India's Union Budget 2025: Prioritizing Education, Skilling, and AI for Future-Ready Workforce

Union Budget 2025: Investing in People, Innovation, and Rural Prosperity

The Union Budget 2025 outlines a transformative agenda that addresses our economy's immediate needs while paving the way for a sustainable future. This budget reflects our government's commitment to the common man of India, ensuring that every citizen can thrive in a rapidly evolving landscape. The government's strategic planning for this budget reflects a deep understanding of the challenges faced by our society. The proposed development measures in the Budget 2025 span broad areas focusing on enabling employment-led development, investing in people, economy and innovation, and taking everyone together on an inclusive growth plan. Discussing about the budget, Shri Jayant Chaudhary, Hon'ble Minister of State (I/C), Ministry of Skill Development and Entrepreneurship (MSDE) and Minister of State, Ministry of Education, Govt. of India said "The Union Budget 2025 reflects a forward-looking vision that not only strengthens economic growth through tax reforms but also prioritizes key sectors driving India's future. From enhancing Kisan Credit Card limits and boosting cotton productivity to empowering startups and MSMEs through credit guarantees, these measures will accelerate entrepreneurship and rural prosperity. The focus on deep tech funding, AI-driven education, and five Centers of Excellence in skills underscores India's commitment to a future-ready workforce. Additionally, expanding medical education, strengthening cancer care at district hospitals, and ensuring social security for gig workers demonstrate a balanced approach to inclusive development. This Budget paves the way for a more skilled, resilient, and self-reliant India." The govt. is prioritizing inclusive growth, with targeted measures that uplift underprivileged communities, empower women, and support our farmers. It is also a big win for the individual taxpayers as they provide strength to the economy and to recognise their contribution, the government has provided relaxation to the middle class by exempting tax on income up to Rs. 12 lakh. There has been commendable focus on Skilling and Education in the Union Budget 2025. From nourishing children & mothers with Saksham Anganwadi & Poshan 2.0, to fostering innovation with 50k Atal Tinkering Labs, boosting digital learning with BharatNet & language resources, and strengthening skill development & IITs this has been a truly transformative budget for our future. National Centres of Excellence for Skilling The government will set-up five National Centres of Excellence for Skilling with global expertise and partnerships to equip youth with skills required for "Make for India, Make for the World" initiative, focusing on curriculum design, trainer training, and a robust skills certification framework. National Framework for Global Capability Centres (GCC) A national framework will guide states in promoting Global Capability Centres in tier 2 cities, enhancing talent availability and infrastructure while facilitating industry collaboration. Fund of Funds for Startups With a corpus of Rs 10,000 crore, our Fund of Funds for Startups will nurture over 1.5 lakh recognized startups, providing crucial capital across various stages and reducing reliance on foreign funding. Centre of Excellence in AI for Education The govt. are also establishing a Centre of Excellence in AI for Education with an investment of Rs. 500 crores to revolutionize learning accessibility. Employment-led Growth Initiatives To drive employment-led growth, we will implement intensive skill development programs and provide Mudra loans for home stays, enhance travel connectivity, and offer performance-linked incentives to states. Skilling emerges as a cornerstone across all these initiatives, reinforcing the government's commitment to fostering an environment where every individual has the opportunity to develop their skills, contribute meaningfully to the economy, and uplift their communities. The initiatives outlined include the scheme to establish India as a global hub for toys and support for 5 lakh first-time women, SC, and ST entrepreneurs, focusing on online capacity building and entrepreneurship training. Additionally, the 'Rural Prosperity and Resilience' program aims to combat underemployment in agriculture by providing targeted skilling and investment, empowering rural communities to thrive locally. So, this budget is not merely about fiscal allocations; it lays a foundation for inclusive growth and sustainable development. As India strives towards becoming a 'Viksit Bharat', it is vital to foster an environment where every Indian can realize their potential and contribute to India's progress and the possibilities that lie ahead.

Voices of Anticipation: Pre-Budget 2025 Perspectives

A collection of insightful quotes and opinions from industry leaders, policymakers, and stakeholders reflecting their expectations, hopes, and concerns ahead of the Union Budget 2025. Explore diverse perspectives on economic priorities, reforms, and growth strategies shaping India's future. Industry Wishlist: Exploring Sectoral Expectations for Union Budget 2025-26 Priyavrata Mafatlal, Co-Founder & Director of Get Set Learn (an Arvind Mafatlal Group company) "At Get Set Learn, we're laying a rock-solid foundation for 'New Collar' jobs by equipping learners with technical, entrepreneurial, and life skills essential for success in the modern world. Today's students are far more aware of the challenges ahead, and it's imperative for governments to build K-12 education schemes & financial structures to meet their evolving needs. The rise of skill-focused learning is reshaping how we define career readiness, and our mission is to ensure no talent is left behind. By fostering a culture of adaptability and continuous learning, we need to prepare this generation to thrive in a dynamic, digital-first economy. It's time for education to move beyond the confines of degrees and focus on real-world skills that empower the workforce of tomorrow". Rahul Attuluri, Co-founder and CEO of NxtWave"The government has consistently fostered a supportive environment for EdTech startups to empower our youth, with initiatives like the National Skill Development Corporation leading the way. We hope the upcoming budget includes provisions for infrastructure support to establish new-age institutions dedicated to skill development, preparing India's youth to meet industry demands effectively."Mr. Sumeet Mathur, Senior Vice President & Managing Director, ServiceNow India Technology & Business Center."As India advances further in its digital transformation journey, the upcoming Union Budget should prioritize bridging the tech skills gap and driving workforce readiness. With India's workforce projected to expand by 33.89 million and AI transformation anticipated to generate 2.73 million new tech jobs by 2028, the nation is well-positioned to lead in emerging technologies like AI and digital skills. To fully harness AI's potential, the government must place a strong emphasis on skilling for AI, establishing robust training frameworks that empower the workforce with future-ready capabilities. Additionally, policies that support the industry in attracting investments, promoting innovation, and building world-class digital infrastructure will be crucial. Strengthening public-private partnerships can further accelerate these efforts, bridging the digital divide and fostering a thriving tech ecosystem. Building on the solid foundation of the government's 'Digital India' vision, we hope the budget will amplify efforts to enhance workforce capabilities, attract global investments, and solidify India's leadership in the global technology landscape." Chinmay Hegde, Co-founder, CEO, and Managing Director of Astikos.ai With India urbanizing rapidly and cities becoming home to millions, the urban infrastructure must also become more sustainable. To ensure this, the Union Government should continue to focus on sustainable infrastructure and green initiatives in the coming days. Budget allocation for Smart Cities Mission should increase to ensure its objectives are achieved. Increased investments are needed for AI-driven infrastructure management and AI-powered smart Infrastructure in urban planning and promoting efficient and sustainable urban mobility. The budget should prioritize investing in technologies (AI, IoT, and automation) that drive improvement in operations, conserve energy, and manage waste, while reducing carbon footprints, contributing to our country's sustainability goals. With India emerging as one of the AI and analytics powerhouses, the government should launch comprehensive skill development programs under public-private partnerships (PPP) to train youth and workers in the usage of AI and machine learning. These initiatives will further strengthen the country's productivity and innovation. The government should also support organizations in establishing advanced state-of-the-art data centers and increasing R&D funding for AI and associated technologies. The ministry must implement governance measures to reduce bureaucratic hurdles within taxation departments, ensuring smoother execution of government schemes for startups and MSMEs. For example, while the government introduced the Income Tax Rebate eligibility scheme under the 'Startup India' program to benefit startups, excessive red tape within the Income Tax department often forces many eligible startups to forgo claiming these benefits despite holding "Eligible Startup for Income Tax Benefits" status. This weakens the scheme's objective and deters startups from leveraging available support. Satyendra Prasad Narala, Managing Director, Regency Ceramics Ltd "The Budget 2025 should focus on addressing critical challenges faced by the MSME sector, particularly the issue of delayed payments from customers. It is essential to enforce strict payment timelines of 45 days. Additionally, the budget should include provisions that support the financial stability of MSMEs, such as offering working capital at subsidized interest rates and eliminating the cooling period for banks to extend loans. There is also a pressing need to reform the Production-Linked Incentive (PLI) scheme by reducing import duties on raw materials, particularly for sectors like ceramics, where fuel costs form a significant part of production expenses. We urge the government to bring Natural Gas for industrial consumers under the GST tax regime. In the ceramics sector, sustainability is not just a goal but a necessity. As the industry progresses, we look to the government to implement strong policies that promote energy-efficient buildings and eco-friendly manufacturing practices. Stricter building codes and regulations that enforce sustainability standards will be instrumental in shifting the industry toward eco-conscious development. The real estate sector is keenly awaiting proactive measures in the Union Budget that will foster a greener, more sustainable future. The expansion of housing under the PM Awas Yojana and enhanced access to housing for the middle class is expected to boost demand for the ceramic industry and increase its production capacity. We also expect the Budget 2025 to rationalize inverted duty structures across various sectors, thereby enhancing India's manufacturing competitiveness and supporting domestic production."

Union Budget 2025: Progressive outlook highlights India's growth potential across sectors

The Union Budget 2025 was subject to several watershed announcements, as Minister of Finance, Nirmala Sitharaman, delivered a keynote speech at the Parliament on February 1. The core focus of the budget was directed at extending critical support to 4 core areas -- Agriculture, MSME, Investments and Exports, favourably impacting a holistic growth roadmap through meaningful announcements. The Union Budget prioritised making essential announcements and reforms in agriculture, Artificial Intelligence (AI), upskilling, manufacturing and sustainable development, providing a progressive perspective on the GOI's strategic blueprint for the upcoming financial year. Furthermore, the announcements and reforms also marked a watershed moment for India's comprehensive emphasis on sectoral growth, and corporates welcomed the approach with both hands. While the Union Budget 2025's comprehensive focus emphasised supporting the growth of Indian MSMEs, larger industry stakeholders from diverse sectors immensely benefited from key announcements. For instance, announcements on AI, upskilling, employment generation, manufacturing, logistics, agriculture and the National Manufacturing Mission provided a clear blueprint for the GOI's strategy to drive scalability and growth, positioning the country in a unique spot to sustain its growth potential for the upcoming fiscal year. AI & Upskilling The Government of India maintained its supportive perspective of the growth of AI within the national borders, while also aligning it with a feasible career option for the country's significant population of talents. The government's emphasis on driving AI development for drug discovery within India with more investments highlights the favourable outlook on the space in the country, and Mr. Arun Prakash M, Founder and CEO of GUVI Geek Networks believes that it will have a long-term favourable impact on the future of Indian talents. "The growing emphasis on AI has been addressed well in the Union Government by inviting investments in AI for drug discovery. As India looks to advance its capabilities in AI, upskilling in relevant tech education will be imperative. The government's decision to add broadband connections in government secondary schools to integrate digital learning, while also helping learners to understand the subjects better in their respective languages is commendable. Furthermore, the establishment of 5 national centres of excellence for upskilling to supplement Make for India and Make for the World will have long-term favourable implications on the future of millions of Indian talents, helping them to become critical contributors of the country's bid to become a developed nation by 2047," he said. Manufacturing & Construction As Finance Minister Nirmala Sitharaman announced the National Manufacturing Mission to provide policy support for diverse industries, it highlighted the Goverment of India's favourable outlook for domestic development and bid to position India as a global manufacturing hotspot. Speaking on the same, Mr. Rajesh Shah, Chairman & Managing Director of Euro Panel Products Limited, revealed that this would position India's manufacturing countries on a path to significant growth, saying, "The introduction of the National Manufacturing Mission will provide critical policy support to various industries, reinforcing India's commitment to becoming a global manufacturing leader. Also, the setup of an Urban Challenge fund worth INR 1 lakh crore to redevelop cities positions the building materials and construction industry in a favourable position. The emphasis of each infra ministry to come up with a 3-year list of PPP projects will be an era-appropriate move, furthering the National Manufacturing Mission and Make in India initiatives. These will enable industry stakeholders to scale operations, enhance efficiency, and drive innovation -- directly translating to India attracting greater investments, creating high-value jobs, strengthening supply chains and boosting exports." Agriculture One of the four pillars of the Union Budget 2025 was agriculture, and its progressive outlook did not disappoint. The Prime Minister Dhan Dhanya Krishi Yojana in partnership with states, along with the extensive support provided to farmers with credit lines provides a long-term impact on India's agriculture space, and Mr. Anshul Garg, Director & CEO of Aroma AAT Basmati Rice, agreed on the same. "The PM Dhan Dhanya Krishi Yojana in partnership with states will be a significant boost in Basmati production domestically. This is a meaningful and era-appropriate announcement to increase India's agri productivity and will benefit increasing Indian Basmati rice's increased penetration in global key markets. As productivity increases, the emphasis on helping up to 1.7 Crore Indian farmers with both short and long term credit lines will also help to advance the rural economy and the creation of employment opportunities in the space will help position India as the global food basket. The enhanced credit line extended to 7.7 Crore farmers for short term loans of INR 5 Lakh is also a significant announcement, helping them with financial viability during cultivation season," he said. Sustainable Mobility & Electric Vehicles India has already positioned itself as one of the highest EV-adopting countries in the world, and the announcement of the National Manufacturing Mission's support for clean tech manufacturing at the Union Budget is expected to be a game changer. The Union Budget 2025 prioritizes sustainable mobility in the country with the removal of Basic Customs Duty (BCD) on critical materials like cobalt powder, lithium-ion battery waste, and other essential minerals. This move has been further supported by an additional INR 10,000 crore investment in the Union Budget, highlighting innovation, job creation, and energy security. Speaking on the same, Mr. Siddharth Patel, Founder of Greenway Mobility, quipped, "India's push for sustainable mobility is getting a major boost with the removal of Basic Customs Duty (BCD) on critical materials like cobalt powder, lithium-ion battery waste, and other essential minerals. This bold move will lower manufacturing costs, ensure a steady supply of key resources, and accelerate the adoption of electric vehicles. More importantly, it paves the way for stronger domestic production, job creation, and advancements in battery technology, a key step toward a cleaner, more energy-independent future." "At the same time, the National Manufacturing Mission is set to transform India's green energy landscape. By backing local production of EV batteries and solar panels, the initiative will reduce import reliance and make sustainable solutions more accessible. The government's additional ₹10,000 crore investment signals a strong commitment to innovation and economic growth, strengthening India's position as a global leader in clean technology," he further added.

Budget 2025: India's education sector to have a digital and skilling transformation?

The Union Budget 2024-25 allocated ₹1.48 lakh crore for education, skilling, and employment, with significant increases to various schemes and initiatives focusing on digital learning, technical education, and teachers' capacity building. Enhanced allocations are expected for research and development, internationalization in education, and promoting foundational literacy and numeracy in line with the National Education Policy 2020.The National Education Policy 2020 sets the overarching framework for transforming our education system. While the policy provides overall guidelines, the Government is now focused on developing micro-level strategies and interventions for improving governance through "light-but-tight" regulations and, at the same time, improving employability of students. Union Budget 2024-25 allocated ₹1.48 lakh crore for education, skilling and employment. Schemes such as Samagra Shiksha Abhiyan, PM-POSHAN, PM-SHRI, STARS and NATS received significant increases. Significant allocations were also made to new initiatives such as PM Internship Scheme, Centre of Excellence in Artificial Intelligence and National Digital University, emphasizing on a focus on practical training and digital education. It is expected that Budget 2025-26 will further the initiatives taken for digital learning, skilling, technical education and capacity building of teachers. The budget is also expected to focus on new themes such as internationalization in education, research and development and teaching infrastructure. Aligned to the Government's vision of establishing India as a Global Education Hub, there may be increased allocation to Study in India Scholarship. The budget could also focus on increasing the involvement of international faculty at state universities through the GIAN scheme. Additionally, with the Government's focus on Indian Knowledge Systems (IKS), new allocations may be seen to support academic collaboration between institutions specializing in IKS such as Central Tribal University and Sanskrit Universities. After the increase in funding for World Class Institutions in Budget 2024-25, the Institutes of Eminance (IoE) programme may also receive increased allocation with the objective of creating more globally competitive institutions. With only 12 institutions granted an IoE status against an initial target of 20, there is significant potential for increased budgetary allocations in this area. With the growing focus on online learning, significant allocations may be expected towards some of the key enablers such as digital infrastructure in institutions, incentives for development of online educational learning resources and innovative technologies in the EdTech space. Expansion of the National Knowledge Network (NKN) is critical to address digital infrastructure related issues in remote areas and to ensure institutions are prepared for digital education. Incentivizing the creation of online educational resources in vernacular languages will make learning more accessible to diverse groups. Allocations are also expected towards strengthening of the Distance Education Bureau, which will help maintain standards and improve programme quality. The Government has prioritized research and development, especially in emerging technologies such as AI/ML and wafer manufacturing. Budget 2024-25 had significant allocations towards setting up of the Centre of Excellence in Artificial Intelligence. Increased allocations for Centre of Excellences in these sectors are expected this year too. To foster research collaboration between top central and state government institutions, schemes similar to SPARC5, which foster academic collaboration among top-ranked foreign and Indian Higher Education Institutions (HEIs), may be introduced. With the establishment of the Anusandhan National Research Foundation (ANRF), the university-led research model may be reintroduced, focusing on funding for multidisciplinary research. Furthermore, financial incentives for PhD scholars and researchers may be expanded through increased allocations to the PM's Research Fellowship Scheme and an enhancement in the number of Junior Research Fellowships for UGC-NET/CSIR-NET qualified students. With a focus on promoting higher education in regional languages and the launch of Anuvadini AI by the All India Council for Technical Education (AICTE), enhanced allocation may be seen towards developing a specialized team to design curriculum in local languages and translate existing course work into regional languages. Six states have launched an MBBS program in Hindi, and similar trends might be seen in other courses as well. Higher education infrastructure at the grass-roots level has received a significant boost through initiatives like PM-USHA and RUSA. These allocations have been critical in increasing the female gross enrolment ratio (GER) across states. But there is still significant disparity between southern and eastern states in terms of college density (colleges available per lakh of eligible population). Enhanced allocations under PM-USHA may help address this regional disparity. Additionally, to attract international students to India, schemes encouraging public private partnership in building world-class hostels may also be introduced. With a focus on improving foundational literacy and numeracy, enhanced allocation may be seen in the National Initiative for School Heads' and Teachers' Holistic Advancement (NISHTHA) programme, to positively impact learning outcomes and promote NEP implementation at the school level. With doubling of the allocations under MERITE and MMTTP last year, teacher training is expected to receive significant allocation this year as well. The Nurturing Future Leaders Programme may receive significant allocations considering the focus on strengthening administrators in state public universities. In the absence of a standardized system for training teachers at the central and state government levels, allocations are also expected towards the creation of a Centralized Teachers Training Framework and Monitoring System in line with the Vidya Samiksha Kendras (VSK). With recent studies highlighting the low number of female teachers in higher education STEM subjects, schemes providing financial incentives for engagement of female teachers may be introduced. In vocational education, the PM Internship Scheme has garnered significant interest among students, with 6,21,000 applications received for 1,25,0006 internship opportunities in the pilot phase. It may receive increased allocations to achieve the target of training 1 crore youth by 2028-29. Further, to improve the adoption of Apprenticeship Embedded Degree Programmes, enhanced allocations may be seen in the NATS. The introduction of targeted schemes and increased budgetary allocations in crucial areas such as Early Childhood Care and Education (ECCE), teacher training and the development of skill-based courses for K-12 students will be critical to improve students' preparedness for the future. The article has been written by Suchindra Kumar, Partner and Leader Education PwC India.