Scholarship Allocations Show Gains for SC, ST and OBC Students, Cuts for Minority Schemes

The Union Budget 2026, 27 reveals a somewhat contradictory scenario for student scholarships. On the one hand, there are increased allocations for the Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBC). On the other hand, several minority, focused schemes suffer steep cuts. The government has portrayed the total education budget as a tool for equity and skilling, but the reshuffling of funds among scholarship programmes has raised alarm among educationists and the minority community.

Post matric scholarships for OBC students under the Ministry of Social Justice and Empowerment have been given a major thrust with the allocation of nearly Rs 1, 300 crore. Fellowship and scholarship schemes for Scheduled Tribe students have also been strengthened, including an increase in funding for ST fellowships to around Rs 340 crore. An official source points out that these increases are basically aimed at lowering the dropout rate in higher education and helping students from historically marginalised communities to go for professional and postgraduate courses.

Nevertheless, the scholarships administered by the Ministry of Minority Affairs have been greatly affected. The Post Matric Scholarship for minority students has been slashed by almost 33 per cent, with the allocation coming down to Rs 581 crore. The Merit, cum, Means Scholarship that helps minority students of technical and professional courses has received an almost zero amount, whereas the funding for madrasa education schemes has been completely stopped.

One of the risks of these very steep cuts, several education experts are warning, is that they can directly impede students from economically weaker minority families to access higher education, particularly in those states where community based institutions are, to a great extent, responsible for schooling. Many civil society organisations have raised the alarm about the possibility of increased dropouts at the secondary and undergraduate levels if the financial support is not brought back.

The government, on the other hand, argues that their broader investments in higher education infrastructure, girls' hostels in every district, and skilling, linked institutions will more than make up for the reduction of the targeted schemes. Besides, government officials have also highlighted the consolidation of welfare delivery through Direct Benefit Transfer (DBT) and the ministry's concentration on outcome- based funding.

Despite a general increase in the education budget to Rs 1.39 lakh crore, critics argue that scholarship funding continues to be fragmented and uneven. Since India is still below the National Education Policy's target of spending 6 per cent of GDP on education, analysts say that scholarships are probably one of the most effective means of ensuring social mobility and inclusive growth.

While Parliament debates the Budget, scholarship allocations are likely to be a contentious issue in a wider context of concerns about equity, access, and the social priorities reflected in India's expenditure on education.