Representative image showing a coin jar and a graduation cap.
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India stands at a crossroads in its journey to become the world’s third-largest economy by 2047, surpassing Germany and Japan. However, a critical disparity threatens to undermine this ambition: the nation’s underinvestment in education compared to its global peers. In the Interim Budget presented in February, Finance Minister Nirmala Sitharaman allocated Rs 73,498 crore for the Department of School Education and Literacy, marking a substantial 19.65 per cent increase from the previous fiscal year. Despite this rise, India’s allocation remains alarmingly low at 4.6 per cent of its Gross Domestic Product, far below the 6 per cent recommended by the Kothari Commission and the National Policy on Education (1986). In contrast, the United States and China allocated 6 per cent and 6.13 per cent of their GDP to education, respectively, in 2023. This shortfall underscores the need for a significant boost in educational funding to meet both current demands and future aspirations.
As India prepares for its 2024–2025 Budget, stakeholders eagerly await indications of whether the government will surpass the 13 per cent increase seen in recent allocations or maintain a more conservative approach. The Ministry of Education received Rs 1,12,899 crore in the previous fiscal — a 13 per cent increment aimed at bolstering initiatives such as the Samagra Shiksha Abhiyaan, expanding teacher recruitment, and research and development efforts. While these are promising, it remains to be seen if they are sufficient to address the systemic issues within the education sector.
The Covid-19 pandemic disrupted education systems worldwide, particularly affecting vulnerable populations, like girls, in developing countries, including India. There is a need to focus on the return of the girl child to school, addressing the barriers that have been exacerbated by the pandemic, and ensuring that no girl is left behind. To address these challenges, the government can implement a multi-pronged approach through targeted gender-inclusive schemes, such as conditional cash transfers to families contingent on girls’ school attendance, mentorship programmes, and lifeskills training.
The integration of emerging technologies such as artificial intelligence (AI) and virtual reality (VR) presents a unique opportunity to revolutionise India’s educational landscape. The transformative potential of increased budget allocations towards digital infrastructure, teacher training, and AI-powered educational tools is immense. Investments in VR labs and immersive learning environments, coupled with incentives for AI and VR-focused ed-tech startups, could significantly enhance science, technology, engineering and mathematics (STEM) education, and foster greater student engagement.
Public-private partnerships have the potential to ensure broad access and effective implementation of these innovations, thereby modernising India’s educational framework to meet global standards. Collaborations with private entities can bring in the much-needed expertise, technology, and funding to complement government efforts and ensure that educational advancements reach all corners of the country.
As India navigates these critical decisions in its fiscal planning, the balance between economic growth and social sector investments, particularly in education, will be pivotal. The July 23 Budget provides a crucial opportunity for policymakers to realign priorities and commit to substantial and sustained investments in education, laying the groundwork for India’s future competiti-
veness globally.
Another concern is the underutilisation of allocated resources within the education budget. For instance, in 2023–2024, the government outlay was Rs 1.16 lakh crore of which Rs 1.08 lakh crore was spent. The government must implement mechanisms that ensure allocated funds are effectively utilised to improve educational outcomes.
India also faces a challenge with low female participation in the workforce, with only 37 per cent of women in formal employment as of 2023. To address this gap, a strategic focus on education, particularly higher education and STEM courses, is crucial. Allocating additional funds for scholarships specifically targeted towards women pursuing higher education, especially in STEM fields, can help overcome financial barriers that often deter women from opting for and pursuing these programmes.
While incremental increases in educational funding are a step in the right direction, achieving the NEP’s target of 6 per cent of the GDP and addressing the multifaceted challenges of educational equity and quality demand a concerted and strategic approach from India’s leadership. It is imperative that the government take bold steps to enhance the education budget, ensuring that every child has access to quality education and that the nation can fully realise its potential as a global economic powerhouse.
(The writer is Associate Professor, Department of Economics at Christ, Deemed to be University, Bengaluru.)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.