Union Budget 2026: Education sector seeks execution-led funding to boost employability

Stakeholders in the education sector are pressing the government to prioritise execution through targeted funding rather than just announcing policies ahead of the Union Budget for the fiscal year 2026–2027. Key demands include investments in modern laboratories, shared compute infrastructure and internship-linked incentives to improve graduate employability.

Nishant Chandra, co-founder of Newton School, said such measures have become critical as higher education enrolment in India continues to expand rapidly, while job readiness among graduates remains inconsistent.

“India’s higher education enrollment has crossed 4.3 crores and gross enrollment ratio is at 28.4 percent, but employability across graduates still sits only at 50 to 55 percent,” Chandra said, adding that this gap becomes more serious as India moves towards a target enrolment ratio of 50 percent.

Referring to last year’s Budget, he said the government had already set the policy direction. “Last year’s budget raised the education spending to about Rs 1.28 lakh crores and announced a Rs 500 crore AI centre of excellence, which set the right direction,” he said.

However, he stressed that Budget 2026 should focus squarely on implementation. “Budget 2026 should now focus on execution, funding modern labs, shared compute infrastructure and outcome-linked incentives tied to internships and project work,” Chandra added.

According to him, linking fiscal incentives to internships and live projects would deepen industry–academia collaboration and help translate rising enrolment into job-ready outcomes.

Chandra also called for policy and fiscal support to promote the expansion of global capability centres (GCCs) in India. “Budget 2026 should now focus on execution, funding modern labs, shared compute infrastructure and outcome-linked incentives tied to internships and project work,,” he said, adding that demand for education and skills remains structurally strong going into 2026.

India produces more than 15 lakh engineers annually, but hiring has become increasingly selective despite continued growth in digital and AI-driven roles, Chandra said.

“Employers are filtering for applied skills, not just degrees alone,” he said. “Compared to 2025, growth in 2026 will favour institutions delivering job-ready outcomes, especially institutions which produce world-class AI talent.”

He cautioned that this shift would exert pressure on low-quality capacity in the education system. “Growth will continue, but it will be quality-led, not volume-led,” Chandra said.

Highlighting deeper structural concerns, Chandra said capability mismatch remains the biggest challenge heading into 2026. “While enrolment has expanded rapidly, infrastructure and faculty readiness have not kept pace,” he said.

“India still spends under 3 percent of GDP on education against a long-stated 6 percent target. At the same time, our curriculum struggles to keep up with AI-led shifts even at top institutions” he added.

Emphasising the need for collaboration, Chandra called for coordinated action between government and industry. “The priority must be joint action — government enabling infrastructure and policy flexibility, and industry stepping in through internships, live projects and adjunct teaching,,” he said.

“Only with this alignment will scale convert into productive output,” he added. (PTI)