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Budget Expectations: Education Sector Wants Higher Fund Allocation

Unfortunately, the fund allocation for the initiatives or policies related to education in the last two years has not been sufficient as the Health sector needed more attention.

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For the last two years, the country has been battling the wrath of a pandemic and as a result of this unprecedented incident, our general economy has been hit severely. Needless to say, this period has been extremely difficult for the education sector as the entire operations and infrastructural requirements for knowledge delivery underwent a 180-degree transformation. 

Unfortunately, the fund allocation for the initiatives or policies related to education in the last two years has not been sufficient as the Health sector needed more attention.

Additionally, many private schools were barred from asking for school fees to lighten the burden of the parents, especially those who have lost their jobs due to the economic slowdown. As a result, several schools were compelled to close due to lack of funds and the other took a bad hit on their savings, piling on to the heap were the government-supported school which too were obligated to shut down due to a lack of suitable equipment, network problems, and a lack of resources to continue online education. This led to the discontinuity of education for millions of children of economically vulnerable families. Despite this unfavourable situation, many private school trusts decided to extend a helping hand to the parents with financial support through EMI options for tuition, scholarships for poor children, exemption from fees for extracurricular activities, transport, meals, and meals. At the same time, they have to invest a lot in improving their e-learning learning infrastructure, training teachers to adapt to new techniques, and thus paying their staff. 

Our honourable Finance Minister Ms. Nirmala Sitharaman will announce the Union Budget for this year on 1st February and various new initiatives and fund allocation from the Central Govt for each sector will be locked for the next financial year. Hence, educationists and edupreneurs are hoping for decent cogitation from the Govt. and expecting the Govt. will allocate a sizable fraction of total GDP to the education sector to compensate for the last two years. 

As a private player I would like to request the Govt. to consider the following points to ease our burden and support us to continue our service in nurturing young minds: 

#1 Include Educational Institutions in Priority Lending 

Due to limitations in fund availability, schools needed to take loans from the banks. However, since schools are tagged as "not for profit", banks are often reluctant to provide loans to school authorities, and even if they do the interest rates are quite high. Inclusion of schools and other education institutions into priority lending categories will give the required assurance to the bank of reimbursement of the money as any other sector. Also, lowering the interest rates will in turn help the school trustees to function smoothly during these hard times. 

# 2 Exemption of GST on School Rental Properties

A heavy percentile of a school’s finances goes into keeping the physical properties. Now, in India, due to the high cost of land, most school trusts have long-term leases to a third party and pay rent for a predetermined period. In case one doesn't have land on lease, the rent is taxed by the GST and school administrators have to pay this GST to landowners. Unlike other industries, schools cannot claim credit, such as the fees they charge their students other than GST, which automatically increases the school's expenses.

#3 RTE Reimbursement

Lastly, the RTE fee is a state entity. However, due to a lack of funds, school authorities in the state coffers have to wait indefinitely for RTE payments, which can sometimes become bad debts. Given the COVID situation, the contemplation of the central government to set aside special state support funds for RTE payments would lend a helping hand to the schools in preventing the collapse of funding.

The author is the Founder & CEO at K12 Techno Services

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Jai Decosta

The author is Founder & CEO at K12 Techno Services

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