India’s National Education Budget for 2023-24

The Indian union government announced its national budget for the upcoming financial year 2023-24 which is the last budget placed by the current government in the Parliament before the next general elections in India in 2024. The budget allocates around INR 1.13 trillion (£11.3 billion) in national-level education spending, covering school and higher education. Meanwhile the technical and vocational education sector has been allocated a budget of around £352 million.

The overall vision of the budget is to have a technology-driven and knowledge-based economy with strong public finances, and a robust financial sector.  The government aims to achieve this through creating opportunities and fulfilling the aspirations of citizens, especially young people; providing a strong impetus for growth and job creation; spurring green growth; and strengthening macro-economic stability.

Within the overarching vision of the budget, the national education outlay has been increased by 13 per cent from the previous year, with school education having a significant increase of 16.5 per cent and higher education by 8 per cent.

The charts below show that education spending dropped in 2020 and 2021 as a result of the Covid-19 pandemic, which caused disruption to school functioning and planned activities as well as re-prioritisation of funds to healthcare and pandemic management. However, from 2022 onwards the budget has increased year on year and is now well above the pre-pandemic level. This year’s budget is the highest ever allocation to the Education Ministry.

The national education budget however does not represent India’s total planned education expenditure. Allocations are also made at the state level and these must be combined together to provide a full picture.  According to India’s latest Economic Survey 2022-23, total education outlay, including both national and state level expenditure, added up to 2.9 per cent of the country’s 2022 GDP – a proportion that has remained constant for the last four years.  This is much lower than the ambition of India’s education budget to be at 6 per cent of GDP set out in the National Education Policy 2020 . The proportion of total annual education spending has been around 10 per cent of total government expenditure across all sectors and  dropped to below 10 per cent since 2020-21.

In the vocational education and skills sector, the Ministry of Skills Development and Entrepreneurship has been given an allocation of INR 35.2 billion (£352 million), which is an increase of 85 per cent over last year’s revised estimate.

Key announcements set out in this year’s budget related to education and skills development are listed below:

Directly led by the Ministry of Education

• Teacher training will be revamped by developing District Institutes of Education and Training as institutes of excellence and using innovative pedagogy, curriculum transaction, continuous professional development, dipstick surveys and ICT implementation.
• A National Digital Library for children and adolescents will be set-up and states will be encouraged to set up physical libraries at village level and provide infrastructure for accessing the National Digital Library resources.  This will enable building a culture of reading and to make up for learning loss over the pandemic period. 
• 38,800 teachers and support staff will be recruited over the next three years for the 740 model tribal residential schools which were announced in 2020 and cater to around 350,000 tribal students. 

Led by other Ministry and linked to higher education institutions, research and development

• Facilities in select Indian Council for Medical Research labs will be made available for research by public and private medical college faculty and private sector R&D teams for encouraging collaborative research and innovation.
• A new programme in pharmaceuticals will be undertaken through Centres of Excellence to promote research and innovation. Industry will be engaged to invest in research and development in specific priority areas.
• Dedicated multidisciplinary courses for medical devices will be supported in existing institutions to build skilled manpower for futuristic medical technologies, high-end manufacturing and research.
• To set up an effective AI ecosystem, three Centres of Excellence for Artificial Intelligence will be established in top educational institutions in partnership with industry.  This will include interdisciplinary research, cutting-edge applications and scalable problem solutions in the areas of agriculture, health, and sustainable cities.
• 100 labs for developing applications using 5G services will be set up in engineering institutions to explore a new range of opportunities, business models and employment potential. The labs will cover applications like smart classrooms, precision farming, intelligent transport systems, health care applications etc.
• A National Data Governance policy will be developed to promote innovation and research by start-ups and academia.  For HEIs, it would help in their research with access to anonymised data.
• A research and development grant for indigenous production of Lab Grown Diamond seeds and machines will be given to one of the Indian Institute of Technology (IIT) for 5 years. This will involve an industry led research and innovation effort, with the purpose to expanding India’s export in this sector and generate employment.  
• For facilitating ease of business, targeted measures will be undertaken in the GIFT City, a new business district offering financial services and technology related activities.  It includes setting up a single window IT system for registration and approval from the key banking and tax regulators, recognising offshore derivative instruments as valid contracts etc.  GIFT City recently announced policies allowing overseas HEIs to set up branch campuses and offshore education centres in the city.

Led by the Ministry of Skills Development and Entrepreneurship

• The fourth version of the national short-term skills training programme (called the Pradhan Mantri Kaushal Vikas Yojana) will be launched within the next three years. It will include on-job training and industry partnerships and cover new age courses like coding, AI, robotics, mechatronics, IOT, 3D printing, drones and soft skills.
• Additional 30 Skill India International Centres will be set up across different states to skill youth for international opportunities.
• A unified Skill India Digital platform will be established for enabling demand-based formal skilling, linking with employers including MSMEs and facilitating access to entrepreneurship schemes.
• In the existing National Apprenticeship Promotion Scheme,  direct benefit transfer will be provided as stipend to 47 lakh youth in three years.

Which elements have got a financial boost in the national education budget?

School Education budget

• A new scheme launched in 2022, called the PM Schools for Rising India (PM SHRI) got an allocation of GBP 400 million, which is a 900 per cent increase over its first year’s revised estimate.  This programme aims to prepare more than 15000 schools of excellence which will provide leadership to other schools in the neighbourhood through high quality, equitable and inclusive education. This scheme will run till 2027.  More than 20 lakh students will benefit from diverse background, multilingual needs and different academic abilities. 
• The World Bank aided programme called the Strengthening Teaching-Learning and Results for States (STARS) allocation of GBP 80 million is twice as much of the previous year’s revised estimates.  The project support the states in developing and implementing interventions for improved education outcomes and school to work transition strategies for improved labour market outcomes.
• Another new programme launched in 2022 for adult education and lifelong learning, New India Literacy Programme increased by 57 per cent over its previous year’s revised estimate.
• Increase of 12 per cent is observed over last year for various autonomous bodies in school education covering Kendriya Vidyalaya Sangathan, Navodaya Vidyalaya Samiti, National Council of Educational Research and Training etc

Higher Education budget

• The budget allocation for India’s Institutions of Eminence has increased by 25 per cent from last year’s revised estimates.  This project aims to establish 10 institutions each in public and private sector which achieve the highest levels of global excellence in teaching and research.
• The research and innovation budget has increased over the years.  The 2023-24 allocation of GBP 21 million is an increase of 275 per cent from the actual amount spent in 2021-22.  It is however interesting to note that funding for most research programmes has stayed the same or decreased marginally, but funding for the new World Bank aided project called Multidisciplinary Education and Research Improvement in Technical Education (MERITE) has increased exponentially from around £900,000 to around £10 million. It will be implemented in about 350 public sector engineering institutions and affiliated technical universities.
• The national mission on teachers and teaching which provides an integrated platform for building synergies among all the existing initiatives and augment capacity at individual level and also enhance institutional infrastructure for pre service and in service teacher training gets an increase in the allocation as GBP 4.5 million, a rise of 80 per cent.
• The University Grants Commission, the higher education regulator for non-technical education has received an increased allocation of GBP 536 million. This has steadily risen in recent years.  The allocation for All India Council for Technical Education, the second regulator and responsible for technical education has had its allocation maintained at GBP 42 million for the last three years.
• Funding for autonomous institutions in higher education have increased by 89 per cent over the last year’s revised estimate.  The main increases are observed in grants to central universities, deemed universities which are promoted by the central government, Indian Institute of Technology, Indian Institute of Information Technology, Indian Institute of Science, Education and Research, School of Planning and Architecture and grants to Councils/Institute of Excellence in Humanities and Social Sciences.

Comments

This is an important budget year for the national government before the country goes into national elections next year.  Viewed from this context, the national budget for 2023 contains something for all – it is a mix of welfare and infrastructure led growth priorities with focus on inclusion and indigenisation.

While the Indian government has promoted the 2023 national education budget as the country’s highest ever, government education spending as a percentage of GDP has stayed the same for the last three years. Total education expenditure as a percentage of all government expenditure has increased slightly but remains lower than the percentage share in 2019-20.  This is likely to be due to low contributions towards the education sector from states, affected by their poor fiscal health and lower devolution of taxes received from the centre.  State level allocations for 2023 are yet not available to assess any changes in this regard.

The education programme outlay and the priorities announced in the budget demonstrate the intention of the national government to build on the reforms it started rolling out in line with the National Education Policy 2020 and bring about improved synergy in interventions and efficiency in implementation for better learning outcomes.  By March 2022, the student enrolment in higher education has increased from 39 million to 41 million, and the number of higher education institutions (HEI) has increased  to 1,113 universities, 648 medical colleges and 23 Indian Institutes of Technology. 

Various reforms which are already underway include the national curriculum framework for the foundation stage in schools, the National Credit framework which opens avenue for further progression for students and allows them to integrate credits earned through school education, higher education, and vocational and skill education, establishment of research and development units (“cells”) in HEIs for promoting quality research and productivity through collaboration with industry and national/international agencies, internationalisation of higher education through new regulations on academic collaborations and inviting international branch campuses.

Reforms in the education sector are expected to continue to progress, with the additional renewed focus laid out by the government on reading skills for students, teacher development, research and development in niche areas through this budget.  The budget also provides further impetus for skills development to accelerate progress in meeting the objectives of the flagship Skill India initiative launched by this government in 2015.