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India’s interim national education budget 24/25

India’s government, which is now in the final year of its term with national elections scheduled in a few months, has presented a provisional budget for the upcoming financial year. This is to ensure continuity of government expenditure and essential services until the new elected government presents a full and final budget for the year.  If the current government is re-elected there are likely to be minor changes (if any) made to the interim budget.

The national education budget, covering both school and higher education, has received one of the largest allocations in many years with total funding of around £12 bn, an increase of around £1 bn over last year. In percentage terms, the education budget constitutes 2.5 per cent of the total year’s national spending allocation. This figure does not include state-level spending on education, which makes up a large proportion of total government education spending.

Through the interim budget, the government has reiterated its long-term vision towards Viksit Bharat, which means making India a developed country by 2047. It recognises four main pillars of ‘Poor, Youth, Women and Farmers’ in taking the country forward.  Their empowerment and progress would be at the centre of all government priorities.

The trajectory laid out by the government previously in building physical, digital and social infrastructure continues to hold prominence. A lot more thrust is towards expansion of railways, aviation and road transport sectors to improve logistics and goods mobility in India. Other prominent areas include sustainable development, housing, agriculture, science, research and innovation.

Main highlights of the education budget

School education historically always has had a larger share of the total national education budget, in the ratio of 60 per cent to 40 percent for higher education. The school education outlay which has grown at 6.1 per cent from previous year, accounts for 61 per cent of national-level education spending while higher education is 39 per cent of the total national budget outlay.           

The higher education budget is increased by 8 per cent over last year’s budget, increasing at a similar pace to the previous two years. However, actual expenditure in 2022-23 was more than the initial allocation and the allocation in the interim budget is actually 16 per cent lower than the revised value, implying that the real need may be more than what has been planned.  

Using budget outlay as an indicator to explore government’s priorities and where it is likely to put its weight behind such activities and interventions, the following areas emerge as the key priorities. They are:

  1. Digital e-learning component which includes higher education data system and Academic Bank of Credit – a government initiative to increase credit portability and give students more flexible study options.  The budget for this has been consistently increasing over the last three years.  This year, the budget has grown by 122 per cent.
  2. Research and Innovation, which has a 69 per cent increase over last year.  Under this, both SPARC and MERITE programmes which focus on academic and research collaborations in science, engineering and technical education have a 100 per cent increase in their allocations compared to the previous financial year.
  3. Apprenticeships in higher education, which saw a budget increase of 50 per cent taking the total to £60 Mn. 
  4. The National Mission for Teachers and Teaching – a scheme aiming to improve teacher training – whose funding goes up from £4.5 Mn to £10 Mn.
  5. The Centre of Excellence in Artificial Intelligence, which has seen its budget increase to more than seven times its previous year’s allocation (a 620 per cent increase).  The budget is now £25.5 Mn.
  6. Central Universities’ budget is increased.  These are set up and managed by the national government.
  7. IGNOU, Indian’s open and distance education university, which sees another year of increase in the allocation.
  8. The new National Digital University which is still to be set up gets a 2400 per cent jump from its last year’s allocation.  The budget allocation is £10 Mn.

Reductions are observed in:

  1. UGC’s budget which is sized down by 53 per cent in relation to last year’s budget.  This is believed to be largely due to the realignment of the budget.  The funding that used to go from UGC to universities and colleges has been moved to the Central Universities budget.
  2. Dedicated research funding for Social Sciences is reduced to zero and will be a key challenge for the HEIs given limited options to explore. Most research funds are available for STEM.

A few announcements not funded by the education sector but of interest are:

  1. Opening of more medical colleges by utilising existing hospital infrastructure under various departments.
  2. A corpus fund of GBP 10 bn will be set up to boost research and innovation.  Fifty-year interest free loan to financial institutions will be provided in sunrise sectors. Under this fund, the interest earned would be disbursed whilst the principal amount stays untouched.
  3. A new scheme for strengthening deep-tech technologies for defence purposes will be launched.

British Council comments:

The Indian academic community considers the interim budget to be an incremental one and they note that overall education funding is still significantly below the target of 6 per cent of GPD outlined in the NEP.  In particular the outlay has not been in proportion to the goal of increasing the gross enrolment rate target to 50% from current levels by 2035.  The Centre for Budget Governance and Accountability has pointed out that education funding is increasingly dependent on cess, which is an additional tax surcharge earmarked exclusively for education. Money from this tax now funds almost 74 per cent of the school education budget and 33 per cent of the higher education budget.  

While the budget is increased for research and innovation in STEM through range of options on the other hand dedicated budget for policy research in social sciences has been discontinued from last year. This is beginning to impact universities and colleges to pursue research activities in social sciences and they would need to work creatively to explore funding through in-house or other alternate options.

The budget reduction of UGC is also being viewed as a move to transit the domestic HE regulator from its role of grant allocation to universities and colleges to a regulatory function only.  This might be in preparation for the Higher Education Commission of India, one of the big reforms awaited to consolidate various regulatory, accreditation and funding bodies into one umbrella entity.

The government’s thrust towards digitisation continues with the aim to improve access and address unmet demand in higher education.  The National Digital University, which was announced last year, has received an increased allocation in the interim budget. The government looks set to tap the potential of online education and align it with the academic credit banking system which has also received a big budget increase so that the efforts are complementary.  This is intended to permit students to choose courses in different formats based on credit system and will offer flexibility to move between academic education, vocational education and employment.

Some slowness in activities can be expected during the election period but changes that have started will continue.  Further clarity and details would be available when the full budget is presented after the elections.