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Union Budget 2016: What education sector expects?

Dr Harivansh Chaturvedi, Director, BIMTECH says higher education will require huge funds to meet manpower needs of Make-in-India


Teachers are organised at national, state and local levels but our student community has hardly any say on budget matters

On February 29, 2016, Finance Minister Arun Jatiley will present the Union Budget. Since direction of the national economy for next one year is broadly determined by the Union Budget, all sections of the society are anxious to know how the budget is going to affect their own economy.

Education, health and social welfare are crucially significant for the overall prosperity of the common man, but there is hardly any lobby to raise these pressing issues related to financial requirements for these three sections. Teachers are organised at national, state and local levels but our student community has hardly any say on budget matters.

Higher education in India directly affects future of 30 million youth in the age group of 18 to 23 years who are enrolled in our colleges, universities and institutions of higher learning. Their parents are also concerned about cost, quality and outcomes of higher education.


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Since higher education caters to manpower needs of almost all sectors of economy – industries, government services, hospitals, armed forces, police, R&D labs, schools, media – civil society expect from colleges and universities to supply them manpower with required skills, competencies and abilities. There have been complaints about the competence level of graduates and postgraduates coming out from our universities and colleges which perceived to be less than adequate and recruiters have to spend large amounts on training freshly recruited manpower. NASSCOM and Merit Track have surveyed the employability of fresh BE/ B Techs and MBAs and found that less than one-fourth of them are employable by the industry.

In the above background, it is very important to debate the likely financial allocations to be made for higher education in the Union Budget to be presented by Mr Arun Jaitley. These allocations will largely determine how we are going to attain higher education targets set under the 12th Five year plan (2012-17). The Approach Paper for 12th plan says:-

“During the 12th Plan period, an additional enrollment of 10 million could be targeted in higher education equivalent to 3 million additional seats for each age cohorts entering the higher education system. This would significantly increase the GER bringing it broadly in line with the global average.”

In the last year’s budget, Finance Minister Arun Jaitley marginally reduced overall allocations towards education but increased the planned higher education budget by nearly 22 per cent, which meant a shift in focus from school to higher education in the national budget. About Rs.69,074 crore was allocated for education in 2015-16, as against Rs.70,505 crore in the revised estimate in 2014-15. The revised budget for 2014-15 has reduced the education allocation to Rs.70,505 crore from the budget estimates of Rs.82,777 crore. Out of the total outlay for 2015-16, Rs.42,219 crore was pegged for the school sector and Rs.26,855 crore for higher education.

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Allocations to the school sector was cut by around 10 per cent in its planned outlay from Rs.43,517.9 crore in the preceding year’s budget to Rs.39,038.5 crore in 2015-16. In comparison, higher education has been given a plan allocation of Rs.15,855 crore in 2015-16, as against Rs.13,000 crore pegged in the revised budget for 2014-15. Thus the higher education sector saw an increase of nearly 22 per cent.

In spite of big expansion during last two decades, Indian higher education is facing variety of challenges at all levels. Out of these challenges, one major challenge is related to the poor quality of education delivered by state universities and its affiliated colleges. Currently there are 330 state universities and 35,829 colleges which account for more than 90 per cent of total enrollment in higher education.

These state universities suffer from poor governance, high level of corruption and severe shortage of funds which ultimately lead to low standards. In the forthcoming Union Budget, higher education plans of state governments can be allocated funds by the Union Budget for academics reforms, better governance and infrastructural upgradations. Incentives can be offered to state universities for raising their own funds through upward revision in tuition fees and other legitimate means.

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To deal with the low level of employability both in professional and general streams of higher education, special funding can be given for curriculum modernisation, pedagogical innovations, and examination reforms. Our graduates now require skills beyond the basics of reading, writing and arithmetic (the 3Rs). There is a serious need to focus can the 4 Cs (critical thinking, communication, collaboration and creativity).

The problems of Indian Higher Education are endemic and are well-entrenched in our socio-political system. Prof Craig Jeffrey of Oxford University, UK has done extensive researches on Indian campuses and published a book.

In this book, he has termed Indian Higher Education as a “time pass” for the idle middle class youth who are unable to get a decent job on the basis of their degrees. They take admission in courses after courses for “killing” time and always look for a jugaad to grab a government job.

We cannot expect miracles from the Finance Minister for solving all the encrusted problems of higher education. But atleast Mr Jaitley can be reminded a promise made by the NDA to spend 6 per cent of GDP on education out of which 1.5 percent was to be allocated for higher education. Currently, only 1.22 per cent of GDP is being spent on higher education.

In 2010, the UPA government had announced setting up a National Education Finance Bank (NEFB). It is not clear why UPA-II could not executive its own decision? Should we expect from Arun Jaitley an allocation of Rs 10,000 crore for the equity capital of NEFB?

NEFB can play the catalyst in designing a new scheme of educational loans with low interest rates (say 5 to 7 per cent annually) and long payment period (15-20 years). Currently, only 1.5 of the per cent students are getting educational loans due to the high interest rates and lengthy procedures to get a loan. Bank can also provide loans at low rate of interest to a young entrepreneur for setting up schools, colleges and skill centers in small towns, cities and backward districts of the country.

Last year, the NDA Government has announced to draft a New Education Policy. A Drafting Committee under the Chairmanship of TSR Subramanian has been constituted with a mandate to submit its report in early 2016. Drafting Committee is expected to submit its report soon. Since the New Education Policy will set long-term directions of all levels in the Indian Education, we expect that the Finance Minister will increase allocation for education, particularly for Higher Education so that we could achieve 50 per cent Gross Enrollment Ratio (GER) by 2030. It will require huge funds to double the GER within the next 15 years.

In the ensuing budget, it has been said that there will be allocation of Rs 1.1 lakh crore for implementing the recommendations of 7th Pay Commission. It will take care the pay and pension hikes for 48 lakh central government employees and 55 lakh pensioners. The Finance Minister will have to give allocation for the implementation of 7th Pay Commission in Central Universities.

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Further, state governments will seek financial support from the Union Government to implement the 7th Pay Commission’s recommendation in the state public universities, government and private colleges. It is hoped Arun Jaitley will be able to make adequate provisions in his budget for meeting implications of 7th Finance Commission’s Report in the education sector.

Knowing well the severe resource constraints and political compulsions in budget making, we cannot expect big announcements and huge funds for higher education in the upcoming Union Budget. But we expect from Jaitley that his budget should ensure that no deserving youth from poor or middle-class family should be deprived of quality higher education for want of funds.


We also expect that the academic standards of state universities and affiliated colleges should be raised up to the level of IITs and IIMs so that benefits of quality higher education are not confined to a tiny minority of the Indian youth. In a democratic and plural society, it will not be fair that only a privileged class should get the world-class education and aam aadmi be given degrees which do not have much intrinsic value.

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