Govt goes to school to upskill, focus on higher education

The Union budget has laid emphasis on education and upskilling, aimed at reducing the skill gap in the country that has often led to productivity loss and a lack of employment opportunities. 

Finance minister Nirmala Sitharaman on Saturday rolled out a plethora of initiatives that included broadband connectivity to schools and skilling centres, and increasing the capacity of leading engineering and medical colleges to ease the competition for a seat. 

"Broadband connectivity will be provided to all government secondary schools and primary health centres in rural areas under the BharatNet project," Sitharaman said in her budget speech in Lok Sabha. BharatNet is the government’s telecommunications initiative to provide broadband connectivity to rural India.

A key focus for the government in this budget has been the push to increase seats in higher education. The government will add 6,500 seats in some of the newer IITs built in the last decade. In 2024, around 12,25,529 students appeared in both sessions of the Joint Entrance Examination Main (JEE-Main) examination, aiming to make the cut for the 17,740 seats available across 23 Indian Institutes of Technology (IITs). 

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"Every region has to grow, and we need to take quality education to these regions, specifically the IIT quality education. I think this announcement of funding for the new IITs and expansion of these IITs is a major step coming at the right time," said V. Kamakoti, director of IIT Madras, one of the older IITs. 

A similar step was taken for the medical seats. "Our government has added almost 110,000 UG and PG medical education seats in ten years, an increase of 130%. In the next year, 10,000 additional seats will be added in medical colleges and hospitals, towards the goal of adding 75,000 seats in the next 5 years," Sitharaman said.  

In 2024, as many as 2,333,297 students registered for the National Eligibility-cum-Entrance Test (NEET) examination, aiming for 1,06,333 undergraduate medical seats available across campuses. 

However, this step may not be sufficient to solve the burgeoning challenge amongst students for a seat in higher education. "Private sector Institutions have filled in this requirement and, in recent times, have improved their research quotient as well - why is there not an enabling environment and incentives to encourage them to expand and contribute," said Narayan Ramaswamy, who leads the education, skill development and social sector advisory practice for KPMG India, raising his concerns over the incomplete growth initiatives towards the higher education sector.

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It must be noted that although the emphasis on higher education is on, there is a critical supply-demand gap between academia and the industry.  The Economic Survey released on Friday highlighted that 53% of graduates and 36% of postgraduates are underemployed in roles below their educational qualifications.

The government aims to set up 50,000 Atal Tinkering Labs in government schools over the next five years to raise the curiosity levels among children. According to the Economic Survey, government schools comprise 69% of the 1.47 million schools in India and educate 50% of the country's students.

Sitharaman also announced ₹500 crore to set up Centres Of Excellence in Artificial intelligence for education. Artificial intelligence (AI) is gaining traction in India Inc., and employees are getting trained across hierarchies in the latest technology. 

"This is a pivotal moment as we close the AI talent gap, ensuring that India is not just a consumer of AI but a creator of cutting-edge solutions. The collaboration between the private sector, premier educational institutions, and research bodies will accelerate the development of AI models tailored for education...” said Mahesh Makhija, technology consulting leader, EY India.

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The government plans to set up five National Centres of Excellence for Skilling with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing. “The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews,” the finance minister added. 

However, more needs to be done in the skilling and education sector. "There have not been major changes even though the total budget has increased by around 15% over last year's revised estimates from ₹1.12 lakh crore to ₹1.28 lakh crore. Announcement of setting up 50,000 new Atal Tinkering Labs and broadband to all government secondary schools is a welcome step - but is not matched by budget allocation," said Suchindra Kumar, partner and education sector leader at PwC.

The budget makes space for the PM Research Fellowship Scheme, aiming to create 10,000 fellowships over the next five years for technological research in IITs and the Indian Institute of Science.

"For higher education, the budget for the national apprenticeship scheme has almost doubled, which will create about 10 lakh paid apprenticeships for Indian youth," he added.

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The National Apprenticeship Training Scheme (NATS) aims to bridge skillset gaps, which apprenticeship programmes and vocational training courses often fail to do. The government has set aside ₹1,178 crore for 2025-26 for the scheme, versus ₹600 crore in the previous year.