Budget series – Sector focus on Higher Education

By Tara Panjwani

The first ever paperless Union Budget, for the financial year 2021-22, was presented by the Finance Minister on 1st February. While it included some commendable initiatives, it also missed its mark in several crucial areas.

The priority given to the healthcare and infrastructure sectors as well as the focus on growth, investment and jobs are welcome developments in the aftermath of the coronavirus pandemic which wreaked havoc across all sectors of the economy.  In addition, the emphasis in the budget on using technology as an enabler for social impact and inclusion in critical areas like education, urban governance and provision of benefits to migrant workers is also a step in the right direction.

Acknowledging Education as the fourth pillar under the “Reinvigorating Human Capital” theme, the Finance Minister highlighted several measures to improve the schools, universities and skills sectors. These include the following:

  • Establishing over 15,000 exemplar schools which will incorporate the ideals of the National Education Policy (NEP) and help other schools to achieve excellence;
  • Post-matric scholarship schemes to benefit 40 million Scheduled Caste (SC) students;
  • Creation of a formal umbrella structure that would promote better synergy, multidisciplinarity and autonomy between centrally funded institutions in nine cities;
  • A 45% increase in the allocation to e-learning and the launch of a new scheme titled ‘PM e-Vidya’ to provide multi-modal access to education for teachers and students that is expected to help improve education delivery in a post-pandemic era;
  • Among the initiatives announced as part of the first year of NEP implementation was setting up of the Academic Bank of Credit (ABC) to which £5 million (INR 50 crore) has been allocated. In this repository, students’ academic credits — calculated on the basis of classwork and tutorials — will be stored;
  • While referring to the National Research Foundation (NRF) which she had announced back in July 2019, the Finance Minister confirmed that the NRF outlay will be approx. £5 billion (INR 50,000 crore) over a period of five years and will be used to fund, coordinate and promote research in the country;

While these announcements are all positive and reassuring, there are also several missed opportunities and gaps in the policies.

For example, the private sector should also have received some level of R&D-related incentives as it has a pivotal role to play in forging industry-academia partnerships and in strengthening India’s research and innovation ecosystem.  This is an area that the UKIBC have been actively campaigning for and have recently launched our new University Corporate Partnership programme specifically to build new links between UK universities and Indian businesses.

Where the skills sector is concerned, it was encouraging to hear the government’s intention to amend the National Apprenticeship Training Scheme to provide post-education apprenticeships in engineering. However, this redesign would be much more impactful if it is expanded to include other subjects as well and not just remain restricted to engineering.

The new collaboration with Japan for training and transfer of Japanese industrial and vocational skills and techniques opens a window of opportunity for UK skills providers to pitch their world class expertise in the TVET sector.

Perhaps the most concerning aspect of the Budget was the cut in the government’s proposed spending on education, which is being reduced by Rs 6000 crore (£598 million) at a time when it should instead be sharply ramped up to reverse the immense disruption caused by the pandemic. School education was hit the hardest with a reduction of almost Rs 5000 crore while the budget for higher education decreased by Rs 1000 crore to Rs 38,350 crore (GBP 3.8 billion) this year. The reduced spending goes against all the recommendations of the NEP which strongly advocates increasing government expenditure on education.

A May 2020 report by the World Bank rightly pointed out that additional funding is imperative for institutions now “to implement new health and safety requirements, and undertake the outreach activities needed to persuade students to return”.

However, the Budget was silent on this topic, with no measures to recover learning loss or re-enrolment campaigns or any targeted support for children who are at risk of not returning to school.

The government also cut funding for the Higher Education Funding Agency (HEFA), which has led some to question the validity of the Agency. Only Rs 1 crore has been allocated to the agency this year — a sharp drop from Rs 2,100 crore in 2020-21.

Taking the above points into consideration, we believe that the Indian Government should follow the recommendations in the National Education Policy and increase its funding allocation for education, and invest in three critical areas that need urgent attention:

  • putting in place the necessary frameworks to bring students back into the system,
  • developing digital platforms to respond to the exponential demand for online learning;
  • providing regular training, support and resources to teachers to enable them to make the most of this new technology.

These measures would go a long way in making the Indian HE ecosystem more inclusive and accessible to the masses and building resilience to withstand any future shocks.

UK Higher Education institutions can and want to play an important role in supporting this goal at every level.


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