Union Budget FY26: What India’s youth want is their right to education (and jobs)

The PM Internship Scheme of 2024 promised 1.27 lakh youth would get attractive stipends last year and received over 6.21 lakh applications in October last year — but by November 2024, only Rs 6 crore of the Rs 2,000 crore allocated had been disbursed.

The Scheme is currently no longer receiving applications, but employers are still free to register — although the top 500 had apparently already been enlisted. Newspapers speak of 81 per cent of Indian companies being interested in recruiting through it, so it looked like all vacancies should have been filled right away, right? But only 10,000 have been employed...

This year again, students and young graduates are looking forward to the upcoming Union Budget with equal measures of hope and trepidation.

Past allocations by the Modi government for education, research and job creation seem to have failed to improve the lives of our youth, job-seekers and students. Our youth are still grappling with mounting student loan debt, a bleak employment landscape and dwindling confidence in our public institutions.

What we look forward to and indeed need are substantially higher investment, more equitable policies and serious measures to reduce the glaring inequities in India’s education and employment sectors.

A flawed foundation: Lessons from last year’s budget

Last year’s budget projected an 8 per cent increase in the education outlay, from Rs 1.16 lakh crore to Rs 1.25 lakh crore.

However, this increase in real terms was eroded by inflation, leaving universities, colleges and research institutes with notional gains.

According to data from the government’s own Economic Survey 2023–24, education spending stood at a meagre 2.7 per cent of the GDP, a lot lower than the 6 per cent recommended by the National Education Policy (NEP) in 2020.

India’s gross expenditure on research and development (GERD) is also low, at around 0.7 per cent of the GDP, lagging behind other BRICS countries and far below the global average of 1.8 per cent.

This chronic underinvestment translates to dilapidated labs, minimal fellowships and a lack of cutting-edge research facilities. No Indian university appears in the top 100 of any global ranking, underscoring the long-term consequences of budgetary neglect.

Without a significant boost in research funding, the brain drain will persist, and our nation will continue to lose its brightest minds to countries that offer better infrastructure, pay and opportunities for innovation.

The rhetorical emphasis in last year’s budget speech on cutting-edge areas— such as AI, robotics or digital skilling — may have sounded visionary, but the ground reality has been grim. In many state-run universities, even core science laboratories lack basic equipment.

Promises were made, but the actual release of funds remained sluggish, forcing institutions to operate on shoestring budgets.

Meanwhile, students continue to bear the brunt of underfunded programmes. Scholarships for marginalised communities, for example, have scarcely kept pace with tuition hikes, thereby exacerbating inequity within higher education.

Unemployment: The biggest elephant in the room

Last year’s budget made grand claims of generating jobs, but official and private estimates continue to paint a bleak picture.

The CMIE data highlights a 9.2 per cent unemployment rate, with youth being disproportionately affected. The frenzy of competitive exams — where millions apply for just a few thousand vacancies — demonstrates how dire the situation is.

While the last budget made the customary and token mention of ‘employment opportunities’, these were largely aspirational. There have been no targeted programmes to address the acute joblessness among fresh graduates, nor any real incentives to bridge the gap between academic curricula and industry demands.

The government had presented the alluring idea of a PM Internship Scheme in top companies at an attractive stipend.

However, one year on, we are yet to see significant results from the scheme.

Business Today reported that a total of 1.27 lakh internship opportunities were posted by companies for the scheme. Against these, approximately 6.21 lakh applications were apparently received — and the scheme’s launch postponed.

How many of the applicants actually secured an internship remains a mystery still.

What is in the public domain, though, is that Rs 2000 crore was allocated for this, but until November 2024, only Rs 6 crore was spent.

Further, postgraduates have been excluded from the scheme and an arbitrary age limit of 24 has been set for applicants.

Mounting education costs

The cost of higher education in India has increased manifold with the government ceding the space to ‘private education’, run clearly for profit.

Private universities often impose an exorbitant Rs 8–10 lakh fee per year for undergraduate professional programmes. And government-funded institutions are severely limited — approximately 17,700 BTech seats in all the IITs pan-India, for over 2 lakh aspirants, just by way of an example.

As a result, families are compelled to dip into their savings, sell property or take out large education loans, which have ballooned from Rs 65,336 crore in 2020 to Rs 1,29,116 crore in 2024.

The government’s push for fresh education loans, without providing relief to those already in default and with poor prospects of employment post-education, is a cruel oversight.

There is pressing need for structured loan relief measures — including the possibility of a one-time write-off for students who have tried in vain to secure viable employment after graduation.

Ignoring this issue will only deepen the financial distress and discourage students from pursuing higher education.

Wishlist for the upcoming Budget 2025–26

What do the nation’s youth need from the government that expects them to be our bright and shining future?

1. Substantial increase in education spending

The government must fulfill the NEP 2020 target of allocating at least 6 per cent of the GDP to education. This would provide meaningful support to public institutions, enabling them to upgrade infrastructure, hire faculty and reduce dependence on high tuition fees.

2. Equitable distribution and direct benefit transfers

More resources should be directed to colleges and universities serving marginalised communities. A direct benefit transfer (DBT) system for scholarships and stipends can help ensure transparency and efficiency, preventing funds from getting lost in bureaucratic labyrinths.

3. Robust R&D funding

We demand a clear roadmap to double India’s GERD to at least 1.4 per cent of the GDP in the next five years. This should include generous research grants, funding for modern laboratories and meaningful fellowships to nurture innovation. Collaboration between academia and industry must be incentivised to translate research into commercial and social impact.

4. Targeted measures on youth unemployment

The upcoming budget should prioritise vocational training, apprenticeships and skill-development programmes that align with market needs. Encouraging start-ups through simplified regulations and funding avenues would also create new jobs, especially in the technology and services sectors.

5. Student loan relief and sustainable financing

A one-time write-off or structured relief plan for defaulted education loans can alleviate the crushing debt burden many graduates face. The government must also consider tying loan repayment schedules to income levels, so that recent graduates aren’t trapped in an endless cycle of debt.

6. Holistic support for quality and inclusion

The government must stabilise or reduce public university fees and expand scholarships to the historically marginalised. We also seek a stronger impetus for bridging the digital divide through affordable internet and technology resources in rural and semi-urban areas.

If India aspires to be a global knowledge powerhouse, the government must match its rhetoric with concrete budgetary commitments. There is no better time than now to course-correct.

By meaningfully investing in education, creating tangible pathways for youth employment and providing relief to distressed borrowers, the upcoming budget can restore confidence among the youth.

Views are personal.

Varun Choudhary is the national president of the National Students’ Union of India (NSUI) and Amaan Asim is the chairperson of the NSUI’s national research department