The NEP has an ambitious target of reaching public investment in education to reach 6% of the GDP. Education sub-sectors such as school education, technical education and skilling have their distinct and rising resource needs, and these competing demands often crowd out allocations for higher education in the Union Budget. In this context, the Union Budget needs to consider not only “how much” is spent but “how smartly”.

India aspires to become a knowledge economy, and our higher education institutions have a critical role to play in building the talent pool which is productive and globally competitive. The reforms envisaged in New Education Policy (NEP 2020) for higher education are moving from policy intent to visible system level changes. One of the key initiatives, the Viksit Bharat Shiksha Adhikshan Bill aiming to replace the UGC, AICTE, and NCTE with a single regulatory body was introduced in Lok Sabha in the last parliamentary session. The bill has been referred to a Joint Parliamentary Committee for detailed examination.

As citizens and concerned parents of young children, one of our primary aspirations is to secure admission for our children in the finest institutes, irrespective of the field they choose. The underlying assumption is that enrolling in the best institutions will open pathways to employment with leading organisations in the industry. However, the current landscape of higher education in India reveals significant regional disparities in the distribution of quality institutes.

The distribution of top institutions across the country is skewed, with the eastern and north-eastern regions represented by only four universities each among the top 100 in the National Institutional Ranking Framework (NIRF). In contrast, both the northern and southern regions have a greater number of universities in the top 100. This pattern persists even when the list is expanded to the top 200 institutions. It is estimated that every year nearly more than 1 crore new students join the pursuit of higher education, hence the need to equalise access to quality education becomes increasingly urgent.

To address this imbalance, there is a clear need for increased allocation of resources aimed at enhancing both the quality of education and the infrastructure in regions where higher education institutions are fewer and have not yet reached the standards achieved by other parts of the country. Historically, grants and support for central universities, IITs, IIMs, and IIITs have been higher than the funding for broad-based higher education programmes such as the Pradhan Mantri Uchchatar Shiksha Abhiyan (PM-USHA). It would be a welcome step if the central government acknowledges this regional disparity and increases the allocation for PM-USHA beyond current levels. Furthermore, the government could introduce policy measures to drive quality improvements in universities in these underrepresented regions. Leveraging digital learning and shared knowledge resources across universities and colleges can also help to bridge gaps in quality and faculty availability. With the current allocation at about ₹650 crore for the financial year, a substantial increase would be needed to make a noticeable impact.

Affordability remains a significant obstacle for many aspiring students, particularly those from lower and middle-income families. While most education loans focus on tuition fees, additional costs such as living expenses, devices, deposits, travel, and accommodation can cumulatively pose a major financial barrier, preventing deserving students from pursuing their preferred courses. The Government’s PM Vidyalaxmi Scheme, introduced in 2024-25, provides collateral-free and guarantor-free loans to eligible students, with a credit guarantee coverage limit of ₹7.5 lakh. However, many professional courses have fees and related expenses that exceed this amount. It would be prudent for the Central Government to review and potentially increase this limit to ensure broader access to higher education for all deserving students.

While efforts are made to uplift the general standard of higher education institutions, it is equally important not to fall behind in nurturing and advancing our flagship institutes. Allocation to the central sector scheme for world-class institutions should be increased. Notably, the budget for this initiative was reduced from ₹1800 crore in FY 2025 to ₹475 crore in the last year; restoring it to previous levels would support the goal of increasing the number of Indian higher education institutions featured in global rankings such as the QS World University Rankings. In the 2026 QS World University Rankings, India performed admirably, with 54 universities listed, making it the fourth most represented country worldwide. This achievement highlights the growing global recognition of India’s academic strengths and underscores the need for continued support.

The creation of world-class institutions is closely tied to robust research and productive industry collaborations. Significant allocations for research are channelled through the Research, Development and Innovation (RDI) scheme under the Department of Science and Technology. Higher education institutions play a pivotal role in these efforts, and their active participation should be ensured so they can fully benefit from such initiatives. The overall allocation of ₹327 crore for research and innovation under the higher education department should also be increased, enabling more institutions and researchers to benefit from programmes such as Impacting Research Innovation and Technology (IMPRINT), Scheme for Promotion of Academic and Research Collaboration (SPARC), Scheme for Transformational and Advanced Research in Sciences (STARS), and the Multidisciplinary Education and Research Improvement in Technical Education-EAP (MERITE).

India’s higher education sector faces key challenges. Addressing regional gaps, ensuring affordability, supporting top institutions, and promoting research can lead to an equitable and globally recognised system that benefits the nation’s youth.

The story is written by Ashok Verma, Partner, Grant Thornton Bharat