industry

Budget 2023: Education gets 'highest ever' allocation; share in GDP remains stagnant at 2.9%


The outlay for the education sector in the budget is looking up – increasing to ₹1,12,899.47 crore for the next fiscal year from ₹1,04,277.72 crore for fiscal 2023.

Education minister Dharmendra Pradhan tweeted that the “highest ever allocation” to the education sector would pave the way to transform India into a “knowledge-based economy”.

The school education department, as usual, has got the higher share from the education kitty at Rs 68,804.85 crore, with a big push to the PM Poshan scheme which has subsumed the mid-day meal plan. The higher education segment got ₹44,904.62 crore, which will increase the funding to several central institutes save the IIMs where self-sufficiency is being advocated.

However, the big picture – in terms of education’s overall share in the pie – shows that the larger goals are still distant.
Overall expenditure on social services (as a percentage of GDP) was higher, from 6.6% in 2015-16 to 8.3% as per the budget estimate for FY23, but it was driven largely by the pump up in the health sector, especially after the pandemic.

The Economic Survey 2022-23, released this week, shows that while student enrolment is higher, school-level infrastructure is better and there are more teachers to boot, the total expenditure (combined states and Centre) on education as a percentage of GDP had stayed stagnant at 2.9% since 2019, and is only marginally up from 2.8% in FY16.

As a percentage of total expenditure, it was down from 10.4% in FY16 to 9.5% in the budget estimate for the ongoing FY23. Within social services, it reduced from 42.8% in FY16 to an estimated 35.5% in 2022-23.Several policy prescriptions on education, including the new National Education Policy 2020, have reiterated the need to push up public investment in the sector to 6% of GDP.

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Government insiders claim that a lot of funding stagnation was due to less-than-satisfactory spending in many schemes. Utilisation of allocated funds is now tied to fresh allocations under the new Single Nodal Account requirement for centrally sponsored schemes and that has held back spending.

The new budget, however, has seen one major new announcement on the education front: setting up of three centres of excellence for artificial intelligence at top educational institutions.

“Leading industry players will partner in conducting interdisciplinary research, develop cutting-edge applications and scalable problem solutions in the areas of agriculture, health and sustainable cities. This will galvanise an effective AI ecosystem and nurture quality human resources in the field,” announced the finance minister.

The education ministry said given the important role of AI across areas, the centres of excellence concept will also help premier educational institutions transform research to cutting-edge technology and replicate it to scalable problem solving for a country of our size and diversity.

The proposed 100 labs in engineering institutions on 5G-related applications will also provide a fillip to employment, startups, businesses and promote innovation & entrepreneurship in young engineers, an education ministry statement said.

The larger governmental focus, however, is on the key aspects of the new National Education Policy.

Accordingly, a national digital library for children and adolescents is proposed, to allow children to access device-agnostic reading material across genres and levels. The digital library apart, the government has said it would encourage states to set up physical libraries at panchayat and ward levels.

The National Book Trust, Children’s Book Trust and other sources will bring in books in both English and regional languages at these physical libraries and collaborate with NGOs for the same. Financial sector regulators will be requested to pitch in with age-appropriate reading material on financial literacy.

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The finance minister has further announced that teachers’ training would be “re-envisioned through innovative pedagogy, curriculum transaction, continuous professional development, dipstick surveys and ICT implementation”.

For the purpose, the district institutes of education and training will be developed as vibrant institutes of excellence.



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