Budget 2025: Education Funding Rises but Still Lags Globally

The Union Budget 2025-26 allocated ₹1.28 trillion to the education sector, marking a 6.5% increase from the previous year. This is the lowest growth in the past four years.

Spending Comparison

Despite the rise, overall education spending remains below the NEP 2020 recommendation of 6% of GDP. For context, ₹1.20 trillion was allocated in 2024-25—a 7.14% jump from ₹1.12 trillion in 2023-24, and ₹1.04 trillion in 2022-23.

New Initiatives

This year’s budget introduced several measures to improve the quality of education. Key focus areas include artificial intelligence (AI) and the IITs. Finance Minister Sitharaman announced a boost for IITs and skill development, including plans to expand infrastructure at 5 post-2014 IITs to add 6,500 more seats. Additionally, a Centre of Excellence in AI for Education will be set up with an initial investment of ₹500 crore, and 5 National Centres of Excellence will help upskill youth with global expertise.

Challenges in Education Spending

While India has improved access to education, issues such as quality, infrastructure, and fair resource distribution persist. Education spending in India has mostly ranged between 3% and 4% of GDP over the last decade, fluctuating with economic conditions and government priorities. Increasing this spending to the target of 6% of GDP is seen as essential for long-term development.

Global Comparison

According to World Bank data for 2023, the US spent 6% of its GDP on education, and China spent slightly more at 6.13%. In contrast, India allocated only 4.6% of its GDP to education in its interim Budget for FY25. Germany spent 4.6% on primary and tertiary education (excluding R&D), and Japan invested 7.43% of its GDP in education. These figures highlight the gap between India and some major global economies.

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