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Budget 2017: Spend on education sector seen falling short

Experts feel the Budget spend on education is woefully inadequate for a country which is aspiring to create a pool of skilled workforce to fuel economic growth.

August 05, 2017 / 10:07 PM IST

Sidhartha Shukla


Budget 2017-18 was billed as ‘no-nonsense’ by many, but its impact on the education sector is not yet clear.

The government has allocated roughly Rs 80,000 crore for the sector, about 10 percent higher than last year.

While the number may seem huge, one has to view it in proportion to the total expenditure. Compared to peers, India spends the least on education.

Experts feel this is woefully inadequate for a country which is aspiring to create a pool of skilled workforce to fuel economic growth.


The budget for Sarva Shiksha Abhiyan (SSA) was increased by Rs 1000 crore, and that for Rashtriya Madhayamik Shiksha Abhiyan (RMSA), teacher training and adult education has been increased by Rs 305 crore compared to the revised Budget estimate for FY17.

The mid-day meals scheme, which continues to face problems and much criticism since inception, will get only Rs 300 crore more.

Speaking to Moneycontrol, Rohin Kapoor, Director, Deloitte Haskins & Sells LLP says, “There has been shortage of funds, lack of quality control in schools and instances of vendors providing poor quality, sub-standard meals to kids. So, the entire implementation of Sarva Shiksha Abhiyan has not come to fruition  as per the desired objectives of the government and the SSA allocation that has been increased by Rs 1,000 crore is clearly not enough to tackle these challenges.”

As per the Right to Education (RTE) forum only 8 percent schools have been made RTE compliant since the act came 6 years back.

How India stacks vs global averages

Amongst the BRICS nations, despite a significant growth in gross domestic product (GDP) over the years, the share of GDP devoted to education remains low for China and India.

India has decreased its spending on education from 4.4 percent of GDP in 1999 to around 3.71 percent as per this year's budget estimate, undermining the work done in getting more children into school, and its prospects for improving its poor quality of education.

The Kothari Education Commission had recommended an allocation of 6 percent of GDP on education, which has never been achieved.

“Most of the developed world, having a more mature education system then India and higher levels of GDP are even today spending around 4.5 to 6 of GDP on education sector, realizing the benefit the education sector has on society, but in India, despite the massive demand-supply gap in the quality of education, still has not been able to reach those levels,” Rohin Kapoor says.

As per the BRICS Joint Statistical Publication for 2015, India had spent the least amongst the peer nations on education.

On a global platform, Legatum Prosperity Index for 2016 has ranked India 102 out of 149 countries that have been assessed in the study. It is way behind compared to other developing countries like Indonesia (72), Sri Lanka (58), Thailand (59) and more.

But there's hope

The Union Budget did have some promising reforms and initiatives that will benefit the education space in India.

“There are some bright spots with the set-up of Innovation fund for local innovation in school education; more colleges will be identified for autonomous status and a national testing agency for all entrance exams,”  says Narayanan Ramaswamy, Partner and Head of Education and Skill Development, KPMG India.

“The 4000 crore for SANKALP targeting 3.5 crore youth, Rural Mason training scheme targeting 5lakh youth by 2022 are encouraging,” he added.

“Focus on monitoring and improving learning outcomes through investment in ICT enabled transformation is expected to have far-reaching impact on improving quality, equity and access of education in the country. Greater autonomy in higher education will address long-standing demands of the industry and hopefully facilitate our entry into global Ivy League. Announcement of national testing agency to remove operational burden of regulators is also a welcome step,” Rohin Kapoor said.

Road ahead

Even in the midst of a global turmoil and geo-political uncertainties, India has outshone its peers in terms of growth and is viewed as a fundamentally strong economy.

This shows that not all hope is lost and much of the damage control can still be done going ahead if the government focuses on strict implementation of its reforms and tries to plug funding leaks.

With the implementation of the goods and services tax (GST), a well-functioning taxation system will enable the government to support the nation’s education system with domestic finance.

India has a great potential to mobilize domestic resources for education through improved taxes. Higher levels of tax revenue in Brazil help explain how it spends ten times as much as India per primary school child.

Another way would be to incentivize the private sector, which is one of the highest investor in research and development in the western world.

"Removing ambiguity around foreign investment, demand for increasing public sector investment and incentivizing private participation in the sector have to be adequately addressed," Kapoor says.

Sidhartha Shukla
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