Budget 2026 focuses on AI, digital education but concerns over inequalities remain

Artificial intelligence (AI) and digital platforms dominated the Union Budget 2026’s education outlay, with sharp hikes in allocations for AI-driven initiatives and academic digital infrastructure. However, this technology-heavy push is not matched by commensurate investment in student access, connectivity, or teacher preparedness, raising concerns about widening inequalities within the education system.

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The Budget earmarked Rs 250 crore for Centres of Excellence in Artificial Intelligence and Rs 100 crore for AI initiatives in education — up sharply from Rs 120 crore and Rs 17 crore, respectively, in the Revised Estimates (RE) for 2025-26. This expansion of AI-focused spending is accompanied by a substantial allocation of Rs 2,200 crore for the PM One Nation One Subscription (PM-ONOS) scheme, aimed at providing centralised access to academic journals and research publications, compared to Rs 2,023.25 crore in the 2025-26 RE.

Are there true changes on ground?

Yet, these headline-grabbing investments are not supported by clear budgetary provisions for student devices, last-mile internet connectivity, or upgrading digital infrastructure in government institutions, particularly in rural and marginalised regions. Funding for teacher preparedness also remains limited. The Malaviya Mission for Teacher Training has been retained at Rs 70 crore, with no significant expansion to equip teachers for digital or AI-enabled pedagogy.

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While the total education allocation for 2026-27 has risen to Rs 1.39 lakh crore from Rs 1.22 lakh crore in the 2025–26 RE, the revised estimate represents a cut of nearly Rs 6,700 crore compared to the 2025-26 Budget Estimates (BE). Critics argue that even the nominal increase masks a real decline in spending once inflation is accounted for.

'Govt spending less per student'

“The overall education allocation in BE 2026-27 has risen only marginally over BE 2025-26. The increase is lower than the current inflation rate of 5-6%, resulting in a real cut. Several higher education and research institutions show flat allocations or increases of just 1-3%, which are insufficient even to meet salary and operational costs. In effect, the government is spending less per student in real terms,” Congress MP from Tamil Nadu, Manickam Tagore, said in a post on X.

By limiting the financial capacity of state governments, which shoulder a large share of education spending, the Centre is further constraining overall public investment in education.

In school education, the Department of School Education and Literacy received a net allocation of Rs 83,562 crore, up from Rs 70,567 crore in the 2025-26 RE. However, the REs themselves were significantly lower than the original Rs 78,571 crore allocated in the 2025-26 Budget, pointing to underutilisation or retrenchment during the year.

Also read: What does each state get from Budget 2026-27?

Centrally Sponsored Schemes (CCS) continue to dominate school education spending. Samagra Shiksha remains the principal funding vehicle at Rs 42,100 crore, up from Rs 38,000 crore in the previous RE. PM POSHAN (midday meals) was allocated Rs 12,750 crore, while funding for PM SHRI schools rose to Rs 7,500 crore.

Higher education spending falls behind

Higher education received Rs 55,727 crore, up from Rs 51,382 crore in the 2025-26 RE. Allocations for central universities increased to Rs 16,696 crore, the University Grants Commission received Rs 3,709 crore, and the All India Council for Technical Education saw a modest rise to Rs 230 crore.

Despite these increases, higher education spending continues to lag behind school education, with additional funds largely concentrated in select institutions and technology-driven programmes. Scholarships, fellowships, and student hostels see no major expansion in this Budget.

Expert cites failing investments

“Investment in education as a share of GDP has been steadily declining. Since 1985, the stated target has been six per cent of GDP. It has never crossed four per cent, and now it is falling further. Despite repeated claims of strengthening the National Education Policy 2020, investment is the one area where the government has consistently failed,” Surajit Mazumdar, president of the Federation of Central Universities Teachers Association, told The Federal.

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He also pointed to the broader fiscal architecture. “By limiting the financial capacity of state governments, which shoulder a large share of education spending, the Centre is further constraining overall public investment in education,” he said.

According to the Expenditure Profile, transfers to states under the CCS, Finance Commission grants, and other heads were cut by Rs 2,03,802 crore in the 2025-26 RE compared to the Budget Estimates. The BE for 2026-27 projects a further reduction of Rs 59,457 crore compared to the 2025-26 BE, intensifying concerns about states’ ability to fund schools and universities.

FM announces educational initiatives but...

In her Budget speech on Sunday (February 1), Union Finance Minister Nirmala Sitharaman announced a slew of educational initiatives. She said the Centre would “support states” in creating five university townships near major industrial and logistics corridors, envisaged as academic zones hosting universities, research institutions, skill centres, and residential facilities.

She also announced capital support for one girls’ hostel in every district, citing challenges faced by women students in STEM institutions due to prolonged study and laboratory hours. Additionally, four telescopes and astronomy infrastructure facilities, including the National Large Solar Telescope and the Himalayan Chandra Telescope, will be set up or upgraded, she said.

“In every budget for the last nine years, the finance minister has announced various schemes. We are yet to see the realisation of many of these,” said Mazumdar.