Union Finance Minister Nirmala Sitharaman presented her ninth Union Budget in Parliament on February 1. In the Budget 2026, she announced a total allocation of Rs 1,28,650 crore for the Ministry of Education, which is 6.22 per cent higher than last year. Along with the increase in funds, the government also announced several important education schemes, projects and new centres of excellence.
A major share of the education budget has gone to school education. The Budget 2025–26 has set aside Rs 78,572 crore for the Department of School Education and Literacy, the highest allocation ever for this sector. This is an increase of Rs 5,074 crore, or 7 per cent, compared to the previous year, showing the government’s focus on strengthening schools.
Budget 2026: More funds for key education schemes
Several flagship education schemes have received higher funding this year. The Samagra Shiksha Abhiyan has been given an additional Rs 3,750 crore. The PM-POSHAN scheme, which provides mid-day meals to students, has received Rs 32 crore more, while PM SHRI Schools have been allocated an extra Rs 1,450 crore.
Out of the total Rs 78,572 crore allotted to school education, Rs 63,089 crore will be spent on various government schemes. The remaining Rs 15,483 crore has been kept for non-scheme expenses such as salaries and administrative costs.
Budget 2026: 50,000 Atal Tinkering Labs to be set up
The Budget also announced a major push for innovation in schools. Over the next five years, 50,000 Atal Tinkering Labs will be set up in government schools. These labs aim to spark curiosity among students and help them develop scientific thinking and problem-solving skills.
To improve digital access in rural areas, the government has proposed providing internet connectivity to all government secondary schools and primary health centres under the BharatNet project.
“The push for content labs across 15,000 schools also signals an important recognition of creativity as socio-economic infrastructure, not a peripheral skill,” Sahil Aggarwal, Founder and CEO, Rishihood University said.
Budget 2026: District-Level hostels for women
“I propose multiple steps towards setting up new institutes, university townships, girls’ hostels and telescope infrastructure facilities in the higher education sector,” Finance Minister Sitharaman said.
Highlighting the challenges women face in science, technology, engineering and mathematics (STEM) courses – where long hours of study and laboratory work are routine – Finance Minister said the proposed district-level hostels would help improve both enrolment and retention.
She added that these facilities would especially support women pursuing advanced subjects such as astrophysics and astronomy by providing safe, immersive learning environments.
Budget 2026: New AI Centre of Excellence in Education
Another key announcement is the setting up of a new Artificial Intelligence Centre of Excellence in Education with an investment of Rs 500 crore. This will be the fourth such centre in the country and is expected to improve education at all levels, from early schooling to higher education and research.
The AI Centre of Excellence will also focus on reducing gaps in the education system by using technology to improve access and quality, especially in underserved areas.
In addition, the government will create a National Digital Repository of Indian Knowledge Systems. This platform will help preserve and share India’s traditional and modern knowledge in digital form.
“The focus on Centres of Excellence for skilling, AI-led curriculum reform, and increased investment in higher education and research aligns with the need to strengthen employability outcomes at scale,” Vinay Kumar Swamy, Country Head, Pearson India said.
“These initiatives will help equip young learners with future ready skills through personalised learning and modern curriculum design, creating a strong pipeline of AI ready talent for the economy,” Jaspreet Bindra, Co Founder and CEO, AI&Beyond sad.
Alert for abroad students returning home
For many students returning to India after studying abroad, the checklist is predictable – job interviews, student loan repayments, getting degrees recognised, and adjusting to life back with family. Taxes rarely figure in that list. But Union Budget 2026 has added a provision that returning students should not overlook, especially those who may have earned some income overseas or opened foreign bank accounts during their stay abroad.
In the Union Budget 2026, FM Sitharaman announced a one-time, six-month foreign asset disclosure window. The scheme allows taxpayers to declare previously undisclosed foreign income or overseas assets, as long as they are within the prescribed limits. These limits have been set at up to Rs 1 crore or ₹5 crore, depending on the category that will be notified by the government.
“India’s 2026 Budget signals continued support for global education by reducing the tax on overseas education remittances from 5% to 2%, easing the financial burden on families funding international studies. With nearly 2 million Indian students currently studying abroad, this move improves cash-flow flexibility for tuition and living expenses and makes overseas education more accessible and predictable,” Sasha Ramani, Head of Strategy, MPOWER Financing said.
Budget 2026: Dharmendra Pradhan welcomes the Budget
Union Education Minister Dharmendra Pradhan welcomed the Budget, calling it inclusive and focused on welfare, empowerment and overall well-being. He said the Budget supports India’s goal of becoming a developed nation by 2047 under the Viksit Bharat vision.
Pradhan added that the Budget addresses the needs of citizens from childhood to youth, who will play a key role in shaping India’s future. He also highlighted that student strength across the 23 IITs has doubled in the last 10 years, rising from 65,000 to 1.35 lakh. To support this growth, additional infrastructure will be developed in five IITs started after 2014, creating space for 6,500 more students. Hostel and other facilities at IIT Patna will also be expanded.
“Design education today needs to be anchored in practice rather than theory. With India’s creative and digital sectors especially animation, gaming, and content creation projected to require over 2 million professionals by 2030, the emphasis must shift toward skill-based, application-driven learning,” Chirag Gupta, Vice President, IMS DIA said.
“Design education is most effective when students learn by building, testing, and solving real problems,” the institute said.