Budget 2025: Five Key Expectations for the Education Sector

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Nirmala Sitharaman, India's Finance minister, during a news conference in New Delhi, India, on Tuesday, Feb. 1, 2022. The Reserve Bank of India will launch its digital currency in the year starting April 1, Finance Minister Nirmala Sitharaman said in her budget speech on Tuesday. Photographer: T. Narayan/Bloomberg via Getty Images

As India prepares for the Union Budget 2025, the education sector is poised for significant developments. With a focus on AI integration, innovation, teacher training, financial accessibility, and skill development, stakeholders anticipate reforms that align with the National Education Policy (NEP) 2020.

1. AI Integration in Education

  • The India Artificial Intelligence (AI) Mission, backed by a ₹10,371.92 crore investment, aims to strengthen the country’s AI ecosystem.
  • Experts recommend a 5-10% budget allocation for AI in education, including high-speed internet, digital tools, and AI labs in schools and colleges.
  • Educator training in AI pedagogy is also a key priority to ensure effective implementation.

2. Investing in Innovation and Teacher Training

  • Education experts stress the need for modernizing schools to bridge gaps between technology, 21st-century skills, and workforce needs.
  • Investments in teacher training and leadership development are crucial to equipping educators for transformation.
  • The focus should be on creating exemplary school models that set the standard for future education.

3. GST Exemption and Affordable Education

  • Calls for a 100% GST exemption on education expenses for Below Poverty Line (BPL) and Low-Income Group (LIG) students to improve accessibility.
  • High GST rates on higher education and online courses (18%) are seen as a barrier to enrollment.
  • Interest-free student loans and reduced tax rates could help boost the Gross Enrollment Ratio (GER), which India aims to increase to 50% by 2035.

4. Boosting Startups and Skill Development

  • The Union Budget 2024 introduced several skill development initiatives, such as:
    • Upgrading 1,000 ITIs under a hub-and-spoke model.
    • Aligning courses with industry skill requirements.
    • Providing training to 20 lakh students over five years.
  • Further support for ed-tech startups is needed, including financial subsidies, grants, and incubation assistance for startups focusing on AI in education.

5. Addressing Digital Gaps in Rural Education

  • The Bharatnet Project is expanding broadband access to rural schools, but further investment is needed to bridge the urban-rural digital divide.
  • Reduced GST on education services would make digital learning more accessible to middle-class families.
  • Vocational training platforms must be prioritized to address India’s skill gap and improve employability.

Conclusion

The Union Budget 2025 presents a critical opportunity to shape the future of education in India. By prioritizing AI, teacher training, financial accessibility, digital infrastructure, and skill development, the government can lay a strong foundation for inclusive and future-ready learning.

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