Dr Manasvi M Kamat
Despite the financial constraints the economy faced in the passing year, Budget 2020 has done a decent job for the education sector. It is always believed that expansion of education in India has been slow owing to poor funding and no specific objectives. Budget 2020 plugs the gap by increasing outlay, and by setting a target on acquiring life skills and securing employability.
India over the years has recognised the crucial role that education plays in accelerating socio-economic development, and looked at public provisioning of education as an important area of government intervention in the country. Budget 2020 has increased the allocation for the education sector by 5 percent (Rs 4500 crore) to Rs 99,311.52 crore in FY21. Out of which about Rs 3,000 crore for skill development for FY21 compared to Rs 2,531.04 crore in FY20 and is a remarkable step. This will cater to around 300 million students in 1.4 million schools and over 51,000 colleges. In the previous Union Budget 2019-20, the government’s allocation for the sector was Rs 94,800 crore.
Of the total, the department of higher education has been allocated Rs 39,466.52 crore while the school education and literacy department was given Rs 59,845 crore. In the higher education sector in particular, the outlay for the improvement of the salary scale of teachers has been hiked from Rs 1,800 crore in FY20 to Rs 1,900 crore in FY21.
When it comes to funding, the Budget has proposed steps to enable sourcing foreign fund by a bold move. The FM has proposed Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB) in education. With 100 percent FDI allowed in the education sector, it is hoped to pave a new way for the government to be able to deliver higher quality education look beyond domestic investments and talents.
‘Not only the youth in India need literacy but they need both job and life skills’, the Hon FM said in her budget speech. Given the renewed emphasis on skill building and entrepreneurship, the skill of youth would be improved to gain the advantage of the largest working age population in the world by 2030.
The focus on apprenticeship, digital mode for degree education, and internship-embedded educational programs has been a major achievement. The FM said about 150 higher educational institutions will start apprenticeship embedded degree/diploma courses by March 2021 and will start a programme whereby urban local bodies across the country would provide internship opportunities to fresh engineers for a period up to one year. The major step towards boosting online education is the introduction of degree-level full-fledged online education programme. It would be a game and will definitely prove to be a big step towards digitalisation of Indian education system. These courses will be offered by the institutes in the top 100 in the National Institutional Ranking Framework (NIRF).It is proposed to have at least one medical college in each district, and more sets for DNB/FNB providing higher educational avenues for young doctors. The new medical colleges will be attached to an existing district hospital in PPP mode. The states that fully allow the facilities of the hospital to the medical college and provide land at concession would receive Viability Gap Funding.
The new National Police University and National Forensic Science and Cyber-forensic University in the domain of policing science, forensic science, and cyber-forensics have been a welcome step whiles the Indian Institute of Heritage and Conversation to be set up as a Deemed University. However, FM did not give any details on where these would be set up, or by when. The FM Minister also proposed special bridge courses to be designed by the ministries of Health, Skill Development together with professional bodies for teachers, nurses, para-medical staff and care-givers in the healthcare sector. These courses will address global demand for medical and para-medical staff to tap and fill out the employment gap.
The computer-based Common Eligibility Test will be rolled out for the recruitment to non-gazetted posts. The online test will be carried by an independent agency, the National Recruiting.
To bring foreign students to Indian campuses, the FM proposed to start an Indo-SAT exam under a ‘Study in India’ scheme, to enable evaluation and study of students from Asia and Africa who seek admission here. This is similar to the SAT examination used globally for taking admission-related decision for students and used for benchmarking foreign candidates who receive scholarships for studying in India. A total of Rs 65 crore has been allocated for ‘Study in India’ in FY21 compared to Rs 32 crore in revised estimate FY20.
Despite all efforts, the budget has some large misses. No funding is entailed for the ‘Fit-India Program’ and the decision to implement the ‘NEP’ (New Education Policy) implementation, ‘RUSA’ (Rashtriya Ucchatir Shiksha Abhiyaan), and the ‘EBSB’ (Ek Bharat Shrestha Bharat) programmes. There was a pressing need for educational services to be granted with zero percent goods and services tax (GST) slab from currently under the ‘exempt’ category of GST. There is also no word on subsidisation of education loans.
The government could have set up good scholarship fund for meritorious students, or granted ‘infrastructure statuses’ to education institutions, thereby making quality education affordable and accessible for deserving Indian students.
It’s also disappointing that the government hasn’t passed on any benefits for the ed-tech and skill-tech sectors by extending tax benefits and incentives for players, corporate or education institutions by giving tax exemption. A National Research Foundation (NRF) was announced in Budget 2019-20, pushing the total allocation for research up to Rs 609 crore from Rs 350 crore but the NRF, however, never took off.
Budget 2020 has imposed a 5 percent tax collection at source (TCS) on payment to tour operators for foreign travel. Authorized dealers (ADs) of foreign exchange (typically banks) will collect this amount. If PAN is not provided to the AD, TCS will be collected at 10 percent. It has also imposed a 5 percent TCS on payments above ₹7 lakh a year under the Liberalised Remittance Scheme (LRS). Outflows in LRS, including foreign education, maintenance of relatives, gifts, travel and investment rose from $1.09 billion in FY15 to $11.34 billion in FY19, according to Reserve Bank of India data. The largest component of LRS was foreign travel ($4.8 billion) in FY19, followed by foreign studies ($3.5 billion). TCS curbs may reduce this outflow.
Despite the misses, it could be safely said that the Budget 2020 has set a sound road-map for the education sector as a whole.
