Public Education Sees No Real Growth in Union Budget 2025-26
The Union Budget 2025-26 has once again demonstrated a lack of priority for public education, continuing a trend of constrained spending in the sector. While nominal allocations may suggest an increase, the impact of inflation and a reliance on alternative funding mechanisms such as Higher Education Financing Agency (HEFA) loans and Madhyamik and Uchhatar Shiksha Kosh (MUSK) funds significantly reduce actual expenditure on education.
Limited Growth in Education Budget
The total budget estimate for the education sector in 2025-26 stands at ₹1,28,650 crore, marking a 6.7% nominal increase from the revised allocation of ₹1,20,628 crore in 2024-25. However, with an average inflation rate of 5.2%, the real increase is only 2.5%, leaving little room for meaningful expansion in education programs.
For school education, the Department of School Education and Literacy has been allocated ₹78,572 crore, reflecting a 7.6% nominal increase from ₹73,008 crore in 2024-25. However, in real terms, this amounts to only a 2.4% increase after adjusting for inflation. A more alarming trend is the reduction in revised estimates for 2024-25, which stood at ₹67,571 crore—7.5% lower than the initial budget estimates, indicating a pattern of underutilization and cuts.
In higher education, the Department of Higher Education received ₹50,078 crore, a 5.2% increase from ₹47,584 crore in 2024-25. With the inflation rate factored in, this results in no real growth. Additionally, last year’s revised estimates were 2.4% lower than budget estimates, suggesting that actual spending in higher education is likely to be lower than planned again this year.
Declining Support for Key Educational Institutions
The allocations for major higher education institutions further highlight the lack of substantial investment in public education:
- University Grants Commission (UGC): ₹3,336 crore (33% increase), but ₹2,447 crore is under MUSK, leaving little for actual expenditure.
- All India Council for Technical Education (AICTE): ₹200 crore, reflecting a 50% decline compared to 2024-25.
- Central Universities: ₹16,146 crore, a 4.4% nominal increase, which translates to a real-term decline.
- Indian Institutes of Technology (IITs): ₹16,691 crore, a 4.6% increase, but ₹4,000 crore is under MUSK, reducing actual funds.
- National Institutes of Technology (NITs) and Indian Institutes of Management (IIMs): ₹5,474 crore and ₹252 crore, respectively, with significant portions allocated to HEFA loan repayments rather than direct funding.
- Indian Institute of Science Education and Research (IISERs): ₹1,331 crore, reflecting a 9.4% decline from ₹1,469 crore in 2024-25.
- Indian Institute of Science (IISc): ₹894 crore, a 5.9% increase, barely keeping up with inflation.
Increased Dependence on HEFA and MUSK
A notable trend in this budget is the growing reliance on alternative financing mechanisms like HEFA loans and MUSK funds, which do not contribute directly to education expenditure.
- HEFA loan repayments: Large portions of education funding are being diverted to interest payments and principal repayments, reducing actual spending on academic development.
- MUSK corpus: Although ₹5,500 crore has been allocated under MUSK, these funds remain largely unutilized, with no clear direction for their usage in secondary and higher education.
The Impact on Public Education
The Union Budget 2025-26 reinforces the government’s shift away from direct public education funding, creating long-term challenges such as:
- Stagnant or declining real investments in school and higher education.
- Increasing privatization pressure, as public institutions struggle with limited resources.
- Burdening institutions with debt, as HEFA loans become the primary funding mechanism instead of direct grants.
- Underutilization of collected education cess, with MUSK funds remaining unallocated for essential programs.
Conclusion
The 2025-26 budget reflects a continued policy of reducing direct investment in public education, with inflation-adjusted stagnation in funding and a growing reliance on loan-based financing. These trends indicate that public education is not a priority for the government, potentially leading to greater inequities in the education system. Addressing these concerns requires stronger policy interventions, transparent budget allocations, and active advocacy to ensure that quality education remains accessible to all.
