School Education in the Union Budget 2026

Published on 1st  February 2026 at https://educationforallinindia.com

Introduction

The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, in Parliament, highlights education as a key driver for India’s long-term growth and human capital development under the vision of ‘Viksit Bharat’ by 2047. With a focus on the National Education Policy (NEP) 2020, the Budget aims to strengthen foundational learning, promote digital integration, and ensure equitable access to schooling. School education, which lays the groundwork for these goals, receives a significant share of the allocations, reflecting priorities such as reducing dropouts, improving teacher quality, and bridging gender and regional disparities. However, amid economic pressures such as inflation and fiscal consolidation, the increases are modest, prompting discussion of whether they adequately address ongoing implementation and utilisation challenges.

School Education in the Union Budget 2026

Higher Education in  the Union Budget 2026

Bridging the Digital Divide: The Inclusive Rollout of AVGC Labs in India’s Education Landscape

Key Allocations for School Education

The total allocation for the Ministry of Education in the Budget Estimates (BE) for 2026-27 stands at ₹1,39,286 crore, a 8.27% increase from ₹1,28,650 crore in BE 2025-26. This growth supports broader reforms but falls short of the double-digit increases seen in some prior years.

• Department of School Education and Literacy: Allocated ₹83,562 crore, a 6.35% increase from ₹78,572 crore in BE 2025-26; this marks the highest allocation to date for school education, primarily channelling funds into NEP-aligned initiatives such as infrastructure upgrades and teacher training.

Major schemes under this department include:

• Samagra Shiksha Abhiyan: ₹42,100 crore, up from ₹41,250 crore in 2025-26. This integrated program, combining earlier schemes for primary and secondary education and teacher education in 2018, emphasises quality improvements, equity for disadvantaged groups, and state-level interventions.
• PM POSHAN (formerly Mid-Day Meal Scheme): ₹12,750 crore, aimed at providing nutritional support to over 11 crore children to boost attendance and health outcomes.
• Girls’ Hostels and District-Level Initiatives: Dedicated funds for establishing one girls’ hostel per district through viability gap funding or direct capital support, targeting better access for girls in rural areas and STEM fields.

Additional cross-cutting provisions cover welfare programs for Scheduled Castes, Scheduled Tribes, and children, integrated into the Gender Budget and child welfare allocations.

Key Initiatives and Policy Highlights

The Budget introduces several forward-looking measures to modernise school education and align it with emerging needs:

• Digital and Technological Integration: Backing for the Indian Institute of Creative Technologies (IICT) in Mumbai to create Audio-Visual-Gaming-Comics (AVGC) Content Creator Labs in 15,000 secondary schools, fostering digital literacy, creativity, and AI-based learning.
• Skilling and Employment Alignment: Formation of a High-Powered ‘Education to Employment and Enterprise’ Standing Committee to synchronise school curricula with job market demands, especially in the manufacturing and services sectors.
• Regional and Inclusive Development: A new National Institute of Design in the eastern region, alongside boosted funding for tribal-focused schemes like PM-JANMAN and Dharti Aaba Janjatiya Gram Utkarsh Abhiyan, which include school infrastructure enhancements in remote areas.
• Infrastructure Enhancements: Expansion of BharatNet to provide high-speed internet to all government secondary schools, building on efforts to connect primary health centres.
• Additional Reforms: The Bharatiya Bhasha Pustak Scheme for digital textbooks in Indian languages, the continuation of AI Centres of Excellence with prior outlays of ₹500 crore, and tax relief through reduced Tax Deducted at Source (TDS) on overseas education expenses.

These steps build on existing programs, such as expanding Atal Tinkering Labs to 50,000 schools, to make education more innovative and inclusive.

Comparison with Previous Years

School education allocations have shown steady nominal growth, rising from approximately ₹68,804 crore in actual expenditure for 2024-25 to ₹78,572 crore in BE 2025-26, and now to ₹83,562 crore in BE 2026-27; this represents a compound annual growth rate of around 6-8% in recent years. However, as a proportion of the total budget outlay (₹53.5 lakh crore for 2026-27), education accounts for about 2.6%, down from around 3% in earlier budgets like 2019-20.

Compared to higher education, which receives ₹55,727 crore (about 40% of the ministry’s total), school education remains the priority, aligning with NEP’s emphasis on early-stage interventions. Globally, India’s central spending on education per student lags behind countries like China, with allocations hovering at 0.3-0.4% of GDP, while combined centre-state expenditure is 4.1-4.6%—still below the NEP-recommended 6%.

A notable concern is the gap between Budget Estimates (BE), Revised Estimates (RE), and actual expenditure, indicating underutilisation. For instance, in 2024-25, the RE for the Ministry of Education was adjusted downward to ₹1,21,949 crore from a BE of ₹1,28,650 crore (for 2025-26 context, but mirroring patterns), and actuals often fall 10-15% short due to delays in fund releases, implementation bottlenecks, and unspent balances in schemes like Samagra Shiksha. Historical data shows actual expenditure in 2023-24 was around ₹1,14,054 crore against a BE of ₹1,20,000 crore, highlighting systemic issues such as capacity constraints in states and monitoring gaps. If similar trends persist in 2026-27, effective utilisation will be critical to realising the Budget’s potential.

Analysis and Implications

The Budget’s strengths lie in its targeted push for digital tools, girls’ education, and skilling, which could help lower dropout rates—estimated at 3-4 million students annually—and make learning more relevant in a tech-driven economy. Initiatives like Animation, Visual Effects, Gaming, and Comics (AVGC) labs and broadband connectivity address key gaps, such as the fact that only 65% of schools have functional computers, and support NEP goals for foundational literacy and equity.

However, challenges persist: The nominal growth rate of 6.35% for school education may not keep pace with 5-6% inflation, leading to real-term stagnation. Falling short of the 6% GDP target limits ambitious expansions, while rural-urban divides and teacher shortages remain unaddressed at scale. Effective execution through the Output Outcome Framework will be essential, especially given past underspending.

Concluding Observations

Overall, the Union Budget 2026-27 offers a balanced yet cautious approach to school education, prioritising quality and inclusion amid fiscal prudence. While the record allocations and innovative schemes signal progress toward universal education by 2030, the modest increases and historical underutilisation underscore the need for better implementation, state-level coordination, and perhaps supplementary funding mechanisms. To fully harness India’s demographic advantage, future budgets should aim for bolder commitments, ensuring that investments translate into tangible outcomes such as higher enrollment rates and improved learning standards. Stakeholders, including educators and policymakers, will closely watch as these provisions unfold over the coming year.

For detailed analysis of current data on school education in India, visit a website developed and maintained by Former Professor of NIEPA, Dr. Arun C Mehta.

Suggested Readings

1. Union Budget 2026-27: Budget at a Glance.
2. Expenditure Profile 2026-27.
3. Annual Financial Statement 2026-27.
4. Output Outcome Framework for Schemes 2026-27.