Of the total allocation, ₹500 crore will be used to set up a Centre of Excellence in Artificial Intelligence. The govt will also use the amount to increase the number of IITs in the country, improve medical education infrastructure, and create 50,000 Atal Tinkering Labs to foster innovation, and five National Centers for Excellence in Skilling for specialized vocational training.
In a major push to strengthen India’s educational infrastructure, Union Finance Minister Nirmala Sitharaman on Feb 1 presented the Union Budget 2025, outlining a comprehensive plan to establish a Centre of Excellence in Artificial Intelligence for education with a ₹500 crore investment and expanding the Indian Institutes of Technology (IITs) and medical education across the country.
The total allocation for the education sector in the 2025-26 budget is ₹1,28,650.05 crore.
Sitharaman introduced the Bharatiya Bhasha Pustak Scheme to provide digital Indian language books for schools and higher education, and said 50,000 Atal Tinkering Labs would be set up to foster innovation and create five National Centers for Excellence in Skilling to provide specialized vocational training.
Additionally, the government plans to enhance broadband connectivity for government schools and healthcare centers, she said.
“I had announced three centers of excellence in artificial intelligence for agriculture, health and sustainable cities in 2023. Now, a center of excellence in artificial intelligence for education will be set up with a total outlay of ₹500 crore." Sitharaman said in Lok Sabha.
The introduction of 10,000 PM Research Fellowships will support advanced research at IITs and IISc Bangalore, she said.
The Department of School Education and Literacy has been allocated ₹78,572.10 crore, which makes up 61% of the education budget. This funding will be directed towards strengthening school education and supporting various initiatives aimed at improving the quality of schooling across the country, she said.
The Department of Higher Education has received ₹50,077.95 crore, accounting for 39% of the total education budget. This allocation will facilitate the growth and expansion of higher education institutions in India.
About the government’s plans to establish five National Centers of Excellence for Skilling aimed at equipping youth with industry-relevant expertise, Sitharaman said, “These centers will be set up with global partnerships to support Make for India, Make for the World manufacturing.”
The initiative will focus on developing a comprehensive curriculum, training trainers, implementing a skill certification framework, and conducting regular assessments, she said.
Describing the budget as a strong push, particularly for the growth and expansion of IITs, and colleges offering AI courses, Gaurav Bhagat, founder of ‘Gaurav Bhagat Academy’ and leading skill trainer said such reforms can impact India’s future workforce.
"The Budget takes significant strides in advancing India's education landscape, particularly with its strong push towards AI-driven learning and infrastructure expansion. The ₹500 crore allocation for AI institutes signals India's commitment to equipping students with future-ready skills, aligning with the global demand for AI expertise, which is expected to create over 11 million new jobs by 2030 (WEF).” Bhagat told Education Post.
“Also expanding IIT capacity from 65,000 to 1.35 lakh seats is a game-changer, ensuring that more students gain access to world-class education. Additionally, the focus on broadband connectivity in rural schools and healthcare centers will bridge the digital divide, fostering inclusive learning opportunities,” he added.
According to Bhagat, these reforms lay the foundation for a tech-driven, innovation-led education system.
“However, to maximize impact, the next step must be strengthening teacher training and industry collaborations to ensure students are job-ready in a rapidly evolving digital economy." he added.
Key Highlights:
50,000 Atal Tinkering Labs
To encourage innovation, 50,000 Atal Tinkering Labs will be established over the next five years. These labs will help students explore science, technology, and engineering through hands-on learning.
5,000 more seats in IITs
The government plans to expand five IITs, adding 5,000 new seats and upgrading infrastructure, particularly at IIT Patna, to accommodate a growing student population and improve facilities.
10,000 new medical seats
About 10,000 new medical seats will be added next year as part of a five-year plan to increase medical education capacity to 75,000 seats, addressing the growing demand for healthcare professionals.
Broadband connectivity for schools & health centers
The budget includes a plan to provide broadband connectivity to all government secondary schools and primary healthcare centers, enhancing access to education and healthcare across the country.
Bharatiya Bhasha Pushtak Scheme
To promote inclusive education and preserving regional languages, Bharatiya Bhasha Pushtak scheme will make Indian language books available digitally for schools and universities.
National centers for skilling excellence
The government will set up five National Centers for Excellence in Skilling, offering specialized vocational training with global expertise to prepare students for emerging job markets.
PM Research Fellowship
To provide enhanced financial support to top students in Science and Technology, and to promote research, the government will offer 10,000 PM Research Fellowships at IITs and IISc Bangalore.
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