A total of Rs 1 lakh crore will be invested in the next four years for research and the creation of related infrastructure "in premier educational institutions".
Two new "full-fledged" Schools of Planning and Architecture (SPAs) will also be established, besides setting up 18 new SPAs in the IITs and the NITs as "autonomous schools".
The Prime Minister's Research Fellows (PMRF) Scheme will be launched for meritorious engineering graduates this year to enable them do PhD in the IITs and the IISc.
"Under this scheme, we would identify the 1,000 best BTech students each year from premier institutions and provide them facilities to do PhDs in IITs and IISc, with a handsome fellowship," Finance Minister Arun Jaitley said while presenting the Union Budget in the Lok Sabha on Thursday.
The government will also establish the 'Ekalavya Model Residential School' on par with the central government-run Navodaya Vidyalayas to provide "the best quality education" to tribal children "in their own environment" by 2022.
The schools will be established in "every block with more than 50% ST (Scheduled Tribe) population and at least 20,000 tribal persons", Jaitley said.
These schools will be equipped with special facilities for preserving local art and culture, besides providing training in sports and skill development.
Announcing the roll out of the PMRF Scheme for engineering graduates, the finance minister said, "It is expected that these bright young fellows would voluntarily commit a few hours every week for teaching in higher educational institutions".
The proposed investment of Rs 1 lakh crore for research and related infrastructure under a new scheme titled 'Revitalising Infrastructure and Systems in Education (RISE) by 2022'.
In the Budget speech, the finance minister expressed concern over the lack of quality of school education in the country and proposed to increase "the digital intensity" in education by replacing black boards in country's schools with "digital boards".
He, however, neither proposed any budgetary provisions for this at this point in time nor gave any timeline for the implementation of the proposed initiative.
"Technology will be the biggest driver in improving the quality of education. We propose to increase the digital intensity in education and move gradually from 'black board' to 'digital board'," he said.
Technology will also be used to upgrade the skills of school teachers through the recently launched digital portal 'DIKSHA', he said.
Reiterating the Modi government's commitment towards improving the quality of education, the minister told the Lok Sabha that the government will initiate an integrated BEd programme for teachers, a proposal pending since 2015.