• HOME»
  • Opinion»
  • Budget 2025: Ignoring the Need for Higher Education Investment

Budget 2025: Ignoring the Need for Higher Education Investment

Finance Minister Nirmala Sitharaman presented the Union Budget for 2025, emphasizing the need to accelerate growth and ensure inclusive development to realize the aspirations of a “Viksit Bharat.” To lay the foundation for a prosperous nation, the government must make substantial investments in human resources, focusing on education and skill development for the workforce. While […]

Advertisement
Budget 2025: Ignoring the Need for Higher Education Investment

Finance Minister Nirmala Sitharaman presented the Union Budget for 2025, emphasizing the need to accelerate growth and ensure inclusive development to realize the aspirations of a “Viksit Bharat.” To lay the foundation for a prosperous nation, the government must make substantial investments in human resources, focusing on education and skill development for the workforce. While the announcement to establish National Centres of Excellence for skilling and a Centre of Excellence in Artificial Intelligence (AI) for education is a positive step, the Union Budget largely overlooks the critical issues facing higher education.

The FM has allocated Rs. 1.28 lakh crore to the education sector for this year, up from Rs. 1.20 lakh crore last year. However, as in previous years, the budget primarily focuses on primary and school education. Of the total allocation to the Ministry of Education, Rs. 78,572 crore has been earmarked for school education, while only Rs. 50,000 crore is allocated for higher education. This represents a reduction from the Rs. 55,000 crore spent on higher education in 2023-24. Last year, funding for the Department of Higher Education was reduced by 17%, with the University Grants Commission (UGC) seeing a significant 61% decrease in funding.

While funding for school education is crucial, it’s important to recognize that significant progress has been made in this area. The National Education Policy (NEP) 2020 aims for 100% enrollment across all levels of school education. According to the Unified District Information System for Education Plus 2021-22 (UDISE+), primary education has already achieved 100% enrollment. However, enrollment drops as we move to higher levels, with only 58% enrollment in higher secondary education. Additionally, NEP 2020 recommends a pupil-teacher ratio (PTR) of 30:1, a target that has been met across all school education levels, as per UDISE+ 2021-22. Despite ongoing challenges such as improving teaching quality, India has made notable strides toward achieving key educational goals in recent years.

The FM has allocated Rs. 1.28 lakh crore to the education sector for this year, up from Rs. 1.20 lakh crore last year. However, as in previous years, the budget primarily focuses on primary and school education. Of the total allocation to the Ministry of Education, Rs. 78,572 crore has been earmarked for school education, while only Rs. 50,000 crore is allocated for higher education.

In contrast, the situation is less favorable in the higher education sector. The National Education Policy (NEP) aims to achieve a Gross Enrollment Ratio (GER) of 50% in higher education by 2035. As of 2021-22, India’s GER stood at just 28.5%. A key factor contributing to this low enrollment rate is the inadequate availability of scholarships to support students pursuing higher education. The allocation for student financial aid has been decreasing in recent years, further hindering access to education. The Standing Committee on Education, Women, Children, Youth, and Sports (2022) recommended that the ministry revise the funding and coverage of scholarship schemes, calling for an increase in the number of scholarships available to students.

The same committee also highlighted the ideal pupil-teacher ratio (PTR) for higher education should be 15:1. Currently, the PTR in regular mode is 23:1, with some states facing much worse ratios—such as Bihar (64:1), Jharkhand (54:1), and Uttar Pradesh (35:1). This discrepancy is largely due to a significant number of vacant faculty positions at both state and central universities, as well as government colleges. Approximately 30% of faculty positions in centrally funded institutions remain unfilled, exacerbating the issue.

Globally, higher education institutions play a crucial role in research and development (R&D). However, R&D has not been a significant focus in India’s Union Budget, with allocations for this sector never reaching even 1% of the GDP. In contrast, many other countries have made substantial investments in R&D. For instance, South Korea allocates 4.8% of its GDP to R&D, the USA 3.5%, Japan 3.3%, Germany 3.1%, and China 2.2%. In India, the spending on health research was just 0.02% of the GDP in 2021-22, far behind the US (0.65%) and the UK (0.44%). The Standing Committee on Health and Family Welfare (2023) recommended that the medical research budget be increased to 0.1% of the GDP.

Moreover, Indian universities contribute only 9% of the total research expenditure, compared to 39% in Canada and 36% in Australia. Unlike universities in other countries, which are central to generating high-quality research, Indian universities are primarily focused on teaching, with limited involvement in advancing research initiatives. This lack of investment in university-led research hampers the potential for innovation and development in the country.

For India to achieve its vision of becoming a “Viksit Bharat” by 2047, it is crucial to prioritize higher education and significantly invest in research and development. Universities should be positioned at the heart of R&D efforts, with a strong emphasis on fostering industry-academia collaborations. To boost enrollment rates, the government must increase scholarship amounts and expand the coverage of these schemes. Additionally, the budget allocation for student financial aid needs to be significantly enhanced.

As India aims to supply a global workforce, substantial investments must be made in providing world-class skills and vocational training to the youth. The government must also address the existing digital divide by improving digital infrastructure, in alignment with the goals of the National Education Policy (NEP) 2020. Filling vacant faculty positions across higher education institutions and implementing comprehensive teacher training programs are essential for effective NEP 2020 implementation.

Furthermore, the government should encourage states to boost their spending on higher education, possibly by offering interest-free loans or incentives to increase investment. Strengthening the higher education ecosystem will help build a highly skilled workforce, which will, in turn, accelerate economic growth and bring India closer to realizing its goal of a developed nation by 2047.

Dr. Abhishek Malhotra is an Assistant Professor in the Department of Economics, Sri Venkateswara College, University of Delhi.

Tags:

Budget 2025