Five University Townships to Be Developed Near Major Industrial Corridors
The Union Budget has announced several major initiatives for the education sector. Key proposals include the establishment of five university townships near major industrial and logistics corridors, construction of girls’ hostels in every district, setting up content creator labs in 15,000 schools and 500 colleges, and reducing the Tax Collected at Source (TCS) rate for education-related remittances to two percent.
An allocation of more than ₹1.39 lakh crore has been made for the education sector, including ₹55,727 crore specifically for higher education.
Support for University Townships
While presenting the Union Budget 2026–27 in the Lok Sabha, Finance Minister Nirmala Sitharaman announced that the central government will support states in developing five university townships near major industrial and logistics corridors.
She stated in her budget speech, “These proposed education zones will include multiple universities, colleges, research institutions, skill development centers, and residential complexes.”
Girls’ Hostels in Every District
Sitharaman also announced the establishment of one girls’ hostel in every district across the country. India currently has more than 700 districts.
She explained that female students in higher education STEM institutions often face challenges due to long study hours and extensive laboratory work. To address this, the budget proposes the construction of girls’ hostels in every district through Viability Gap Funding (VGF) or capital assistance.
Support for Creative and Medical Education
The budget also proposes a credit-based capital subsidy scheme for veterinary colleges, hospitals, and diagnostic laboratories.
Additionally, support will be provided to the Mumbai-based Indian Institute of Creative Technology to establish content labs in 15,000 secondary schools.
New Institutions and Ministerial Reactions
Union Education Minister Dharmendra Pradhan praised the budget, calling it a “Budget for a Developed India.”
He said the budget promotes education and job creation while laying out a roadmap for the next phase of development, with bold investments to strengthen education and future-ready skills across the country.
The budget also proposes the establishment of a new National Institute of Design (NID) in the eastern region of India.
TCS Reduction Under Liberalised Remittance Scheme
The Finance Minister announced a reduction in the TCS rate from 5% to 2% for education and medical purposes under the Liberalised Remittance Scheme (LRS).
Under LRS, remittances exceeding ₹10 lakh or the total remitted amount for education or medical treatment will now attract a reduced TCS rate of two percent. Residents, including minors, can remit up to USD 250,000 per financial year for permissible current or capital account transactions.
However, for purposes other than education and medical treatment, the TCS rate of 20% will continue.
High-Level Committee on Education to Employment
The budget proposes the formation of a high-level permanent committee on “Education to Employment and Entrepreneurship” to recommend measures focused on the service sector.
Sitharaman stated that this initiative would help India become a global leader in services by 2047, increasing its share in the global services market to 10%. The committee will identify priority sectors with better growth, employment, and export potential.
She added that the committee will also assess the impact of emerging technologies, including Artificial Intelligence (AI), on employment and skill requirements and propose suitable measures.