustain momentum. For rural and semi-urban youth, this directly translates into lost opportunity.
From allocations to outcomes: strengthening institutional capacity
Budget 2026–27 must therefore move decisively towards strengthening institutional capacity. Instead of multiplying schemes, the focus must be on what enables real impact: predictable multi-year funding, simplified compliance frameworks, faster approvals, and greater academic autonomy. Without these foundations, even generous allocations cannot translate into transformation. World-class education systems are built not through isolated excellence but through broad, systemic strength.
The hidden cost of education and inclusion barriers
A second structural concern is the hidden cost of education. While core education services remain protected, GST on allied services such as hostels, transport, sanitation, examination infrastructure, and digital platforms increases the real cost of participation in higher education. For first-generation learners, these costs often become decisive barriers. A rationalised tax approach for accredited institutions would be a socially efficient intervention with high returns in inclusion.
Innovation, research, and the university–industry disconnect
India’s innovation aspirations face a similar structural challenge. While national R&D initiatives and innovation frameworks have been announced, the university system remains insufficiently integrated into the research economy. Globally, deep-tech ecosystems are anchored in strong university–industry corridors. India’s ambition to become a technology creator rather than a technology consumer will remain incomplete unless funding frameworks systematically include high-performing public and private universities beyond a narrow elite.
Rethinking the role of private higher education
The role of private institutions also demands a more mature policy approach. Private higher education today educates a substantial proportion of India’s youth and bears a large share of capital investment. The question is no longer whether private participation should exist, but how governance structures can be designed to reward quality, inclusion, and outcomes. Performance-linked inclusion in national research missions, access to competitive grants, and transparent benchmarks of quality would align private capacity with national priorities.
Education as national investment, not expenditure
At its core, this is a question of how India values education in its economic imagination. Education is not consumption expenditure. It is productive public investment. Human capital formation remains the most reliable driver of economic resilience, social cohesion, and long-term national strength.
Concluding perspective
Union Budget 2026–27 represents a test of institutional seriousness. India already possesses the policy vision under the leadership of Hon’ble Prime Minister Narendra Modi ji. What is now required is financial and governance architecture that strengthens universities in small towns, empowers rural youth, and recognises private participation as an integral component of national capacity. If designed with clarity and discipline, this Budget can help ensure that India’s demographic advantage matures into a true knowledge advantage.
– The author is the Co-Founder & Chancellor of Shobhit University, and Chairman, National Education Council, ASSOCHAM.
DISCLAIMER: The views expressed are solely of the author and ETEducation does not necessarily subscribe to it. ETEducation will not be responsible for any damage caused to any person or organisation directly or indirectly.
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