With Union Budget 2025 on the horizon, the public eagerly anticipates initiatives aimed at transforming various sectors, with a strong focus on education. Expectations for this year include reductions in GST on education services, measures to bridge the skill gap, the expansion of vocational training platforms, and enhancements to digital infrastructure. Finance Minister Nirmala Sitharaman will present her eighth budget speech on February 1, 2025, and significant reforms in the education sector are expected.
In Union Budget 2024, Finance Minister Sitharaman highlighted the government’s focus on employment, skilling, MSMEs, and the middle class for the next five years. Specifically, she identified “employment and skilling” as the second priority of the Modi government, announcing various schemes to support these areas. Notably, an allocation of Rs. 1.48 lakh crore was made for education, employment, and skilling.
Investing in Innovation and Teacher Training for Education
As Budget 2025 approaches, education experts have begun outlining their expectations for the sector. Sandeep Rai, founder of The Circle India, an NGO focused on transforming education for underserved communities, emphasized the urgent need for investments in innovation to reinvent schools.
“It’s widely accepted that school, as we know it, is obsolete. India is playing catch-up with the rest of the world—at our current pace, we’re never going to win that race. We have to leapfrog. We need to invest in bridging the gap between technology and education, 21st-century skills and today’s schools, workforce needs, and academia. We can start by creating models of excellence—schools that exemplify what the future of education should be,” said Rai.
He further stressed the importance of teacher training and leadership development, urging the government to focus on preparing educators to drive meaningful change.
“Leapfrogging isn’t possible unless we have cadres of teachers and school leaders who are ready, equipped, and energized to make those jumps. What would it take for this year’s budget to invest not just in capacity building but also in reinventing the very role of the teacher?” Rai added.
GST Exemption and Affordable Education for Disadvantaged Students
Another key area of focus is the financial accessibility of education, especially for disadvantaged students. Prateek Mashewari, Co-Founder of Physicswallah, argued that students from Below Poverty Line (BPL) and Low Income Group (LIG) families should be granted 100% GST exemption on all educational expenses, including test-prep courses and job-oriented skill courses.
“The 18% tax slab on higher and online education, including skilling, is extremely high. In countries like Switzerland, education services are free, regardless of the mode or type of education, while even in a country like China, it stands at just 6%,” Mashewari said, drawing comparisons with other developed countries.
In September 2023, University Grants Commission (UGC) chairman M Jagadesh Kumar announced the goal of raising India’s gross enrolment ratio (GER) to 50% by 2035. While this goal is ambitious, Prateek emphasized that high tax rates on education create barriers to access, discouraging potential learners.
In Union Budget 2024, Finance Minister Sitharaman announced financial assistance of up to Rs 10 lakh for higher education in domestic institutions, offered through e-vouchers and a 3% interest subsidy for one lakh students annually. Prateek urged that Budget 2025 focus on affordable degrees and rationalizing interest rates for student loans, including interest-free loans for economically disadvantaged students.
“Another important step toward creating affordable degrees is rationalizing interest rates for student loans and offering interest-free loans for economically disadvantaged students,” said Mashewari.