Education Budget 2025: Artificial Intelligence, IITs and medical colleges get major boost
In the 2025 Budget, Finance Minister Nirmala Sitharaman sets aside Rs 500 crore for three centres of excellence in AI, expands IITs and medical seats to meet growing demand
Finance Minister Nirmala Sitharaman unveiled the Union Budget for Education 2025 on Saturday (February), marking a big step towards modernising India’s education sector. In her eighth Budget presentation, Sitharaman highlighted the government’s focus on advancing higher education and vocational training, with a Rs 500 crore outlay for the establishment of three Centres of Excellence in Artificial Intelligence (AI). The announcement comes as part of a broader vision to enhance educational infrastructure and strengthen India’s position in the global knowledge economy.
The education sector also saw substantial promises for the expansion of the Indian Institutes of Technology (IITs) and the medical education sector. This includes an increase in the number of medical seats, an effort to address the country’s long-standing demand for more healthcare professionals. IITs, recognised as the crown jewels of India’s educational infrastructure, are expected to receive more resources and be further expanded to accommodate the growing number of engineering aspirants. In addition to these measures, the Union Budget 2025 also builds on last year’s announcement, where ₹1.48 lakh crore was allocated to education, employment, and skill development.
Focus on AI, medical education, and teacher training
The government’s strategic push towards AI-driven education is seen as a pivotal move to align India with global technological trends, with China’s Deep Seek having shaken the global markets. The three new Centres of Excellence for AI will be crucial for creating a robust educational framework that integrates AI across curricula, teacher training, and research. With an outlay of Rs 500 crore, the centres aim to provide world-class AI infrastructure, offer specialised training, and foster innovation through research and development.
In the medical education sector, Sitharaman’s Budget promises a major boost with increased funding for the expansion of medical colleges. The government has pledged to utilise existing hospital infrastructure to create new medical colleges, responding to the critical shortage of healthcare professionals in India. The number of medical college seats is set to increase significantly, a move that will help alleviate the pressure on India’s health system.
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Sitharaman underlined the importance of quality teacher training as a key to educational reform. Teacher training programmes, particularly in the fields of AI and digital literacy, will be enhanced to equip educators with the skills necessary to impart knowledge in a rapidly changing technological landscape.Financial support for students, strengthening infrastructure
In another major announcement, the Union Budget 2025 introduces a new initiative aimed at providing long-term financial support for students pursuing higher education. The government plans to establish a dedicated corpus for education loans, offering long-term financing with low-interest rates. This move is expected to ease the financial burden on students and their families, particularly for those pursuing education in prestigious institutions like the IITs, medical colleges, and other centers of excellence.
Additionally, the government has pledged to boost the infrastructure of schools and universities across India. A focus on upgrading physical and digital infrastructure will ensure that students have access to state-of-the-art learning environments. This includes building new classrooms, libraries, laboratories, and digital platforms that can support virtual and hybrid learning models. With the growing popularity of online education, especially in the wake of the pandemic, the government’s investment in digital infrastructure will be key in creating a more inclusive and accessible educational ecosystem.
The Bharatiya Bhasha Postak scheme was also introduced as part of the Budget to enhance language learning. Under this initiative, books will be provided in digital form to students, enabling them to better understand their subjects in their regional languages. This move is expected to bridge the gap in language proficiency, particularly in rural areas, and create a more inclusive learning environment across India’s diverse linguistic landscape.
Road ahead for the education system
The Economic Survey 2024-25, released a day before the Union Budget, provided a snapshot of India’s education system, offering valuable insights into the challenges and progress made thus far. According to the survey, India’s school education system serves 24.8 crore students across 14.72 lakh schools, with 98 lakh teachers. The government school system accounts for the majority of the enrolments, with 69% of schools and 51% of teachers in public schools. However, private schools, which account for 22.5% of schools, have made big strides in providing quality education to 32.6% of students.
The survey also outlined the government’s efforts to meet the ambitious targets set by the National Education Policy (NEP) 2020, which aims to achieve 100% Gross Enrolment Ratio (GER) by 2030. While GER is nearly universal at the primary level (93%), efforts are being made to improve enrolment at the secondary and higher secondary levels, which stand at 77.4% and 56.2%, respectively. These efforts will require sustained investment and targeted policies, which the Union Budget 2025 seeks to address through increased funding and new initiatives.
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For the 2024-25 financial year, the government allocated ₹1.20 lakh crore to the education sector, a 6.84% increase from the previous year. This included ₹73,008.10 crore for school education and ₹47,619.77 crore for higher education. The government has also earmarked ₹4,200 crore for the PM SHRI scheme, a flagship initiative aimed at upgrading schools with modern facilities and digital resources. The emphasis on school education saw a modest increase in funding, while higher education received a more substantial rise in its Budget allocation, reflecting the growing demand for advanced academic and technical training in India.
The educational reform
With a focus on AI, medical education, teacher training, and increased financial support for students, the Budget for 2025-2026 aims to strengthen the foundations of India’s future workforce. While the expansion of IITs, medical colleges, and AI Centres of Excellence is a welcome step, the success of these initiatives will depend on effective implementation, sustained funding, and ongoing monitoring. The government’s continued focus on improving both the quality and accessibility of education is crucial if India is to meet its educational and economic aspirations in the years ahead.
As India moves towards realising the vision of the NEP 2020 and other long-term educational goals, Budget 2025 provides a blueprint for transforming the country’s educational landscape. It remains to be seen whether these initiatives will be able to bridge the gaps in the system and prepare students for the challenges and opportunities of tomorrow’s world.