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Budget 21-22: Much Left Unanswered

Against the backdrop of the NEP 2020, there were expectations of significant announcements in the Budget for the education sector

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Budget 2021 has raised many questions over the government’s plan for the education sector. At a time when a pandemic-stricken economy is trying to recover, and when students and teachers are looking forward to getting back to physical classrooms — the allocations seem simply adequate. 

The National Education Policy (NEP) has to be the main focus clearly — and expectedly so — in this year’s Budget since the policy was legislated last year. The NEP 2020 proposes to align the education system with global standards like bringing the 5+3+3+4 system instead of the prevailing 10+2 system, as well as promoting more multilingualism and flexibility in the courses. 

Given the grand nature of the pol­icy and the structural changes stated therein, the government was expected to make a huge allocation to ensure rapid implementation. NEP replaces the old National Policy of Education after 34 years. 

“In a year where the allocation to education should have been increased and many initiatives regarding NEP should have been funded adequately, the allocation has reduced,” says Naray­anan Ramaswamy, Partner and Sector Head – Education and Skill Develop­ment, KPMG in India. He adds, “In my view, this budget has not seized the opportunity to use this momentum to drive transformation. NEP implemen­tation required huge financial support and the budget has completely ignored it — save some bright spots which are few and far in between.” 

The budgetary allocation for the upcoming year for Samagra Shiksha Abhiyan (Rs 31,050 crore), the govern­ment’s flagship programme for school education, is much lower than last year (Rs 38,751 crore). The allocation for the Midday Meal Scheme has been increased by Rs 500 crore this year to Rs 11,500 crore; for central schools Kendriya Vidyalayas and Navodaya Vidyalayas, the allocation went up by Rs 1,284 crore and Rs 500 crore re­spectively. Overall, the total education budget took a hit by 6 per cent (Rs 6,087 crore) from Rs 99,311 crore (in 2020-21) to Rs 93,224 crore.

What could be the reason for such a significant cut? The obvious answer may be the pandemic itself. Last year, the World Bank predicted a decline in public sector funding as an impact of Covid-19. Budgetary cuts for education is not limited to India. 

Ukraine saw a 4.3 per cent cut in its education budget. In the US and Cana­da too, authorities have announced cuts in their education budgets including layoffs, reductions in staff recruitment, and salary cuts. Arguably, it is likely the Indian government had no choice but to go ahead with the cuts so as to allow maximum allocation for Covid-related expenditure (Rs 35,000 crore was al­lotted for Covid-19 vaccine).

Boost To Research

The government has been inclined towards improving the quality of the research ecosystem in the country. The National Research Foundation, intro­duced in the 2019 Union Budget, is to receive an outlay of Rs 50,000 crore in the next five years. In nine major cit­ies, the government will create formal “umbrella structures” to ensure better synergy among institutions, for which a “glue grant” will be set aside. 

The reason for the strong focus on research because of the recognition that the quality of research has been low perennially in India. In a paper published in the International Jour­nal of Multidisciplinary Research and Development (2015). titled “Problem of Research Quality in India”, common problems cited are lack of knowledge friendly environment and encourage­ment for research and development; scarcity of guides, lack of funds, etc. 

The public expenditure on R&D in India has been stagnant at 0.6-0.7 per cent of GDP over the past two decades. Developed economies have much high­er expenditures on research: US 2.8 per cent, China 2.1 per cent, Israel 4.3 per cent, and Korea 4.2 per cent. Given the overwhelming scale of challenges in the country’s research ecosystem, how this year’s measures will address those will be clear as the specifics of it come to light. 

The Case of Ed-tech 

The ed-tech sector in India has been booming so much that it has got the at­tention of everyone from investors to industry experts. In India, the ed-tech market received investments worth $1.5 billion in the first nine months of 2020, against $409 million in en­tire 2019 (Source: IBEF). However, it failed to get any attention of the gov­ernment, at least as is apparent from the Budget 2021. Ramaswamy says, “The pandemic gave much-needed ac­ceptability to digital education across content, delivery, assessment etc. and the government should have looked at leveraging this.” 

According to a study, India is home to over 3,500 ed-tech startups. last year’s $300 million buy of 18-month-old cod­ing startup WhiteHat Jr by Byju’s is a major development in the industry. The online education market is expected to reach $ 1.96 billion in 2021, as per stats by IBEF. 

Founded in 2004, Ampersand Group (combined revenue Rs 2,000 crore last year) has been working to­wards building modern preschool and K12 education systems in India. Rus­tom Kerawalla, Chairman, Ampersand Group stated that a lack of mention of the ed-tech space in the Budget 2021 has been a negative point for the edu­cation policy. As per him, the budget should have emphasised the use of technology (for the education sector) and more clarity was needed into the budget measures. 

On the other hand, many activ­ists and experts argue the decreased participation of the government for education could lead to more commer­cialisation, possibly harmful to the sec­tor. A statement released by Right To Education Forum says: “Government’s shrinking responsibility and meagre allocation will lead education towards adverse situation affecting the future of millions of children.” 

Maybe it is too early to clearly state whether the consequences would turn positive or negative. Ramaswamy says, “I suspect the government wants to adopt a similar approach that it had to the IT sector. Less interference and less regulation — which will allow the sector to grow on the strength of market con­ditions and global requirement. While we do believe this is a good approach, some specific patronage — particularly in school education — for ed-tech play­ers could have helped a long way.”

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Budget 2021-22 NEP 2020 Magazine 4 Feb 2021