With the Union Budget 2025 getting closer, startups operating in the country’s education technology (edtech) sector are looking forward to fiscal policies that would shape the future of digital education in India. From reduced tax rates, to initiatives promoting upskilling and development of digital infrastructure - industry stakeholders are expecting the Centre to introduce policies designed to foster growth in recovering the sector.
The industry is hoping for potential tax incentives and benefits from the budget, primarily in the form of Goods and Service Tax (GST) exemptions for under-privileged students, and reduction in GST for educational products and services.
"Students that hail from Below Poverty Line (BPL) and Low Income Group (LIG) families should receive 100 percent GST exemption from all educational expenses, be it test-prep courses or job-oriented skill courses; as it takes away a significant portion of their net disposable income,” said Prateek Maheshwari, co-founder of PhysicsWallah (PW) and chair of India Edtech Consortium (IEC).
Maheshwari emphasised that the 18 percent tax slab on higher or online education, including skilling, is extremely high. “In other countries like Switzerland, education services are free irrespective of mode or type of education service while even in a country like China, it stands at 6 percent,” he said.
Edtech players are batting for rationalisation in interest rates of student loans, and interest-free loans for economically disadvantaged students, which they say is an important step to creating affordable degrees.
Upskilling and reskilling
Another key area of interest for edtech firms is workforce upskilling and reskilling, as artificial intelligence (AI)-powered innovations have made Indian corporations keen on ensuring their workforces remain competitive.
“The upcoming Union Budget FY26 should encourage incentivising or providing effective tax breaks, similar to those under Section 80C (like mutual funds or life insurance), to Indian organisations investing in AI training. It will encourage adoption and cultivate a lifelong learning mindset,” said Mayank Kumar, co-founder of edtech unicorn upGrad.
Kumar also called for initiatives to upskill not only India Inc, but also government employees in emerging technologies via public-private partnerships and setting up of Centres of Excellence. He further emphasized the need for industry partnerships to promote MSME upskilling of micro, small and medium enterprises (MSMEs), who contribute nearly 30 percent of the country’s GDP, especially in the realm of AI.
“In the age of the AI-powered ecosystem, collaboration between skilling providers and the government is essential to equip MSMEs with AI training and certifications. Upskilling this sector must be a key priority in the upcoming Budget to support India’s 'Viksit Bharat' vision while enabling the nation to become the AI-first economy,” he said.
Similarly, other industry stakeholders called for initiatives in the budget that work towards making skilling a vital component of higher education.
“We urge the government to strengthen the Model Skilling Loan Scheme, ensuring it includes targeted funding for industry-aligned, short-term certifications that enhance employability in dynamic sectors like marketing, technology, and digital innovation,” said Varun Satia, founder and CEO of Kraftshala, an edtech startup that offers courses to students and professionals.
Focus on digital infrastructure
Edtech players are also looking for a significant boost in budgetary allocation for education and skill development, ideally reaching six percent of India’s GDP, to align with the ambitions of the national education policy (NEP) 2020. To this end, industry stakeholders are also expecting increased allocations for development and enhancement of digital infrastructure.
“Many educational institutions continue to face challenges due to outdated infrastructure and limited technological resources, such as insufficient computer labs and unreliable internet access. Addressing these gaps, along with equipping both students and faculty with the right tools and training, is vital to preparing future generations for a tech-driven job market,” said Praveen Singh, CEO of MBD Group’s Aasoka.
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