How Budget 2024-25 Has Failed Higher Education Sector

The Union Budget 2024-25 has garnered significant criticism for its handling of the higher education sector, failing to meet several key expectations despite promises of substantial funding and reforms. It falls short in several critical areas, failing to meet the growing demands and expectations of the sector.

Government expenditure on education as a percentage of GDP (gross domestic product) remains alarmingly low. The Economic Survey 2023-24 highlighted a mere 2.7% allocation, significantly below the National Education Policy or NEP 2020 recommendation of 6%. This underspending directly impacts the quality of education, with public institutions facing severe resource constraints. This article discusses the shortfalls, and the problems that can ensue as a result of these shortfalls and suggestions on how to improve.

The Union budget has marginally increased funding for higher education, but this rise is insufficient given the growing demands of the sector. According to PRS Legislative Research, total expenditure is estimated to increase by only 6.1%, with revenue expenditure expected to grow by just 3.2%. This limited increase fails to keep pace with inflation and the rising costs of educational infrastructure, faculty salaries, and research funding.

Despite the critical importance of research & development (R&D) in higher education, the budget has not made significant strides in this area. Experts have highlighted the need for enhanced research spending and greater ease of conducting research. Only three Indian universities feature among the top 200 globally, reflecting on the need for better academic standards and increased research funding. Without substantial investment, Indian institutions may struggle to compete internationally, potentially leading to a brain drain.

The budget also does not prioritise skill development programmes essential for bridging the gap between academic education and industry requirements. Though we see recommendations for ‘robust’ vocational training and skill development initiatives to enhance employability, the provisions fall short in this area. The Skill India Mission, although having trained 1.4 crore individuals, needs further support to align educational outcomes with market needs.

Also, the Union budget inadequately addresses the challenges of equitable access to higher education, especially for marginalised and economically disadvantaged groups. Scholarships, grants, and financial aid programmes have not seen significant enhancements, limiting opportunities for students from underprivileged backgrounds. Ensuring equal access to quality education is crucial for social mobility and reducing inequality, which the budget does not adequately support.

While there were promises of substantial administrative and regulatory reforms, the budget lacks concrete measures to achieve this. Streamlining regulatory frameworks, reducing bureaucratic red tape, and enhancing institutional autonomy are essential for the efficient functioning of higher education institutions.

The Union Budget 2024-25, therefore, outlines a vision for the higher education sector, but fails to deliver the necessary financial and policy support to realise this vision. The inadequate funding, neglect of R&D, lack of focus on skill development, equity issues, and absence of meaningful administrative reforms collectively undermine the sector's potential for growth and development. Addressing these shortcomings is imperative for India's higher education institutions to thrive and contribute significantly to the nation's socio-economic progress.

Although NEP 2020 itself has faced criticism on various fronts, including its ambitious targets and implementation challenges, it remains a policy framework established by the current government itself. Therefore, respecting its financial recommendations is crucial for consistency and credibility in policy implementation. By allocating funds as per NEP 2020’s recommendations, the government can ensure that the policy’s goals are met, addressing issues, such as vocational training, multilingual education, and early childhood education.

The Centre for Financial Accountability (CFA) emphasises that the budget allocation, despite being touted as the highest ever, still falls short of the necessary funding levels. This shortfall undermines efforts to improve infrastructure, faculty recruitment, and research capabilities within higher education institutions.

Inadequate allocation for higher education is a persisting. The budget allocated approximately Rs. 1.48 lakh crore for higher education, employment and skilling, out of which the department of higher education gets Rs 47,619.77 crore, which is less than 1% of the total value of the Rs 48.2 lakh crore budget. This allocation is insufficient to address the growing needs of the sector, including infrastructure development, research funding, and faculty recruitment. The CFA report criticises this allocation as inadequate to support meaningful growth and innovation in higher education.

Opening Doors to Privatisation

Increased investment in education is necessary for addressing the broader educational needs of the country. The current budget allocation fails to meet these needs, thereby stifling potential growth and innovation within the sector. Enhanced funding would enable the establishment of more research centres, improve digital infrastructure, and provide necessary support to marginalised communities, ensuring equitable access to quality education.

Having listed the inadequacies of the budget in this sector, there are several problems that can stem from government underspending on sectors as crucial as education (similar arguments can be framed in context of health), as it fosters an environment ripe for privatisation.

As public institutions struggle with limited resources, private entities step in, leading to increased educational inequality. Students from lower-income backgrounds are disproportionately affected, as they are less able to afford the high costs of private education.

Inadequate funding results in deteriorating infrastructure, insufficient teacher training, and outdated educational materials. This decline in quality drives more families toward private education, further exacerbating the divide between public and private institutions. As public education weakens, the poor and the vulnerable sections of the society (the women, weaker castes, the discriminated religions, and the poor in general) face educational inequalities that ensure that these sections are further pushed to the periphery. They are deprived of good, state-of-the-art education as it is too expensive for them and thus an asset only the rich can accumulate. The inequalities that were already there, widen, so much so that they cross over into the coming generations. Temporal inequality strengthens and becomes intergenerational inequality.

India’s education spending is significantly lower compared with other countries. For instance, the UK and the US spend approximately 5-6% of their GDP on education. This disparity highlights the urgent need for India to increase its budgetary allocation to meet global standards and improve its educational outcomes.

Govt Should Invest More in Higher Education

To address the critical issues facing the higher education sector highlighted by the Union Budget, the government should take care of the following; to begin with, government must significantly boost its investment in education to align with the NEP 2020's recommendation of allocating 6% of GDP to the sector. This increase is essential to address the systemic underfunding that has hampered the growth and development of educational institutions in India. It  would also enable better infrastructure, attract and retain qualified faculty, and support cutting-edge research initiatives.

Further, it is crucial to ensure that any additional funding is distributed equitably across public institutions to bridge the resource gap between well-established universities and smaller or regional institutions. Equitable distribution would ensure that all institutions, regardless of size or location, have access to the necessary resources to provide high-quality education.

Policies should be implemented to support underfunded institutions, particularly those serving marginalised and economically disadvantaged communities. This approach will promote inclusivity and ensure that every student has access to quality education, thereby reducing disparities within the education system.

Enhancing infrastructure is vital for creating an environment conducive to learning and research. The government should invest in modernising classrooms, laboratories, libraries, and digital infrastructure to keep pace with global standards. Teacher training programmes need significant enhancement to ensure educators are equipped with the latest pedagogical skills and subject knowledge.

To alleviate financial barriers to education, the government should enhance direct transfers to students and families. This could include scholarships, stipends, and other financial aid programmes targeted at marginalised and economically disadvantaged groups. Such transfers would help reduce dropout rates and ensure that more students can afford to pursue higher education. Implementing a robust system for direct benefit transfers (DBT) would ensure that financial aid reaches the intended beneficiaries promptly and efficiently. This system can be linked to students' educational milestones and performance, encouraging continued academic engagement and success.

The 2024 budget, despite its promises, falls short in delivering for the higher education sector. The inadequate funding, neglect of research and development, lack of focus on skill development, equity issues, and absence of meaningful administrative reforms collectively undermine the sector's potential for growth and development. Immediate and substantial reforms are crucial.

The government must significantly boost investment to align with NEP 2020's recommendations, ensure equitable distribution of resources, enhance infrastructure, provide continuous teacher training, and increase financial aid to marginalised students. By addressing these critical issues, India can build a robust education system that fosters innovation, inclusivity, and socio-economic progress. The time for decisive action is now to prevent further privatisation and inequality within the sector.

The writers are Associate Professors at the Zakir Husain Delhi College, University of Delhi. The views are personal.