Educationists have raised alarm over the decreased budget allocation for education in the Union Budget 2024-25 presented by Finance Minister Nirmala Sitharaman on July 23.
A record Rs 1.20 lakh crore was allocated to two departments, School Education & Literacy and Higher Education. However, the allocated amount for FY25 is Rs 9,091 crore less than the revised estimate (RE) for 2023-24, and translates to a nearly 7.26 percent decline, compared with the previously revised estimates of Rs 1,29,718 crore.
Allocation for schools increased 4.2 percent from Rs 68,804 crore (Budget Estimate) in 2023-24 to Rs 73,008 crore in 2024-25, a meagre growth from the RE of Rs 72,473 crore of 2023-24.
Higher education received Rs 47,619 crore in 2024-25, an increase of 7.68 percent from Rs 44,094 crore (BE) from 2023-24. However, it is low when compared to the RE of 2023-24 of Rs 57,244 crore.
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“The decline in allocation for school education and higher education does not align with the recommendation of the National Education Policy (NEP) 2020, which proposes 6 percent of GDP allocation to the education sector…..Lack of funding can also affect teacher salaries and resources, leading to reduced morale and higher turnover rates,” Bikram Agarwal, CFO at Seth Anandram Jaipuria Group of Educational Institutions, told Moneycontrol.
Allocation to the University Grants Commission (UGC), the higher education regulatory body, has been reduced to Rs 2,500 crore. Last year, UGC was allotted Rs 5,360 crore and it was later revised to Rs 6,409 crore (RE).
“.....This reduction might affect various educational programmes, scholarships, and initiatives aimed at improving educational outcomes and equity, potentially slowing down the momentum gained in previous years,” said Dr Ashok Mittal, Chancellor of Lovely Professional University (LPU).
Missing focus
Along with the optimisation of existing resources, government authorities are advised to deliberate upon supplementary funding modalities, including but not limited to educational bonds, international grants, and partnerships with esteemed global academic institutions.
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Education experts say this strategic diversification of financial avenues not only augments fiscal sustainability but also enhances the resilience of educational initiatives amidst fluctuating economic landscapes.
“Digital education platforms and open educational resources can also provide cost-effective ways to reach a larger number of students. Furthermore, incentivising private sector investment in education through tax benefits and subsidies can help bridge the funding gap,” said Dr Bhupendra Bahadur Tiwari, Professor and Director of CMR University, Bengaluru.
To help students who are 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 1 lakh students yearly for annual interest subvention of 3 percent of the loan amount.
On this, experts say lenders could have been incentivised.
According to Dr Madhu Veeraraghavan, Pro VC at Manipal Academy of Higher Education, Bengaluru, lenders to students have the best information on the employability of their borrowers and they could have been incentivised to route skills and education to the industries and service to specific employers, thereby increasing efficiencies.
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