Budget 2022: Education Sector Takeaways

The last two years have impacted not just the Indian economy but the global economy as well. It was no surprise that the Union Budget 2022 focused on capital and infrastructural spending in order to boost economic recovery. However, everyone is surprised at the lack of focus on education, a sector that influences almost every other sector in the economy. With some hits and misses, the expectations of the industry have largely remained unattended.

The Union Budget set asides ₹1.04 lakh crore for education, an increase of around ₹11,000 crore, or 11.86%, from what was pegged in 2021-22. While the 2021-22 budget estimate allocated ₹93,224.31 crore for the sector, the revised estimates curtailed it to ₹88,00.52 crore. Across the spectrum of education spanning K12, Higher Ed and even Vocational & Skill Development, the budgetary allocations have come up short and are not completely aligned to the New Education Policy 2020 that was aimed at re-shaping the face of education in the near future.

Budget Provisions for K12 Schooling:

    1. Expansion of One Class One TV Channel initiative under the PM e-Vidya scheme to 200 channels from the existing 20. Despite the push in digital education, allocation under the digital India e-learning programme, which includes the PM e-Vidya scheme, was lowered to ₹421.01 crore for 2022-23 from ₹645.61 crore in the last financial year. The revised estimate of the programme in 2021-22 was pegged at ₹367.51 crore, lower than initially allocated.
    2. Allocation for central schools such as Kendriya Vidyalayas and Navodaya Vidyalayas increased by ₹850 crore and ₹315 crore, respectively. The budget allocation for the National Council of Educational Research and Training (NCERT) was increased by ₹10 crore from last year.
    3. A bulk of the outlay for schools (₹37,383 cr) will be spent on the Samagra Shiksha Abhiyan, the central government’s flagship programme for universal education. Last year, ₹31,050 crore was allocated for the scheme.

Higher Education & Beyond:

    1. In higher education, the allocation of grants to central universities has risen to ₹9,420.00 crore from ₹7,643.26 crore last year. Monetary support to the Indian Institutes of Technology has increased by ₹658.9 crore and to Indian Institutes of Managements by ₹177.9 crore in 2022-23, in comparison to last year.
    2. The allocation for Higher Education Funding Agency has been drastically trimmed to ₹1 lakh from ₹1 crore in 2021-22. The revised allocation for 2021-22 was also ₹1 lakh. HEFA offers 10-year loans to higher education institutions for infrastructure development.
    3. The outlay for research and innovation has been pegged at ₹218.66 crore in 2022-23 in comparison to ₹237.40 crore last year. The revised allocation decreased to ₹144.41 crore in 2021-22.
    4. Digital Ecosystem for Skilling and Livelihood—the DESH Stack e-portal to skill, reskill, and upskill citizens through online training.
    5. Establishment of a digital university under a hub-spoke model with other leading institutions.

While some of the provisions made are meaningful. But, it seems that the industry as a whole expected some provisions that could have helped the s students and the education provider some respites from the challenges faced due to outbreak of the pandemic.

COVID-19 & State of Education:

The pandemic has had a terrible effect on schooling, mental health, and adolescent prospects, especially the thorny problem of unemployment. The country’s youth continue to be burdened by high levels of unemployment and educational disparity. The Economic Survey cited the Annual Status of Education Report (ASER) 2021 as evidence of the widening digital gap, with more than half of pupils (53.8 percent) unable to utilize their mobile devices for educational purposes.

The ASER report also highlights the negative influence on young children’s school enrollment. According to the research, the percentage of children aged 6 to 14 who are “not currently enrolled in school” climbed from 2.5 percent in 2018 to 4.6 percent in 2021. Many surveys, including the one conducted by ASER, have revealed how children, particularly in rural areas, transitioned from private to public schools for a variety of reasons, including the closure of low-cost private schools, financial hardship faced by parents, and families returning to villages.

Despite the fact that the Economic Survey recognizes that public schools require additional support in terms of teacher-to-student ratios, classroom space, and teaching/learning materials to absorb students migrating from private schools and from urban to rural areas, the budget makes little provision for this.

The pandemic has highlighted the need for more teachers, better infrastructure, and more classrooms to ensure that learning in rural areas, where digital resources are scarce, is not disrupted even if a pandemic strikes again; however, budgetary allocation for teacher training and adult education has been drastically reduced from Rs 250 crore in 2021-22 to Rs 127 crore in 2022-23.

Expert Opinion on Budget 2022 alignment with goals of National Education Policy 2020

The NEP 2020, which was just launched with great hoopla, argued for allocating 6% of GDP to education. However, in this year’s budget, it was reduced to less than 2%. Although the education budget has surpassed the 1 lakh crore mark, it has been declining as a percentage of total expenditure.

Experts also suggest that that because of its one-way communication strategy, television can be a good source of information in places where individualized digital gadgets have not yet arrived, but it does not have the ability to improve learning quality. The topic of mitigating the learning loss that occurred in the previous two years is virtually ignored in this budget. As a result of Covid, a void has been created, and televisions will not be able to take centre stage until the schools reopen.

The lack of announcements on financing higher education and research, the Higher Education Commission of India Bill, etc, indicate that some of the important elements of the National Education Policy have been missed out in Budget considerations.

Furthermore, students in general anticipated a reduction in the interest rate on education loans. Many students and their families are suffering from severe financial constraints as a result of the pandemic. There was no such announcement in the budget speech.

Even when students have Internet connection, the quality of online education remains poor. We must weigh our fiscal commitments against the ambitions of the Indian people. High-quality education is both a critical component of what young people aspire to and one of the most successful economic investments. As a result, the government should seriously consider expanding public education investments.

There has been a constant noise around how a plenty of people had to live off their savings due to low or no income during the period of lockdowns. When a person is forced to do so the first reaction is to cut down on expenditures. With schools working online parents don’t feel like paying for facilities the kids are not using. If parents don’t pay up how can a school which works on thinner margins expect to pay for its teaching staff and other employees.

The budget didn’t consider the real-world challenges being faced by schools. One instance where the government could have really helped them is by foregoing or reducing GST paid on lease rentals by school operators to the landowners. Most schools operate out of leased lands as owning the land and building is a significant strain on revenue and profitability.

In this regard, Eduvisors works on policy design and implementation to benefit all the stakeholders involved in the education ecosystem with efficient scenario analysis and targeted testing of hypothesis to produce long term sustainable results.

We look forward to being your expert advisor in Education