Edtech sector leaders believe that the Union Budget 2026–27 sends a clear signal that India’s growth story will hinge on employability, AI readiness, and outcome-driven education, even as the industry’s long-standing demand for GST rationalisation on online learning services went unmet.

With a strong push towards the ‘Education to Employment and Enterprise’ framework, skilling infrastructure and industry-linked learning, the Budget appears to pivot from access-led expansion to talent conversion at scale.

In Budget 2026–27, the Ministry of Education received one of its highest allocations yet, alongside announcements such as the proposed ‘Education to Employment and Enterprise’ Standing Committee, university townships near industrial corridors, modular skilling frameworks designed by professional bodies, and a reduction in TCS on education and medical expenses to 2 per cent. 

Anuj Vishwakarma, CEO – Higher Education Programs, upGrad, described the shift as structural rather than symbolic.

“This Budget recognises a hard truth: India’s growth will be driven not by access to education alone, but by how quickly learning converts into productive talent. The clear mandate around skilling, AI readiness, and ‘Education to Employment’ reflects an understanding that the future of work is already here. AI is not a threat to India’s workforce, it is a force multiplier for productivity – and by linking education, industry, and emerging technologies, the government is laying the foundation for large-scale, continuous reskilling,” he said.

“Interventions spanning farmers in the field, women in STEM, or even supporting professional bodies like ICAI and ICSI to design modular, short-term courses signal a decisive shift towards applied, outcome-led learning; its time we leap into the next phase of implementation to build talent pipelines,” Vishwakarma added.

His remarks underline a key takeaway from this year’s Budget: the government appears intent on formalising modular, short-term, industry-designed learning as mainstream policy rather than a parallel alternative.

Towards a Structured Ecosystem

Ranjita Raman, CEO, Jaro Education, sees the announcements as aligned with India’s long-term economic ambition.

“By placing skill development and industry-linked education at the core of its agenda, the government has clearly acknowledged the need to bridge the gap between learning and employability. The proposal to develop university townships near industrial corridors and to set up an Education to Employment and Enterprise Standing Committee reflects a practical, outcome-focused approach, especially for strengthening the services sector.”

She further highlighted the continued emphasis on research, digital learning and innovation as critical to scaling national reskilling efforts. Importantly, she pointed to the reduction in TCS from 5 per cent to 2 per cent on education and medical expenses as a financial relief measure that could ease participation in higher education and career advancement, particularly for working professionals funding their own upskilling.

That TCS rationalisation has emerged as one of the few direct financial levers impacting learners this year, especially in a sector that had sought GST relief but did not receive it.

AI, Emerging Tech and Global Competitiveness

For Prateek Shukla, Co-Founder & CEO, Masai, the Budget is “good news for young workforce.”

“The Union Budget 2026 is good news for the young workforce. Families will save money, and more people will be able to get a good education as the TCS on education and medical costs is lowered from 5% to 2%. This is especially important now that everyone needs to learn new skills.”

He emphasised that the government’s technology-led growth narrative stands out most strongly. The focus on AI, emerging technologies, and industry-driven research reflects a labour market reality where roles are evolving faster than traditional academic systems can adapt.

Shukla also noted that initiatives like the proposed ‘Education to Employment and Enterprise’ Standing Committee acknowledge a long-overdue need to close the gap between degrees and real-world employability, particularly in tech and services.

The continued push for structured skilling ecosystems, training facilities, and innovation clusters, he added, would be critical to ensuring India remains competitive in high-value digital services globally. 

Human Capital Engineering and Tier-2/Tier-3 focus

Nikhil Barshikar, Founder & CEO of Imarticus Learning, described the Budget as marking a philosophical shift.

“The Union Budget 2026–27 signals a transition from reactive skilling to proactive human capital engineering through the new ‘Education to Employment and Enterprise’ (E2E) framework.”

He highlighted the institutionalisation of a ‘Corporate Mitra’ cadre, accredited para-professionals trained through modular courses designed by bodies like ICAI, ICSI and ICMAI, as a particularly strategic move. By deploying such professionals in Tier-2 and Tier-3 cities, he argued, the government is attempting to bridge what he termed a “compliance-capability gap” that often limits MSME growth.

The Bigger Picture: Maturity, not Subsidy

Taken together, edtech leaders appear broadly optimistic about the direction of Budget 2026 — particularly its emphasis on AI readiness, structured skilling, modular learning, and industry integration.

However, the optimism is strategic rather than celebratory. While policy alignment with employability and emerging technologies is seen as a long-term growth driver, the absence of sector-specific tax relief or direct incentives suggests that edtech firms will need to capitalise on partnerships, B2G models, and outcome-based offerings rather than fiscal cushions.

If previous budgets focused on access and expansion, Budget 2026 seems to sharpen the next question: not how many Indians are educated, but how many are employable, adaptable and globally competitive.