Elevating our education ecosystem for tomorrow

While budgetary allocations for improving infrastructure, quality, and access to education have increased over the last three years (Rs 1.12 lakh crore in FY 2024 as against Rs 99,300 crore in FY 2021), the allocation for Research and Development (R&D) continues to stand at an abysmal level of 0.7 per cent of the GDP, much below the global average of 1.8 per cent.

Additionally, the industry-academia collaborations, skilling and research ecosystem continue to remain at a nascent stage, with more work to be done to strengthen it further.

Government’s educational endeavours

Since the NEP was implemented in 2020, the sector has witnessed a regulatory overdrive. In line with the outlined vision, the government has introduced policy initiatives to foster internationalisation through academic collaborations, such as dual/joint degrees, twinning programmes, and enabling foreign institutions to set up campuses in India.

To bring more strategic focus and transparency to the Indian education ecosystem, formalising the Institutional Development Plan (IDP), mandating public self-disclosure of information by higher education institutions (HEIs) on their websites, and formulating a student grievance redressal mechanism have bolstered efforts towards this cause. Enacting the Anusandhan National Research Foundation (ANRF) Act, 2023, aims to improve the country’s research ecosystem.

Expectations from the impending budget

The lack of private capital for investment has often been a barrier for those wishing to establish educational institutions in India. Additionally, the regulatory and legal framework restricts foreign investments in trusts or societies (which is a regulatory pre-requisite), and this also makes foreign borrowings (External Commercial Borrowings or ECBs) an unattainable funding source for educational institutions in the country. Therefore, it is crucial to liberalise foreign investment and loan funding for educational institutions established as not-for-profit entities.

The Honourable Finance Minister announced in February 2020 that foreign investment and the ECB would be enabled for this sector, but four years later, it has yet to see the light of day.

Furthermore, the process and timelines for attracting donations from foreign sources continue to be long drawn and need to be urgently streamlined.

To facilitate new institutions, the government may consider establishing dedicated education zones with built-up infrastructure, either independently, through the private sector, or via public-private partnerships (PPP). These zones could act as plug-and-play lease-based models for institutions, thereby reducing their capex requirements. Also, common infrastructure facilities like student/ faculty housing, sports amenities, entertainment centres, research centres, etc., could be made available to multiple universities in such zones on a shared basis.

While reducing capital costs for institutions and students, these zones would offer opportunities for multicultural exchanges and cross-learning. To encourage private sector participation, the government could provide support and incentives in the form of subsidised land, tax rebates, or GST exemptions.

Although the NEP mentions Special Education Zones, these are intended for disadvantaged areas. To benefit from industry-academia collaboration and improve accessibility for students, these zones should be established near metropolitan cities.

With respect to strengthening the research ecosystem, while the ANRF Act mentions a broad fund to be utilised, detailing out-of-fund allocation mechanisms, monitoring outcomes and eligibility for the participation of all needs to be defined clearly.

GST adds to the cost base of educational institutions. While inward supplies are taxable, outward educational services are exempt from GST, increasing the cost of education and making it more expensive for students. Therefore, either exemption for inward supplies should be granted or the supply of educational services by universities and educational institutions should be zero-rated, allowing them to receive refunds on GST paid for input procurement.

Government-to-government (G2G) dialogue

With geo-political headwinds, we see many countries impose caps on international student mobility and visa grants, probably due to their internal pressures due to lack of student housing, employment for their own citizens, etc. For internationalisation and student mobility to happen in the true spirit, mutual recognition of qualifications between countries is essential.

While India has taken steps towards this with Australia and the UK, G2G dialogue with other countries should also be initiatedalong with dialogue to ensure wider student mobility, skilling opportunities and research collaborations.

I guess the sector still has miles to go before it realises its true potential, but all hands are on deck for the next few years as we consider preparing our youth for tomorrow!