Union Budget 2025: Nirmala Sitharaman sets aside ₹1.28 Lakh Crore for Education; IITs witnessing a rise, IIMs facing cut of 50%

February 1, 2025

Today, Union Finance Minister Nirmala Sitharaman presented the Union Education Budget 2025 in Parliament. A total of ₹128,650.05 crore has been set aside for the education sector. The allocations under this budget cover funding for the Department of School Education and Literacy and the Department of Higher Education, focusing on the strengthening of educational institutions and schemes across the country.

Detailed Allocation of Budget 2025-26 for Education Sector

Education sector has received ₹128,650.05 crores for the financial year 2025-26 against the allocation of ₹124,638.77 crore that had been allocated last year. Department-wise breakup below:

School Education & Literacy : ₹78,572.10 crores (61% of total budget)

Higher Education : ₹50,077.95 crores (39% of total budget)

Department	2024-25 Allocation (₹ Crore)	2025-26 Allocation (₹ Crore)
School Education & Literacy	73,008.10	78,572.10
Higher Education	47,619.77	50,077.95
Total	1,24,638.77	1,28,650.05

Main Budget Provisions

1. Enhanced Provision for PM Schools for New India (PM SHRI)

The initiative of PM SHRI to transform more than 15,000 schools under the National Education Policy (NEP) 2020 has received an enhanced provision of ₹1,450 crore, which brings the total provision to ₹7,500 crore.

2. Increased Budgetary Support for Pradhan Mantri Poshan Shakti Nirman (PM POSHAN)

The PM POSHAN scheme that provides mid-day meals to school children has received ₹12,500 crore to further enhance student nutrition and educational outcomes.

3. Enhancement for Strengthening Teaching-Learning and Results for States (STARS)

The STARS project, with World Bank support, has again been allocated ₹1,250 crore to further improve education quality and outcomes in the states.

Main Heads of Expenditure under the Department of School Education and Literacy

A few of the main initiatives coming under the umbrella of the Department of School Education and Literacy have been allotted with a major chunk of funding.

Expenditure Head	2024-25 Allocation (₹ Crore)	2025-26 Allocation (₹ Crore)
Samagra Shiksha	37,500	41,249.98
Autonomous Bodies (including KVS & NVS)	15,638.67	15,430.58
Centrally Sponsored Schemes (including PM POSHAN)	57,427.39	62,660.00

Under the Samagra Shiksha scheme, for all-round education, ₹41,249.98 crore have been allocated.

Autonomous Bodies, like Kendriya Vidyalaya Sangathan and Navodaya Vidyalaya Samiti, saw a very slight reduction at ₹15,430.58 crore.

Centrally Sponsored Schemes have been enhanced to ₹62,660 crore and include PM POSHAN.

Additional Announcements for Education

50,000 Atal Tinkering Labs will be set up to foster innovation and technological advancements at the school level.
6,500 new IIT seats have been announced, strengthening technical education opportunities.
10,000 additional MBBS seats will be introduced to expand medical education and healthcare capabilities in the country.

IIMs Face Budget Cuts While IITs Get More Funding

The budget’s enhanced support for IITs is among its most noteworthy features, indicating the government’s emphasis on cutting-edge technical education and research. A drastic 50% budget decrease for IIMs, however, suggests a change in the higher education sector’s financial priorities.

Conclusion

This year’s Union Budget 2025 focuses on the government’s efforts in education, especially in school education, infrastructure development, and nutrition. Increasing allocations for PM SHRI, PM POSHAN, and STARS seem to be very strong commitments towards improving the quality of education, but the decline in funding for IIMs raises questions regarding the future strategy for management education in India. Overall, this budget aims at building a robust and inclusive education system that matches India’s long-term growth aspirations.

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