Education Reforms in the Union Budget

By Tara Panjwani

Those who were eagerly anticipating radical reforms to reverse the current economic decline (GDP growth below 5% and unemployment rate as high as 7.7%) might be left wanting more as this Union budget gave little cause for cheer - especially to the country’s jobless youth.

Although measures such as increased spending on infrastructure, a rural sector action plan, allowing FDI/ECB and online degrees, and launching apprenticeship courses are all steps in the right direction, they are at best quick fix band-aids for an ailing economy.

In the education sector there were many missed opportunities…

The budget earmarked Rs 99,300 crore (GBP 110 billion) (up from Rs 94,800cr (GBP 102 billion) last year) for the education sector in 2020-21 and about Rs 3,000 crore (GBP 3.2 billion) for skill development. Although at first glance this looks like a significant increase, it is worth pointing out that the share of budget allocation towards education has in fact declined quite considerably – from 4.14% in FY 2015 to 3.4% in FY 20, ranking India an unimpressive third in education spending amongst the five BRICS nations.

Many experts thought that Rs 99,300 crore (GBP 110 billion) fell short of expectations and was not enough to match the current demand. Consequently, the decision to allow the sourcing of much needed additional finance through External Commercial Borrowings (ECBs) and Foreign Direct Investment (FDI) to deliver better education is seen as a welcome move. However, given the volatile political environment and the recent attacks on well-known Indian universities, this stream of international income may take longer than expected to flow in.

Therefore, rather than relying solely on the ECB & FDI avenues, the government should broaden its approach and cast the net even further to try to attract more domestic private investments and funds into educational institutions in a timely manner.

According to the latest Economic Survey, the lack of a suitable financial support system combined with exorbitant course fees, especially in higher education, isolate the poor and underprivileged sections and push them out of the education system. “To ensure underprivileged students can study in these private institutions, the Government should increase allocations to scholarships from the education budget and transfer the same directly into the account of students or through education wallets.” (Manjeet Singh, CEO, Buddy4study).

The introduction of degree-level full-fledged online education programmes – one of several recommendations that UKIBC made in our latest Higher Education report Futureproofing the UK India Partnership – to be offered by the Top 100 ranked Indian institutions as a way to provide quality education to students of deprived sections of the society is a positive initiative but appears to be lacking in thought and detail.

For example, the cost of the programme would have to be very low and supporting mechanisms would need to be provided to the poorest masses at the bottom of the pyramid who cannot afford digital devices. It is also worth questioning what would incentivise these top ranked institutions to offer online degrees to underprivileged students who are unable to pay the full price?

Restricting the provision to only elite educational institutions also seems unnecessarily restrictive and short-sighted since the demand for online education far outweighs the supply. At the UKIBC, we have been regularly campaigning to allow all reputable UK universities offering specialist courses to be allowed to operate in India regardless of their global ranking. (Read our full report here: ‘Beyond the Top 200’). We would recommend that the same should apply to Indian universities when it comes to allowing them to offer these online degrees – look beyond the Top 100 and let all capable institutions offer these degrees.

It will be interesting to see whether these full-fledged online degree programmes will receive recognition from industry and how these programmes will stand out from comparable offerings like the MOOCs (massive open online courses).

The budget also stated that 150 higher educational institutions would start apprenticeship-embedded degree or diploma courses by March 2021 to increase employability of fresh graduates. Once again, this approach seems limiting as 150 is disproportionately small when compared to the immense scale of India’s employability conundrum.

The Finance Minister referred to the much-awaited New Education Policy (which has been pending in Parliament for over a year) being announced soon but provided no further information as to when and how this would happen. In addition, some important structural reforms were not addressed – such as creating a corpus fund to increase the salary of teachers across education levels in order to incentivise quality teaching across the country.

Upon reflection, the education measures in this Budget give the impression that the Government is only slowly progressing rather than taking definitive steps to bring about a paradigm shift in the Indian education sector. The real priority of the authorities should be as follows: delivering quality education across the country and across all income levels, enhancing employability, and creating new jobs – a three-pronged solution which will enable India to capitalise on its demographic dividend and transform the economy. UK Higher Education institutions can and want to play an important role in supporting this goal at every level.


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