Education Budget Reforms and Expectations 2024: India

Budget with woman using her smartphone on a couch

By Kadambari Rana


Determining an Ideal Budget

Ministry of Education, Government of India, ‘’ The Constitution (Eighty-sixth Amendment) Act, 2002 inserted Article 21-A in the Constitution of India to provide free and compulsory education of all children in the age group of six to fourteen years as a Fundamental Right in such a manner as the State may, by law, determine.

The Right of Children to Free and Compulsory Education (RTE) Act, 2009, which represents the consequential legislation envisaged under Article 21-A, means that every child has a right to full time elementary education of satisfactory and equitable quality in a formal school which satisfies certain essential norms and standards.’’ While the mandate, on education being a fundamental right available to all citizens of India, is clear but that on education budget is not.

The constitution of India does not make any specific mention of education expenditure. Currently India is hovering around a 2.9% or 2.8% of the Gross Domestic Product (GDP) on education expenditure. Considering global trends and expert inputs, India should attempt to move towards a 6% of the GDP mark and aim to reach a healthy 10% of GDP mark, sooner rather than later.

National budget is what the government proposes to spend and a government can only spend what it is able to tax, earn, borrow, or print. Budget estimates are usually a small percentage of the country’s GDP. While GDP is not considered a great index for measuring social welfare since it fails to consider parameters such as quality of life, health, general happiness, life expectancy and years of schooling, yet it is the most acceptable and widely used measure of a country’s economic progress.


Determining an ideal budget for education is an arduous task as it depends on several feasibility factors such as the ongoing GDP of the nation, attitude of the nation towards education as a primary need, past trajectory of education budgets, the aspirations of the people of the country, vision of the government, global education standards and expectations, pending commitments towards other sectors, economic forecasts, and foresight of educationists.

Internal and external turbulences such as wars with other nations, natural disasters and pandemics tend to shift the country’s funds towards medical care, physical safety, and geographical protection. Industrialization and infrastructure development needs of a developing nation leaves less to be spent on education capacity building and quality, unless and until mandated and put on the high priority list.


In India, insufficient, inefficient and ineffective budget allocation and implementation is holding back the intended recipients from relishing their promised rights.  Resources are often re-directed towards regressive tendencies, invention of new schemes and management of the bureaucracy rather than being directed towards active ground work like development of schools and comprehensive training of teachers. Consequently, a lot, of even the meagrely allocated budget is lost in transit. It is essential that India addresses these deterrents, makes a leap towards increasing the education budget and de-centralizes the problem with a minimum mandatory allocation of the state’s revenue towards education every year.


Expenditure On Education As A Percentage Of The GDP: Global Trends

As per the World Bank data document titled government expenditure on education, total percentage of GDP, some of the neighbouring countries of India stood at; Bhutan 8.1% of GDP in 2022, Nepal 3.6% of GDP in 2022, China 3.3% of GDP in 2021, Pakistan 2.0% of GDP in 2022 and Sri Lanka at 1.2% of GDP in 2021.

Most developed nations stood closer to 6 % of GDP mark at; United States at 5.4% of GDP in 2020, United Kingdom at 5.3% of GDP in 2021, France 5.2% of GDP in 2021, New Zealand at 5.5% in 2021, Finland 5.7% of GDP in 2021, Denmark 6% of GDP in 2021, South Africa at 6.2% of GDP in 2022, Sweden 6.7% of GDP in 2021.


Tenets of an Ideal Indian Education Budget

A modern India education budget is expected to meet the tenets of quality, sufficiency, equitability, transparency, competitiveness, relevance, and effectiveness. Considering changing trends in education, expenditures need to support the Information Communication Technology (ICT) training and implementation vision of India, strengthening of the digital infrastructure, physical infrastructure improvements in schools, building of special needs facilities, skills building, teacher training, research based higher education, development of world class science laboratories, libraries, and knowledge banks. Ideally, budgetary support should also be extended towards those sectors which support the education sector, such as the communications and transport sectors.

Quality education for all, gives birth to a positive cycle of serve and return; the nation provides quality education to its people and then these people lead the nation towards inventions, advancements and economic development.

Improved levels of economic, scientific and creative standards further improve the standard of the economy and quality of education, constantly serving and returning to one another. Holistic education builds depth of character, creative abilities, and scientific temper.

Educated populace can steer a nation towards ethical, social, cultural, medical, technological and spiritual advancement. In that sense education budget allocation must be treated as paramount for the nations all-round growth and development.


Education Budget Trends in Recent Years

In recent years, India witnessed marginal increment in the education budget. From Rs 85,000 crore in 2018 to Rs 94,500 crore in 2019, a 10 % increase and Rs 94,500 crore in 2019 to Rs 99,300 crores in 2020, which was a 5% increase only.

In the year 2020-21, of the Rs 99,300 crore Rs 59,845 crore were allocated to school education and literacy department and around Rs 39,466 were allocated to higher education, as per Ministry of Education.

The Total Budget 2021-22 stood at Rs 34,83,236 crores. Out of this, allocation towards Education stood at a meagre Rs 93224.31 crores only. Department of School Education and Literacy was allocated Rs 54873.66 crores and Department of Higher Education was allocated Rs 38325.15 crores. This was a 6% drop from what was previously allocated in the year 2020-21, which stood at approximately Rs 99,300 crores.

From financial year 2018 and increment of 4% was observed in the financial year 2019. From financial year 2019 an increment of 11.6% was observed in the financial year 2020. From the financial year 2020 an increment of 4.7% was observed in the financial year 2021.

From the financial year 2021 a drop of 6% was observed in the financial year 2022. From the financial year 2022 an increment of 12% was observed in the financial year 2023 where total education budget stood at its all-time high at Rs 1,042.78 billion.

According to Economic Survey 2022-23, ‘’While the expenditure on social services increased from ₹9,15,500 crore to ₹21,32,059 crore, the share of education within this umbrella category shrank from 42.8% to 35.5% between the financial years 2015-2016 and 2022-2023, according to budgetary documents.


Part of this could be attributed to the faster growth in spending on health and other measures due to the COVID-19 pandemic. As a share of total GDP, the budgetary allocation for education saw only a minimal gain of 0.1 percentage points, from 2.8% to 2.9% during the same seven-year period.’’


In terms of expectation, in the financial year 2024, education budget allocation, as a percentage share of GDP, might not witness a huge jump even though the nation is shifting its ambitions and conversations towards accessible quality education.

However, we can expect the education budget allocation to increase anywhere between 6% to 10% from previous year’s education budget allocation. The country should aim at getting closer to the recommended 6% of GDP mark and envision to arrive at a 10% of GDP in the coming decade.


(The writer Kadambari Rana is an educator, consulatant and columnist who practices and advocates principles of integral education, and the views expressed in this article are her own)