From spending to learning: What Budget 2026–27 must signal

India’s education budgets over the last few years tell a reassuring story on paper. Allocations have increased, flagship programmes have expanded and digital infrastructure has gained scale. Yet a more uncomfortable question continues to linger beneath the numbers: are children actually learning better in classrooms?

Between 2023–24 and 2025–26, the Ministry of Education’s allocation rose steadily. Samagra Shiksha, the backbone of school education financing, increased to Rs 41,250 crore. PM POSHAN and PM SHRI have retained strong fiscal backing, while new investments in connectivity, innovation labs and emerging technologies have been announced. These are not small commitments.

But education reform has repeatedly shown that large allocations do not automatically translate into stronger learning outcomes. The hardest work is not announcing schemes or building platforms. It is building delivery capacity, teacher by teacher and school by school, over time.

The drift from learning we can no longer afford
Recent Budgets reveal a clear tilt toward visible inputs: devices, connectivity, digital platforms and innovation infrastructure. BharatNet connectivity to schools, the expansion of Atal Tinkering Labs (ATLs) and proposals for AI Centres of Excellence reflect ambition and future-readiness.

These investments matter. But India has encountered this risk before: when policy prioritises what is visible over what is instructional, classrooms are left under-supported. Teachers remain overstretched. Instructional time is fragile. Remedial support is uneven. Learning outcomes continue to vary sharply by district, school, and socio-economic background.

Why Budget 2026–27 is a turning point
Budget 2026–27 arrives at a critical inflection point. First, the current cycle of Samagra Shiksha ends on 31 March 2026. Without a clear post-2026 financing framework, states risk uncertainty precisely when stability is essential. School systems cannot function on annual improvisation.
Second, India’s commitment to foundational literacy and numeracy is no longer aspirational. Timelines are explicit. This demands a shift from decorative reform to operational discipline. Learning improvement must become the organising principle of school financing, not just one objective among many.

Move beyond allocation to outcome-linked financing
The next Budget must link funding more directly to learning outcomes and system performance. Outcome-linked grants for states, tied to foundational literacy and numeracy, middle-school transition, and secondary retention, can shift incentives decisively. Performance-based financing can encourage investments in teacher support, assessment reform, and remediation rather than fragmented, compliance-driven spending.

Fix the learning drop after Grade 3 and in middle school
The next phase of reform must confront a reality the system often avoids: learning declines sharply after Grade 3 and again during the middle stage. Budget 2026–27 should prioritise:

Expansion of structured FLN support beyond early grades into Grades 4–6;

Targeted academic support for middle schools, particularly in mathematics, science, and language;

Dedicated funding for diagnostic and formative assessments that guide instruction, not just record performance.

Without sustained academic support beyond early grades, foundational gains cannot be protected.

Make assessment reform a core investment
Assessment must be treated as a learning tool, not merely an evaluation exercise. Budget 2026–27 should fund competency-based, classroom-aligned assessment systems that provide timely feedback to teachers and students. Support for adaptive and gamified assessments can improve engagement while generating actionable insights for teachers and administrators. Assessment reform is not an add-on. It is central to improving classroom practice.

Put NPST at the centre of teacher development and career progression
Teachers remain the strongest lever for learning improvement, but teacher development in India is still too often organised around events. Budget 2026–27 should explicitly operationalise the National Professional Standards for Teachers (NPST) as the backbone of capacity building and career progression.

This requires:
- NPST-aligned Continuous Professional Development (CPD) with competency-linked progression pathways;
- Digital training and performance management systems to track quality, practice change, and classroom impact;
- Mentoring-based academic support through structured classroom observation, feedback, and coaching;
- Stronger academic leadership at the school, cluster and block levels.

NPST should not remain a framework on paper. The Budget must make it an operating system for teacher growth. Invest more decisively in quality, innovation, and school-level R&D. If innovation is to be meaningful in school education, Budget 2026–27 must increase allocations specifically for quality and pedagogical innovation, not just infrastructure. Innovation in schools requires sustained funding for experimentation, teacher-led innovation, curriculum-linked projects and integration of real-world problem solving into classrooms.

In this context, Atal Tinkering Labs need a structural reset.
•    Tools, equipment, and consumables procured for ATLs should be exempted from GST, reducing recurring costs and enabling more frequent student use.
•    ATLs require dedicated operational and refresh funds, not just one-time setup grants, to remain functional and relevant.
•    Select ATLs, especially at the district or regional level, should be supported to evolve into Startup Centres of Excellence and incubation hubs, linked to higher education institutions, industry mentors, and local entrepreneurship ecosystems.

Without this, ATLs risk becoming static labs rather than dynamic spaces for innovation, problem-solving and early entrepreneurship.

Build digital public infrastructure that works for classrooms
India has made real progress in digital education platforms. The next step is integration and usability. Budget priorities should include:
•  Interoperable systems for learning, assessment, teacher development, and governance;
•  Support for state-level command and analytics centres to enable real-time decision-making;
• Targeted funding for device access and connectivity in underserved regions.

Digital investments should emphasise classroom relevance and proof-of-use, not just platform expansion.

Be disciplined, not dazzled, about AI

AI has genuine potential in education, especially for teacher support, multilingual scaffolding, and practice-based learning. But the Budget must define public-value use cases, set evaluation standards, and enforce data safeguards. Prestige spending without classroom impact will widen the policy-practice gap.

Prepare adolescents for life beyond school
With labour markets changing rapidly, early and equitable access to career guidance is essential. Budget 2026–27 should expand structured career guidance and life-skills programmes from upper primary through secondary levels, especially in government schools. Integrating career exposure, counselling, and skill awareness can reduce dropouts and improve post-school transitions.

Put equity back at the centre
Finally, the Budget must continue addressing regional, gender and socio-economic disparities. Special focus is needed for aspirational districts, remote geographies, first-generation learners, migrant populations and students at risk of disengagement during transition stages. Targeted academic and socio-emotional support remains essential.

The real test: classrooms, not balance sheets
Budgets can build infrastructure quickly. They cannot build learning quickly unless they invest in the slow work of strengthening instructional time, teacher support, school-level capacity and credible measurement.

Conclusion: the standard ‘Budget 2026–27’ must meet
Budget 2026–27 should not be judged by how much more it spends on school education, but by what it decisively chooses to stop doing and what it commits to doing differently. The Indian education system is no longer short of programmes or platforms. It is short of alignment between money, institutions and learning outcomes.

The coming Budget must therefore set a clear governing principle: public financing for school education exists to change classroom practice, not merely to expand access, infrastructure, or visibility. This requires the Ministry of Education and the Ministry of Finance to treat learning improvement as a fiscal objective, not just a sectoral aspiration.

Three choices will reveal whether that shift has genuinely occurred. First, whether the Budget anchors the post-2026 phase of Samagra Shiksha around outcomes, not entitlements alone. Stable funding without learning accountability will preserve the status quo. Outcome-linked financing tied to foundational learning, middle-school progression and retention will force both the Centre and states to prioritise what happens between the blackboard and the learner.

Second, whether the Budget institutionalises teacher professionalism rather than continuing with episodic capacity building. If the National Professional Standards for Teachers remain outside the core fiscal architecture, reform will stall. NPST must determine how training funds are allocated, how mentoring is resourced, how academic leadership is developed, and how teachers progress over their careers. Anything less will keep teacher development peripheral to learning reform.

Third, whether innovation spending is governed by utility rather than novelty. Digital systems, AI initiatives, and Atal Tinkering Labs must be financed with explicit expectations of use, upkeep, and learning impact. Exempting educational tools from avoidable taxation, providing operational funding for labs, and enabling select ATLs to mature into incubation and startup centres would signal that innovation is meant to endure, not merely to be inaugurated.

This is no longer a question of policy intent. The frameworks are in place. The diagnostics are clear. What remains is fiscal courage: the willingness to concentrate resources, enforce accountability and privilege learning over optics.