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Skilling and being industry ready are need of the hour in higher education

By ISPP
Published Feb 13, 2026

The Union Budget 2026-07 for the education sector at Rs1.39 lakh crore is an increase of 8.27% over BE 2025-26 and is aimed at empowering youth with focus on education, employment and future-ready skills for realising the goal of Viksit Bharat. The focus on the Department of School Education and Literacy through imparting practical knowledge is also reflected in the allocation for Atal Tinkering Labs at Rs 3,200 crore¹. These labs are designed to foster STEM skills, creativity, and entrepreneurship at school levels.

Linking universities to economic zones

More interestingly, the Budget emphasises on areas that influence workforce readiness, industry integration, research capability and future-oriented skills. It proposes setting up of five University Townships in the vicinity of major industrial and logistics corridors for developing planned academic zones hosting multiple universities, colleges, research institutions, skill centres, and residential complexes. This may align well with foreign universities establishing/proposing campuses in India. These townships can help improve graduate employability, facilitate applied research and support regional economic development. They can also open business opportunities in public-private partnership for university townships.

Strengthening institutional capacity

Increased allocation to the University Grants Commission and centrally funded institutions such as IITs, NITs (National Institute of Technology) and central universities are expected to enhance infrastructure. Besides, faculty support, and research facilities will help improve institutional capacity. PM-One Nation One Subscription (PM-ONOS) at an allocation of Rs. 2200.00 Cr will help provide a shared access platform to international, high-impact scholarly journals and research articles for students, faculty, and researchers. Launched in 2025, it aims to enhance research quality and bridge knowledge gaps through centralized access to journals from major publishers.

Future skills

The Budget emphasises on intensification of artificial intelligence in education, including the establishment of Centres of Excellence focused on AI-enabled learning and curriculum development. However, their impact will depend on their integration into mainstream institutional practice. The same is true for establishment of content creation labs within educational institutions for skills related to visual effects, animation, gaming and comics.

Equity concerns

The Budget addresses expansion of girls’ hostels across districts, and initiatives aimed at increasing female participation in higher education. A good step to start this is to conduct surveys across India for gender disparity, besides gross enrolment of girls as also drop-out rates in different states. The results of the surveys will help implement this initiative well.

Opportunities calling

Linking education more directly with jobs, entrepreneurship, and services-led growth is what is, however, required. The push to embed AI across learning, expand higher-education capacity around industrial corridors, and industry-designed modular programmes are expected to strengthen the education sector. However, sustained effort budget-after-budget as also off-budget initiatives are must-do for the government.

The Budget, by placing skill development and industry-linked education at the core, also provides the edtech sector with the business opportunity to move beyond content and play a role in shaping learning design, implementation and outcomes. Here, AI, industry partnerships, and research institutions will provide the necessary boost. With the Indian economy moving fast the skilling sector should move faster to become outcome driven.

The Economic Survey 2025-26 highlights building state capacity in higher education, fostering academia-industry collaboration, and expanding global engagements. It is interesting to note that the Budget 2026-27 is in line with the Survey.

However, recent data reflects a significant gap between industry requirements and the industry-ready institutes in India. A January 2026 TeamLease Edtech report reflects that 75% of HEIs (Higher Education Institutions) lack industry-readiness². According to the report only over 16.7% of HEIs achieve 76-100% placements within six months of graduation. The data show that only 8.6% of institutions report full industry alignment across their programmes, while over half show no alignment whatsoever.

The report also mentions that only 7.56% of institutions have integrated “Professors of Practice” across multiple programmes³, a must for making the education industry ready. Despite the fact that UGC has stressed upon introduction of the ‘Professor of Practice’ (PoP) category at HEIs, which allows industry professionals to bring real world practices and experiences into the classroom⁴, there is an immense shortage at ground level.

FAQs

What is the key focus of the Union Budget 2026–27 for higher education?

The Union Budget 2026–27 focuses on skilling, industry readiness, and future-oriented education by strengthening institutional capacity, promoting AI integration, expanding higher education infrastructure, and aligning education more closely with employment and economic growth.

How does the Budget address the skills gap in India’s higher education system?

The Budget emphasises industry-linked education, AI-enabled learning, modular programmes, and closer academia–industry collaboration to reduce the gap between graduate skills and industry requirements highlighted by recent employability data.

What role does Artificial Intelligence play in Budget 2026–27’s education strategy?

The Budget promotes AI through Centres of Excellence for AI-enabled learning, curriculum development, and content creation labs, with the objective of preparing students for future technologies and digital industries.

How does the Budget strengthen institutional capacity in higher education?

Increased funding for UGC, IITs, NITs, and central universities aims to improve infrastructure, faculty support, and research facilities, while initiatives like PM-One Nation One Subscription enhance access to global research resources.

What is PM-One Nation One Subscription (PM-ONOS)?

PM-ONOS is a shared access platform that provides students and researchers with centralized access to international scholarly journals and research publications, aimed at improving research quality and reducing knowledge gaps.

What challenges remain despite increased budgetary support?

Despite policy emphasis, significant challenges persist, including lack of industry readiness in HEIs, limited placement outcomes, insufficient industry-aligned curricula, and shortages in implementation of initiatives like Professors of Practice.

Why is the ‘Professor of Practice’ model important for higher education reform?

The Professor of Practice model allows industry professionals to bring real-world experience into classrooms, improving practical learning and employability, though adoption across institutions remains limited.

How does Budget 2026–27 align with the Economic Survey 2025–26?

The Budget aligns with the Economic Survey’s recommendations by focusing on state capacity building, academia–industry collaboration, global engagement, and reforms to improve higher education outcomes.

What opportunities does the Budget create for the edtech sector?

The Budget opens opportunities for edtech firms to move beyond content delivery into learning design, AI-enabled education solutions, assessment, and outcome-driven skill development through partnerships with institutions and industry.

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