Union Budget 2026: Education Gets Rs 1.39 Lakh Crore, Major Push for Health and Skilling!

The Union Budget for 2026–27 has placed strong emphasis on education, healthcare training and skilling, with Finance Minister Nirmala Sitharaman announcing a total allocation of ₹1,39,289.48 crore for the education sector. Presenting her ninth Union Budget on February 1, 2026, and the first from Kartavya Bhavan, the Finance Minister outlined a series of reforms and new institutions aimed at strengthening India’s human capital and aligning education with future workforce needs.

Out of the total education outlay, ₹83,562.26 crore has been earmarked for school education, while ₹55,727.22 crore has been allocated to higher education. The government’s focus this year has been largely on medical, health and allied education, along with design, research and industry-linked skilling programmes.

As part of the key announcements, the Finance Minister proposed the establishment of three new National Institutes of Pharmaceutical Education and Research (NIPERs) and the upgradation of the existing seven NIPERs to enhance advanced training, research capabilities and industry collaboration. In addition, one new National Institute of Design (NID) will be set up in the North East region to address the growing demand for skilled designers in India’s expanding creative economy.

The Budget also announced the creation of five new university townships in industrial and logistics hubs. These townships are envisioned as integrated education clusters hosting multiple universities and colleges, residential facilities and shared research infrastructure, with the aim of improving access to quality higher education and fostering innovation-led growth.

A major highlight of the Education Budget 2026–27 is the renewed push for healthcare and allied professions. The Finance Minister announced the establishment of three new All India Institutes of Ayurveda (AIIAs) to strengthen traditional medicine education and training. Another National Institute of Mental Health and Neuro Sciences (NIMHANS)-like institution will be set up in northern India, in addition to upgrades for existing facilities, including the institute in Ranchi. Currently, the premier NIMHANS campus is located in Bengaluru.

The government has set an ambitious target of training one lakh allied and healthcare professionals over the next five years. Allied Health Professional (AHP) education will be expanded across 10 key disciplines, including anaesthesia technology, optometry, radiology, operating theatre technology, applied psychology and behavioural health. This initiative builds on the Centre’s ongoing efforts to standardise allied health training through the National Commission for Allied and Healthcare Professionals (NCAHP) and is aimed at addressing shortages in hospitals and community health systems.

Further strengthening pharmaceutical and medical education, the Budget proposed a ₹10,000-crore bio-pharma sectoral development outlay to support pharmaceutical education, clinical training and research ecosystems across the country.

Skilling and employability also featured prominently in the Finance Minister’s speech. Professional bodies such as the ICAI, ICSI and ICMAI will be involved in designing short-term modular courses and practical toolkits to create a new cadre of “corporate mitras”. These programmes will focus on providing locally available professional support in accounting, compliance and corporate governance, particularly for small businesses in tier-2 and tier-3 cities.

On the research front, the Finance Minister reiterated the government’s commitment to the Anusandhan Research Fund and announced the creation of a high-powered education-to-employment standing committee. This body will focus on employment generation, integration of AI-linked skills and aligning higher education with evolving labour market requirements.

The Budget also included measures to strengthen gender inclusion in education. Through viability gap funding or capital support, the government plans to establish one girls’ hostel in every district, with special emphasis on regions with low female participation in STEM education.

In the previous fiscal year, the education sector received ₹1,28,650.05 crore, reflecting a 6.65 per cent increase over earlier allocations. Spending on higher education rose by 7.74 per cent to ₹50,077.95 crore in 2025–26, while school education and literacy was allotted ₹78,572 crore, nearly ₹11,000 crore higher than the revised estimates. Despite the steady rise, education stakeholders continue to urge the government to increase education spending to 6 per cent of GDP, in line with the targets outlined in the National Education Policy 2020.

Overall, the Education Budget 2026–27 signals a decisive shift towards health education, skilling, research and creative disciplines, with the government aiming to build a future-ready education ecosystem that supports both economic growth and social development.