As the Union Budget 2026 approaches, India’s edtech sector is calling for a sharper alignment between education spending, employability outcomes and long-term skilling priorities. After a period marked by rapid expansion, regulatory scrutiny and consolidation, industry leaders say the focus must now shift to affordability, accountability, and building human capital that can compete globally.

Affordability remains a central concern for edtech founders, particularly as taxation continues to add to the cost burden for learners and families. Prateek Maheshwari, Co-Founder of PhysicsWallah, says easing this pressure is essential to ensuring equitable access to quality education across the country.

“My expectation for the budget is to make education affordable and accountable. I want to see a reduction in the GST on educational services. The current 18 per cent rate is a burden. Lowering this is essential to make quality learning accessible to every family,” Maheshwari says.

He also calls for a shift in how education spending is evaluated, advocating outcome-based budget allocation instead of input-heavy models. According to Maheshwari, linking public spending to learning outcomes and employability could be transformational for Bharat, ensuring that funding translates directly into impact rather than infrastructure alone.

Skilling and Intellect Capital at the Core

Beyond affordability, sector leaders believe skilling must remain at the epicentre of India’s economic strategy. Ronnie Screwvala, Entrepreneur, Investor and Co-founder of upGrad, says the Budget should reflect a clear focus on what India can offer the global economy.

“For me, the key part here is the single focus needs to be what does India need to offer to the world and how we are training ourselves up for that,” Screwvala says.

He points to the growing momentum around skilling, entrepreneurship, startups, MSMEs and rural empowerment as long-term growth drivers. India, he argues, must move beyond labour arbitrage towards what he calls “much higher intellect capital,” built through sustained investment in upskilling and entrepreneurship over the next decade.

A Measured, Long-Term Approach to AI

On artificial intelligence, edtech leaders are urging policymakers to take a balanced, long-term view rather than chasing short-term scale. Screwvala cautions against over-capitalising the AI sector, stressing that its real impact will unfold over several years.

“AI is not a 12-month story, it’s a two-three-four-year journey, and the impact will be felt most in healthcare, skilling and outsourcing,” he says.

He adds that while significant investment in data centres is necessary, innovation in education and skilling must be built step by step, with a focus on sustainable adoption rather than rapid monetisation.

Translating Digital Learning into Classroom Impact

At the school education level, founders say the challenge is no longer adoption but impact. Sumeet Mehta, CEO and Co-Founder of LEAD Group, says technology, particularly AI, can meaningfully strengthen classroom learning if embedded thoughtfully within school systems.

“As digital learning becomes integral to school education, the real challenge lies in translating potential into consistent classroom impact,” Mehta says.

He adds that Budget support for classroom digital infrastructure and continuous teacher upskilling will be critical. Mehta also flags the need for GST rationalisation on essential education inputs, including the removal of the 18 per cent GST on paper used for textbooks and lower taxes on digital learning tools, infrastructure and content used by schools, to ease cost pressures on parents and enable wider adoption of multi-modal learning.

Keeping AI Learning Accessible at Scale

For players focused on professional and higher education, accessibility remains a key concern as AI skills become increasingly critical to employability. Arjun Nair, Co-founder of Great Learning, says affordability will determine whether AI becomes a mass capability or a privilege.

“AI is set to be one of the strongest drivers of economic growth over the next decade, but its real impact will depend on how widely people can access and learn this technology,” Nair says.

He notes that short-term, online learning has emerged as the most practical pathway for India’s young workforce to build AI skills alongside work. Ensuring sensible taxation, affordable learner financing and sustained policy support for education and skilling providers, he argues, is essential to building a future-ready and inclusive workforce.