Budget 2026: Educators seek reforms to strengthen learning and employability

As the government prepares the Union Budget 2026–27, voices from across India’s education and skilling landscape are pressing for a shift toward outcome-driven spending, warning that incremental allocations will fall short of the country’s long-term ambitions.

Education leaders from schools, higher education institutions, research bodies, and the startup ecosystem say the Budget must view education as a strategic investment rather than a welfare expense, especially in the context of the Viksit Bharat 2047 vision.

They argue that funding decisions this year will shape India’s ability to retain talent, strengthen innovation, and stay globally competitive.

Stakeholders are calling for sharper focus on learning outcomes in schools, full implementation of the National Education Policy 2020, stronger industry-linked universities, faster translational research, and wider access to affordable digital education.

Many say sustained and targeted investment is critical to converting India’s demographic advantage into economic growth.

Jeel Gandhi, CEO of Under25, said the upcoming Budget is a defining moment for India’s youth.

“With over 65% of India’s population under 35, the upcoming Union Budget is a pivotal moment for the country’s youth. It presents a critical opportunity to allocate dedicated funds and provide incentives that support early-stage funding and seed capital access and enable start-ups for young entrepreneurs,” said Gandhi.

“We expect a long-term vision of positioning India as a global hub for young talent, where these dedicated allocations will help reduce entry barriers and give a boost to youth-led innovation,” Gandhi added.

Gandhi said India’s youth potential needs stronger preparation through practical exposure. “Most fresh graduates in India face the same challenge – a degree in hand but limited skills in the real world.”

Gandhi continued, “Supporting structured, paid internships and industry-academia collaboration can significantly ease young Indians' transition from education to employment. This is essential to leverage India’s demographic dividend for economic growth.”

She also highlighted the need for better digital access and future-ready skills, saying, “Another area that needs consideration is affordable internet and digital infrastructure, particularly in Tier 2 and Tier 3 cities.”

“This will ensure equal access to opportunities, especially in the creator economy. Lastly, we also expect a stronger focus on Gen-Z-ready skills across digital, creative, communication, AI, and other new-age tech to build employability that sustains in the long run,” Gandhi added.

Niyati Handa, co-founder and director of Eklavya, said Budget 2026 should reset priorities in school education. “Looking ahead at Budget 2026, there is a bigger expectation that India’s education agenda will be recalibrated. The focus should move beyond enrollment numbers to learning outcomes, strengthening critical thinking, conceptual understanding, and teaching excellence that shape young minds.”

Handa called for higher allocations at the foundational level of schooling, adding, “A substantive increase in the budget for school education is essential, especially at the foundational level.”

“Investments to upgrade teacher training, curriculum modernization, and age-appropriate learning frameworks have to take place holistically to develop solid academic and cognitive roots for future-ready learners,” Handa added.

She said bridging the urban-rural divide must remain a priority. “When monetary assistance is enabled in scaling digital and hybrid learning models, it can significantly expand access to quality education in Tier 2, Tier 3, and rural regions, ensuring that geography does not limit potential.”

Handa also stressed the importance of teacher development and financial support for students. “Teacher capacity building also deserves sharper focus. Continuous upskilling of educators with evolving student requirements, new pedagogies, and even interdisciplinary approaches will be key to sustaining educational reform.”

“Additionally, certain policies can also be employed that reinforce merit-based pathways for students through scholarships and need-based financial support,” Handa said.

“In recent years, the steady outflow of highly skilled Indians in search of better prospects has increased more than ever and now poses a serious challenge to the country’s long-term economic and intellectual capital,” said Ajay Gupta, founder and CEO of Bachpan Play School, flagging rising concerns over talent migration.

Gupta cited data pointing to the scale of the issue. “Some reports indicate that our country’s Brain Drain Index is much higher than that of China, the United States, and other such developed economies.”

“In the year 2025 alone, over 1.8 million Indian students were estimated to be studying abroad, with return rates going frequently below 30%. The gravity of the issue is such that the cumulative impact of this talent outflow has the power to reduce our annual GDP growth by 1% to 2%,” Gupta added.

He said Budget 2026 must strengthen domestic education and research capacity. “With the Union Budget 2026 about to be announced, policymaking is expected to account for these realities.”

Gupta continued, “While last year’s budget focused on areas such as income tax reforms, development of infrastructure, technology, healthcare, and artificial intelligence, the need of the hour is a more sustained emphasis on strengthening domestic education systems, research institutions, industry-academia collaboration, and employment pathways.”

Naveen Mahesh, co-founder of Beyond 8, said India must rethink traditional education models. “Globally, countries leading in education are moving beyond rigid school-and-college-only models, experimenting with flexible, outcome-driven ways of learning. Employers, too, are increasingly valuing demonstrable skills and real-world competencies over conventional credentials.”

Mahesh said Budget 2026 offers a chance to accelerate this transition. “Budget 2026 presents an opportunity to shift India’s focus from inputs and degrees to learning outcomes and employability. This requires liberalizing teaching methods, encouraging alternative education models, and enabling institutions that prepare learners for real-world work, not just examinations.”

“Initiatives like Beyond 8 signal the direction India needs to move in, but isolated examples are not enough. We need thousands of such outcome-focused learning pathways, supported by policy, funding, and regulatory clarity, so that education aligns with what learners and future employers truly value,” he added.

Across the sector, education leaders agree that the upcoming Budget will be a critical test of whether India is ready to back its long-term growth ambitions with sustained, outcome-oriented investment in education and skills.