Even as small increases on schemes under education were announced, all in all, the Budget proved lacklustre from the view point of undertaking reform measures

It was not just another Budget for the Finance Minister of India earlier this month. The third Union Budget for Arun Jaitley came in the light of the demonetization exercise that scrapped over 86% of the currency in India as legal tender. Clearly, the FM was expected to undertake palliative measures for the economy after the note-ban.

Owing to the note ban, lack of currency has especially hit the informal economy in the country. With construction jobs drying up, several reports have indicated a reverse migration taking place with people moving back to the rural areas in search for jobs.

But at the same time, with major state elections coming on heels, a populist Budget could pose serious doubts over the government’s decision to anticipate the Budget by a month.

So where did the education sector figure in Jaitley’s attempts to provide a panacea for the demonetization troubles while at the same time steering clear of populism?

Good news first!

The Budgetary provision for Ministry of Human Resource and Development for 2017-18 is at Rs 79,686 crore, which is a 10% increase from the previous year. At 58%, a major share of the total Budget has been allocated for Department of School Education & Literacy and the remaining 42% for Department of Higher Education.


Positive transformations in the higher education sector are underway

“We have proposed to introduce a system of measuring annual learning outcomes in our schools. Emphasis will be given on science education and flexibility in curriculum to promote creativity through local innovative content,” the Finance Minister said in his speech.

With India having achieved near universal primary school enrolment, the Budget clearly showed signs of prioritization of the higher education sector. In the last seven years, Budget spending in the department of higher education has increased by over 63%. In this space, Jaitley also announced that reforms will be undertaken in the University Grants Commission of India.

The Prime Minister’s pet project Pradhan Mantri Kaushal Vikash Yojana – a major scheme for skill development, witnessed a 60% increase between Budget Estimates of 2016-17 and 2017-18.

Budget allocations to various departments under Ministry of Science & Technology and Ministry of Earth Science were raised too in the range of 7%-10% over last year. The Department of Biotechnology received an increase of nearly 16% over the previous Budget.

But even as an increase in funding is welcome, question arises whether the increase is sufficient and how much various schemes under the sector have progressed over the years. A Budget analysis by the Centre for Budget and Governance Accountability (CBGA) provides answers to some of these questions.

How does India compare with other countries in terms of spending on education?

According to the CBGA report, despite the increase in fund allocation to education over the years, its share remains stagnant at 3.7% of the total Union Budget. As a share of GDP, government spending on education in India at 3.8% remains lower than most of its peers including South Africa (6.4%), Brazil (5.9%) and Russia (4.2%), shows the World Bank data as of 2012.

What is perhaps more worrying, is that spending on education is also not a priority area for Indian households as well. The recently released Centre for Statistical Office (CSO) report on the first revised estimates of GDP for 2015-16, showed that Indians spent a mere 3.9% of their total private consumption expenditure on education. Food and beverages, housing, transport, clothing and footwear and health ranked higher than education as their priority spending areas. Sadly, the share of spending on education has shown no improvement over the last five years.

How have various schemes under education fared

The CBGA analysis shows that several of the schemes that were hailed under the previous Budget, were not given adequate resource support this year. Allocation for the mid-day meal scheme was increased by a meagre Rs. 300 crore to Rs 10,000 crore over the previous Budget. What is further concerning is that fund disbursal to the scheme has actually declined over the years.


Fund disbursal to the mid day meal scheme declined over the years.

The government had promised to set up 62 Navodaya Vidyalaya in uncovered districts in the country, but the financial support to the same has not kept pace, with a mere Rs 229 crore increase this year.

The gap between intent and actual allocation by the government is also seen in the case of the school assessment program which has been allocated a sum of Rs 67 lakh in the coming fiscal year as against Rs 5 crore in the current one. With the little increase under certain heads of the education sector, experts say it is a case of too little too late.

“The Budget does not make any major announcements for the education sector as a whole,” the CBGA report highlights, stating that the Budget speech overlooked any discussion on the financing of ‘Right to Education’ and elementary education despite concerns over poor learning levels in the country.

Where does the Sarva Shiksha Abhiyan stand?

The Sarva Shiksha Abhiyan (SSA) received Rs. 23,500 crore in this year’s Budget, an increase of Rs 1000 crore over the previous year. However, as per the CBGA analysis, this increase is insufficient to address the gaps in the finances of the Right to Education (RTE).

Data provided by the CBGA report shows that for the last six years, allocation of the Union government for SSA acutely falls short of the central share approved by MHRD based on the annual work plan and budgets prepared by the districts. “This clearly indicates that the Ministry of Finance has not been able to fulfil the commitments made by the MHRD,” the report states.

In fact, in 2017-18, budgetary allocation for SSA stood at 42.7% of the approved outlay by the MHRD. This comes right after a Parliamentary panel in December last year had asked the Centre to undertake initiatives under the scheme as while the enrolment picture had continued to improve, the story is far from satisfactory on the learning front.

India & Innovation

With India being one of the fastest growing economies in the world currently, priority areas in the field of education actually poses a dilemma. On the one hand, India is still battling with the third world country issues of poor learning levels, lack of proper infrastructure in schools and colleges, toilets for girls, etc in schools, while on the other hand, India is also one of the largest beneficiary of the H1B visas for jobs in IT sector in the US – stressing on the need for investment in innovation.

A Mint article last week showed that share of Indians in approved H1B petitions has been increasing over the last few years, but at the same time, dominance of workers with Bachelor’s degrees among H1B visa workers has grown.

The Global Innovation Index, released by the US Chambers of Commerce last week, ranked India at an abysmal 43 among 45 countries.

“Although India has made incremental progress, the government needs to build upon the positive rhetoric of its IPR policy with the substantial legislative reforms that innovators need,” a Hindustan Times article quoted the president and CEO of Global Intellectual Property Center (GIPC) as saying.

Clearly, the discussion on education and innovation in India needs to go beyond budgetary allocations. Target chasing of numbers for enrolment in schools or H1B visas will not provide a clear picture of the actual improvement taking place on the ground. Inclusivity of all the spheres of education is what is critical at the moment.