Hits and misses in Budget 2024 for India’s education sector

From announcing INR 1.48 lakh crore (over $17 billion) for education, employment and skill sectors, internships with stipends worth INR 5,000 in top companies, to promising education loans upto INR 10 lakhs ($11,949), the central government is eyeing a funding boost for the education space. 

Stakeholders from India’s domestic and international education industry, speaking to The PIE News, have highlighted the hits and misses for the sectors.

According to Dr. Anand B, assistant professor for economics and strategy at the Institute of Management Technology, Dubai, the INR 1.48 lakh crore allocation can prove to be the game changer for reforms in India’s educational infrastructure. 

“E-vouchers for education loans with interest subvention will make higher education more accessible. Upgrading 1000 ITIs, aligning courses with industry needs, and skilling 20 lakh youth over five years will address the skills gap and improve employability.

“Initiatives like setting up working women’s hostels and providing internships to one crore youth with stipends will boost female labour force participation and bridge the education-employment gap,” said Dr. Anand. 

Though the Budget 2024 didn’t directly address internationalisation in higher education, a major component of the National Education Policy, some believe a significant part of the allocation can benefit the environment around international education. 

“For the international education sector, this means potential enhancements in infrastructure, research facilities, and overall quality. As India advances toward digital literacy (the vision of ‘Viksit Bharat’), strengthening digital infrastructure becomes crucial.

“The budget’s emphasis on digital connectivity and technology adoption can benefit both domestic and international students. That said, again execution matters. Efficient utilisation of allocated funds, maintaining quality standards, and addressing gaps are critical,” said Namita Lolitkar, chief consultant, Ensquares Education. 

“Foreign universities have extensive networks and collaborations with multinational corporations, startups, and industry leaders. Leveraging these connections, they can facilitate internships for students across borders. Universities can actively engage with corporate partners to create internship pipelines.”

Though the government’s move to offer financial support up to Rs 10 lakh for domestic education, can be seen as a way to make students stay in the country, experts believe it should not be seen as a disadvantage to ones wishing to study abroad. 

“This should not be seen as a disadvantage for students wishing to study abroad, as banks, especially nationalised ones, offer good loan schemes. Additionally, many international universities offer favourable payment options to accommodate students. If anything, I feel that students planning to study abroad will be at an advantage, as we might see more scholarships, better payment terms, and increased funding opportunities,” said Jasminder Khanna, co-founder, Gresham Global. 

But others like Aritra Ghosal, founder and director at OneStep Global, believe more could have been done for students pursuing overseas education. 

“The education loan under the Model Skill Loan Scheme is up to 10 lakh rupees for higher education but is restricted to domestic institutions. Increasing financial support and reducing interest rates on education loans for overseas higher education would ease the financial burden on study abroad aspirants and cultivate global competency,” stated Ghosal. 

“We were also hoping for the inclusion of measures such as extending financial support via student loans, reducing the interest rates for loans for foreign education, and offering reductions or waivers on TCS to benefit study abroad aspirants and ease the financial burden on their families,” said Saurabh Arora, founder and CEO at University Living. 

Though Reserve Bank of India’s updated rules state that if the remittance amount exceeds INR 700,000 (approx. £6,700) it is subject to a TCS of 0.5%, it is only applicable for an education funded through a loan from a financial institution.

Increasing financial support and reducing interest rates on education loans for overseas higher education would ease the financial burden on study abroad aspirants and cultivate global competency

Aritra Ghosal, OneStep Global

According to Abhijit Zaveri, founder and director, Career Mosaic, the new measures could lead to marginalised communities having a better access to international education. 

“The Budget 2024 brings positive news for minority and Scheduled Caste students. The government has revised the subsidy plan for scholarships, doubling the subsidies for education loans given to students from these categories for the upcoming financial years. This significant increase in financial support will help more students from underrepresented communities access international education opportunities, promoting diversity and inclusion,” stated Zaveri. 

Zaveri’ statement comes amid reports of curbs on overseas scholarship schemes catered towards marginalised students across states in India. 

Maya John, an elected teacher representative in the Delhi University’s academic council, has lamented the budget’s ‘lack of apathy towards a large majority of the students’. 

“There is a rampant fund crunch in HEIs. But, no effort has been made to provide more funds to the education sector so as to ensure quality education for all. In fact, a major cut has been made in the budget for the higher education sector from Rs. 57,244 crore allocated in 2023/24 to Rs. 47,619 crore in 2024/25,” John told The PIE.

“This apart, the support grant for Central Universities that has shown an increase of over 28% is actually misleading because under the present inflationary pressure the increase amounts to little. The budget for Central Universities has been kept at Rs. 15,472 crore from Revised Estimates of Rs. 12,000.08 crore. It should be seen in the overall context of a cut in the funding provided to the UGC.”

The University Grants Commission, which has been spearheading regulations pertaining to foreign campuses in India since the past two years, has also seen its funding brought down by 60.99 per cent — to Rs 2,500 crore from the previous year’s revised estimate of Rs 6,409 crore.

“Overall, the longstanding demand of the people’s movement that at least 10% of GDP should be spent on education to ensure that the marginalised students come to the mainstream has not been fulfilled,” John added.