Educationists hail FM focus on skilling, education loans in Budget 2024

To help students not eligible for any benefit under government schemes and policies, FM announced financial support for loans up to Rs 10 lakh for higher education in domestic institutions.

Educationists on June 23 hailed the Union Budget 2024-25 for giving the much-needed impetus to the higher education landscape in India.

Finance Minister Nirmala Sitharaman in her Budget speech announced a slew of measures from facilitating internships to education loans and said that this year’s prime minister’s package of five schemes and initiatives will promote employment, skilling and other opportunities for 4.1 crore youth over five years with a central outlay of Rs 2 lakh crore.

To help students not eligible for any benefit under government schemes and policies, the FM announced financial support for loans up to Rs 10 lakh for higher education in domestic institutions. Further, e-vouchers will be provided directly to one lakh students yearly for annual interest subvention of 3 percent of the loan amount.

"By integrating financial support for education, robust internship opportunities, and a strong focus on skill development, these measures not only empower our youth but also lay a solid foundation for sustainable growth and innovation. This holistic approach ensures that every segment of our society—from aspiring students to new startups—can contribute to and benefit from India's evolving economic landscape,” said Professor Ram Kumar Kakani, director of IIM Raipur.

Sitharaman on July 23 announced a record Rs 1.20 lakh crore for the education sector in the Union Budget for 2024-25. However, the allocated amount for FY25 is Rs 9,091 crore less than the revised estimate for 2023-24 and translates to a nearly 7.26 percent decline, compared with the previously revised estimate of Rs 1,29,718 crore.

While presenting the Union Budget 2024-25, the finance minister said that 20 lakh youth will be skilled over 5 years and 1,000 Industrial Training Institutes (ITIs) will be upgraded in hub-and-spoke arrangements with outcome orientation.

The FM stated that course content and design will be aligned to the skill needs of the industry and new courses will be introduced for emerging needs.

Focus on R&D, education loan 

About skilling loans, the finance minister announced that the Model Skill Loan Scheme will be revised to facilitate loans up to Rs 7.5 lakh with a guarantee from a government-promoted fund. This measure is expected to help 25,000 students every year.

“This budget for healthcare, agriculture, biotechnology and life science reflects the government’s vision and intent to promote the R&D, prioritise education, and provide employment-specific skills and training… There is also a strong emphasis on private sector-driven research and innovation overseen by domain experts from the public and private sectors,” said Professor Nishith Gupta, head of the Department of Biological Sciences at BITS Pilani.

Education loan interest rates range from 8.5 percent to 16 percent and experts say 3 percent interest subvention for students is a positive measure to enhance access to higher education, however, they add that there is still scope for improvement.

According to Aman Dhall, former India Alumni Ambassador and Alumni Advisory Board Member at the UK’s Loughborough University, with education fees rising, the current cap of Rs 10 lakh for this discount needs reassessment.

“For instance, a BTech course at BITS Pilani can cost Rs 25-30 lakh, excluding living expenses, and an MBA from IIM Ahmedabad costs nearly Rs 25 lakh,” he said, adding that to realise the vision of a Viksit Bharat (Developed India), we must make higher education accessible to all.