The government’s proposed spending on education next year has been cut by Rs 6,000 crore at a time when the Covid-19-induced disruption is expected to have exacerbated students’ learning loss and school dropout rates.
The total education budget was slashed by 6 per cent from Rs 99,311 crore in 2020-21 to Rs 93,224 crore — the lowest in three years — with school education taking the biggest cut of almost Rs 5,000 crore. The allocation for higher education has decreased by roughly Rs 1,000 crore to Rs 38,350 crore this year.
The reduced spending also comes in the year when the Ministry of Education will start implementing the new National Education Policy (NEP) that strongly advocates increasing government expenditure on education.
Under school education, the Finance Ministry has allocated Rs 31,050 crore for Samagra Shiksha Abhiyan as opposed to Rs 38,750 crore last year. However, the government has increased its spending on the Midday Meal Scheme by Rs 500 crore this year to Rs 11,500 crore. Allocation for central schools such as Kendriya Vidyalayas and Navodaya Vidyalayas also rose by Rs 1,284 crore and Rs 500 crore, respectively. That apart, the government announced the establishment of 100 new Sainik Schools in partnership with NGOs, private schools and state governments.
Although educational institutions were closed for at least six months since the onset of the pandemic, Finance Minister Nirmala Sitharaman’s speech had no announcements on either recovering learning loss or re-enrolment campaigns or 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), rendering it defunct for all practical purposes. Only Rs 1 crore has been allocated to the agency this year — a sharp drop from Rs 2,100 crore in 2020-21.
Funding crucial to minimise learning losses
The reduction in education budget isn’t entirely surprising given that the World Bank, in a report in May 2020, predicted that low to middle income countries may cut spending on education to make space for the required spending on health and social protection. The report also pointed out that additional funding is crucial for institutions now “to implement new health and safety requirements, undertake the outreach activities needed to persuade students to return”.
HEFA, which was announced by late Finance Minister Arun Jaitley in his budget speech of 2016 and incorporated in 2017, is meant to mobilise funds from the market and offer 10-year loans to central educational institutions (CEIs) for infrastructure development. In 2018, the government discontinued budget grants to expand CEIs and instead moved all infrastructure financing to HEFA.
However, now the government has gone back to giving grant-in-aid for infrastructure development this year. This comes months after the Finance Ministry barred CEIs from borrowing from HEFA because it hasn’t been able to leverage the government’s equity to raise more money from the market and has only taken commercial loans from State Bank of India worth Rs 2,000 crore.
That apart, some earlier budget announcements were announced yet again by Sitharaman on Monday. These include establishing an overarching higher education regulator called the Higher Education Commission of India (HECI) and the National Research Foundation (NRF), both of which were mentioned two years ago in the 2019-20 Budget. On Monday, she announced an outlay of Rs 50,000 crore over five years for NRF, which is supposed to fund, coordinate and promote research in the country.
Among the initiatives announced as part of the first year of NEP implementation was setting up the Academic Bank of Credit (ABC). In this repository, students’ academic credits — calculated on the basis of classwork and tutorials — will be stored. An allocation of Rs 50 crore has been made for this purpose.
The Finance Minister also proposed creating an umbrella structure that would promote synergy between centrally funded institutions in nine cities. “The nine hubs of HEIs announced by FM in the budget will definitely bring multidisciplinarity and more synergy amongst institutions of MoE and research institutions of DST, DBT and CSIR,” Higher Education Secretary Amit Khare said. He said the ministry will introduce a Bill for setting up a Central University in Ladakh, as announced by Sitharaman, in the next half of the Budget session.