| Budget 2020 counts education as a part of 'aspirational India', critical to realising India's demographic dividend. The sector's allocation has registered a 5% increase over the current fiscal's, to '99,311crore. Yet, public expenditure. Including the states' spending, as a share of GDP remains stagnant at 3.1%. |
| It is unlikely to go up dramatically, given the slow growth in tax revenue. The budget permits external commercial borrowings (ECBs) and foreign direct investment (FDI) to bridge the fund gap. Access to funds is fine, but college fees will be hostage to macroeconomic management and global financial turbulence that make exchange rates and hedging costs volatile. The move would benefit tiny elite capable of bearing the fees necessitated to service external investment. |
| This will not automatically help raise the quality of higher education. India needs to fundamentally transform its education sector. Public expenditure must focus on schools and research that would not find private backers. |
| India's higher education comprises 993 universities, 39,931 colleges and 10,725 stand-alone institutions. Most of them would require state support, but must be encouraged to augment revenues, via student fees, endowments and industry partnerships. To ensure access, low-cost student loans must supplement scholarships. In the US, state guarantee and securitisation lower the cost of education loans. The UK caps share of income used for servicing such loans. |
| More money for the education sector is welcome. But without a plan that improves the quality of education across the entire chain, more money will do little to address the needs of aspirational India. Perhaps, as a first step, government needs to ensure that the available funds are used properly and efficiently so as to maximise outcomes. |
A) Because the increase just keeps pace with the inflation
B) Because the World Bank experts recommend 5% allocation
C) Because public expenditure is stagnant as a share of GDP
D) Because the States have no interest in contributing to education
Correct Answer: C
Solution :
(c) The sectors allocation has registered a 5% increase over the current fiscals, to 99,311crore. Yet, public expenditure, including the states spending, as a share of GDP remains stagnant at 3.1%. It is unlikely to go up dramatically, given the slow growth in tax revenue. The budget permits external commercial borrowings (ECBs) and foreign direct investment (FDI) to bridge the fund gap.
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