Budget 2018

Barring expansion of loans for institutions, Budget 2018 is a non-starter for education, say experts

Government support for education up 3.8% over 2017-2018 revised estimates.

Presenting the Union Budget 2018-2019 on Thursday, Finance Minister Arun Jaitley announced a “Revitalising Infrastructure and Systems in Education” programme to create research infrastructure in higher education institutions. This was the most significant takeaway for the education sector in a Budget that some experts termed disappointing.

The Revitalising Infrastructure and Systems in Education, or RISE, initiative will receive a total investment of Rs 1 lakh crores over the next four years. This fund will not be in the form of a grant but will come from the Higher Education Financing Agency – a non-banking finance company that raises money from private sector investment and offers loans to educational institutions. Established jointly by the Ministry of Human Resource Development and Canara Bank in 2017, the agency gave loans worth over Rs 2,066 crores to six engineering institutions in December. Under the new programme, the borrowing institutions will pay the principal amount and the government will take care of the interest.

The government increased the budget for the Higher Education Finance Agency to Rs 2,750 crores in 2018-2019 from Rs 250 crores in 2017-2018 – a jump of 1,000%. In contrast, the department of higher education as a whole saw a small increase in funds while the budgets of several major institutions – including the Indian Institutes of Technology and the Central universities – were reduced.

For the rest, there was little change. The 3% education cess is being converted into a 4% “health and education cess”. This is expected to translate into a 76.1% increase in revenue, from Rs 28,081 crores this financial year to Rs 49,461 crores in the next. The total outlay for the Ministry of Human Resource Development stood at Rs 85,010.3 crores, an increase of 3.8%. One policy expert described the budget for schools as “a non-starter” despite the attention given to the sector in the Budget speech.

In allocations for education under other ministries, the budget of the Ministry of Minority Affairs for the education and empowerment of minorities rose from Rs 2,053.5 crores to Rs 2,453 crores.

(RE: Revised estimate; BE: Budget estimate)
(RE: Revised estimate; BE: Budget estimate)

Higher education

In his speech, Finance Minister Arun Jaitley announced plans to set up 24 new government medical colleges by upgrading existing district hospitals. “This would ensure there is at least one medical college for every three parliamentary constituencies and at least one government medical college in each state,” he said.

The government also proposed two new schools of planning and architecture and another 18 to function as “autonomous schools” within the Indian Institutes of Technology and National Institutes of Technology. These will be established “on challenge mode” – that is, institutions will bid for them.

However, the allocation to the Department of Higher Education under the head of new planning schools saw an increase of a rather modest Rs 100 crores – from a revised estimate of Rs 102 crores in 2017-2018 to Rs 202 crores.

Meanwhile, the budget of the Indian Institutes of Technology was reduced from a revised estimate of Rs 8,244.8 crores in 2017-2018 to Rs 6,326 crores.

The allocation to the University Grants Commission, the higher education regulator and funding body, was also brought down to Rs 4,722.7 crores from a revised estimate of Rs 4,922.7. Following this downward trend, Central universities will get Rs 6,445.2 crores in grants, significantly lower than Rs 7,261.4 crores in 2017-2018.

And despite the emphasis on technology in education, allocation to the e-Learning project under the Digital India Programme for higher education was bought down to Rs 456 crores from Rs 518 crores.

The Budget reduced the allocation for the Indian Institutes of Education. (Credit: HT)
The Budget reduced the allocation for the Indian Institutes of Education. (Credit: HT)

School education

The Centre’s two major schemes supporting school education saw an increase in allocations. The Sarva Shiksha Abhiyan for elementary education (Classes 1 to 8) received Rs 26,128.8 crores, up Rs 2,628.8 crores. And the Rashtriya Madhyamik Shikha Abhiyan for secondary education (Classes 9 and 10) saw a nominal increase from Rs 3,914.9 crores (revised estimate) in 2017-2018 to Rs 4,213 crores.

While the 11.2% increase in funding for the Sarva Shiksha Abhiyan is better than for most other schemes, Sukanya Bose of the National Institute of Public Finance and Policy said a number of factors must be considered while assessing this allocation. “The government has claimed the revenue growth rate has increased,” she explained. “Increase in revenue is expected from the rise in education cess as well. Then, in his speech the minister mentioned there are 13 lakh untrained teachers. Considering these factors, we had expected a higher allocation. There is no point lamenting about quality till the entire system is fixed and the basic inputs mandated by the Right to Education Act are in place. From our research, we have found that Bihar alone needs over Rs 30,000 crores to meet the norms set out in the Act. It is a disappointing budget.”

One significant announcement for school education in the Budget was the expansion of the network of Eklavya Model Residential Schools for Scheduled Tribe students in rural areas. The government plans to have one such school in every block where half of the population is Adivasi or tribal by 2022. These schools are funded by a general project-based grant from the Ministry of Tribal Affairs. The allocation for “grants under proviso to Article 275(1) of the Constitution” has gone up from Rs 1,500 crores to Rs 1,800 crores, but the increase will cover a range of projects, not just schools.

“This budget is a non-starter,” declared Kiran Bhatty, who studies education and governance policy at the Centre for Policy Research. “Compared to his speech [in 2017], [the finance minister] did give education a fair amount of importance but his announcement and the Budget documents do not match. These increases, any rise in demand and inflation will mop up.”

The Mid-day Meal Scheme, which provides hot lunches to over 100 million children in government-run schools, received just 5% more.

The Madan Mohan Malviya National Mission on Teachers and Teaching received an allocation of Rs 120 crores – the same amount as in the last Budget, though that was later revised to Rs 100 crores. The Centrally-funded Kendriya Vidyalayas and resident Navodaya Vidyalayas both saw a reduction in funds. The former received Rs 4,425 crores and the latter Rs 2,793 crores, down from Rs 4,600.5 crores and Rs 3,025 crores (revised estimates) in the previous Budget.

Fellowship for engineers

The Budget allocated Rs 75 crores for the Prime Minister’s Research Fellows Scheme – the same amount earmarked in 2017-2018 but which is yet to be spent as the programme has not been operationalised. The scheme will send 1,000 of the country’s “best BTech students”, or engineers, to the Indian Institutes of Technology and Indian Institute of Science for research with the expectation that they will “voluntarily commit few hours every week for teaching in higher educational institutions”.

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