Finance Minister Piyush Goyal will be presenting the upcoming 2019 budget, which will be the last Union Budget before the 2019 Lok Sabha General Elections. Almost every sector has some or the expectation from the forthcoming budget, which is expected to be a populist budget as the Modi-led NDA Government seeks a second term in the 2019 General Elections. Undoubtedly, the upcoming budget will be important for each sector and industry; the Indian education sector has its sights set on what the upcoming budget has in offer for them.
The 2018 Budget witnessed an overall allocation of Rs. 85010 crore for the education sector. The education sector is expecting a significant hike in this year’s annual budget taking into account the flagship project of the Modi Government, “Sabko Shiksha Acchi Shiska” (Quality Education for all). The expectations of the education sector will be quite interesting from the 2019 election budget.
Based upon recommendations of prevailing education schemes, recent government decisions and recommendations of the Federation of Indian Chambers of Commerce and Industry, the Indian education sector is expecting the following announcements by the Finance Minister during this year’s election budget.
Allocation of Budget:
In the 2018 Union Budget, Rs. 85010 crore was allotted to the Indian education sector, which was a mere 3.5% of the total budget. The Union Cabinet has recently passed the additional 10 percent reservation for the economically backward and weaker sections of the society within the general category irrespective of their region, caste, creed etc. Further, the Human Resource Development Ministry is considering increasing 10 lakhs seats in higher educational institutions towards ensuring that the additional quota does not affect the additional number of seats within the General Category.
Experts in the education sector are expecting a budget allocation of more than Rs. 93,000 crore towards accommodating the additional 10 percent additional quota and the increase of additional 10 lakh seats. With the expectation of a populist budget, it is expected that announcements will be made for opening new higher education institutions such as IIM and IIT in various States towards appeasing allies.
Incorporation of Technology in the Education Sector:
In the previous budget, the then Finance Minister, Arun Jaitley emphasized how crucial it is to improve and upgrade the technological infrastructure within educational institutions in India towards enhancing the learning experience of the students and preparing them for future jobs. The Indian education sector is expecting Finance Minister Piyush Goyal to further stresses on the incorporation of technology within the education sector and allocate appropriate budget towards the same. Furthermore, according to a suggestion made by the Federation of Indian Chambers of Commerce and Industry or the FICCI, the Government needs to allocate a budget of Rs. 10,000 crore towards smart handheld devices for teachers and students free of cost.
Creation of Scholarship Programs:
There is a requirement of substantially increasing scholarship programs across the country towards ensuring each student whose annual household income is less than Rs. 5 lakhs, can secure admission in institutions of higher education, giving them an equal opportunity to grow in their careers. The Federation of Indian Chambers of Commerce and Industry has recommended an allocation of Rs. 1000 crore over a period of 3-years in its recommendations for the 2019 Annual Budget. This amount needs to the utilized to create 50 lakhs scholarships of Rs. 20000/-. This will ensure that financial constraints and limitations will not act as a hindrance for students while trying to secure admission in the institution of higher education across the country.
State Policy Reform Fund:
The Federation of Indian Chambers of Commerce and Industry has made recommendations that the 2019 election budget needs to make provision for the ‘State Policy Reform Fund’ and make an allocation of about Rs. 1000 crore towards this fund. The intention of creating the State Policy Reform Fund is towards providing an incentive to States which carry out a selection of teachers, headmasters and other school staff by merit by following transparent recruitment, transfer, and promotions process.
Reconsider GST Rates in Education:
On several instances, Shiv Prasad Shukla, the Minister of State for Finance has stated that the Government is open to considering reducing the rate of GST or the Goods and Service Tax on several components within the education sector. A joint report released by StratFirst and Assocham advocates the reduction of overall cost for both educational institutions and students.
Most education institutes outsource services such as admissions and transportation towards focusing on providing quality education. These outsource services are taxable under the GST, here increasing the cost of education. The report proposes to partially exemption these outsourced services with a lowering of GST rates to 5 percent from the existing rate of 18 percent. This will aid in creating low-cost educational institutions which can offer quality education services at economical cost across all levels, i.e. the primary, secondary and higher education.
Tax Exemption on Digital Education:
The Government should consider a 100 percent tax exemption of digital educational products and services, which will be in line with Prime Minister Narendra Modi’s flagship scheme of ‘Digital India’. This tax exemption will aid in early introduction of digital educational products and solution in schools. According to the 2011 census, almost one-fourth of India’s population is between the age group of 5 to 14 years, hence early seeding of digital products, services and devices will be an investment in the country’s future. A tax on digital services and products will further encourage schools and educational institutions, and also parents in investing in learner-centric technologies.
Allocation towards Improving Quality of Education:
According to the Annual Status of Education Report 2018, Almost half the 5th Standard students from rural India cannot read at a 2nd standard level, and almost 70% of these students lack mathematical skills and cannot do simple division. These standards have declined over the past decade, indicating the importance of investing in the education sector and increasing the standard of education across all levels across the country.
Speaking about the quality of higher education in India, for decades, Indian university has been faring poorly on the global university rankings with not a single Indian university among the top-200 universities and only a few universities featuring in the top-500 list. Though India has improved its rankings in the emerging economies with the representation of Indian universities has increased from 42 to 49 in the latest Times Higher Education (THE) Emerging Economies University Rankings, Indian institutions were quite behind regarding international outlook when compared to the global average.
Improving Standards to Education:
India has surpassed the BRICS nations and many South Asian countries in its education expenditure and has allocated 4.38% of its GDP towards education, which is higher than China, Russia, and many other South Asian countries.
However, India fares poorly in terms of quality and has the second lowest score for quality in education in the South Asian region in 2018. Indian also has the second lowest score in terms of quality of education among the BRICS nation.
To conclude, experts within the education sector hope that the Government spares the education sector from populist schemes and instead focus in improving the quality and reach of education in the country and invest in our future.