In the 2023 budget, the Ministry of Education was allocated Rs 1,12,899 crore, marking a 13 percent increase. This amount constitutes 2.9 percent of the central government’s overall estimated expenditure for FY24. However, the share of education spending in the aggregate expenditure of states and Union Territories (UTs) has been declining over the past decade. For the current financial year, 27 out of the 31 states and UTs have budgeted a lower proportion of expenditure on education compared to the average spending during the pre-pandemic period (FY16-20). “Considering that state budgets account for 60% of the net expenditure of the government in India, an increment in a state’s spending on education would be massively beneficial in enhancing the state’s landscape, and the overall improvement of education and literacy rates at the national level,” Chandrakant Patil, Minister of Higher and Technical Education, Maharashtra, told the financialexpress.com.
Patil further suggested that it is also important to not just focus on allocations as a headline number, but rather also look at the policies which are being unveiled by the Government to effectively channelize the allocations.
In FY24, an average of 14.7 percent of the budget of Indian states was allocated to education. The majority of funding for government schools comes from state governments, while the central government contributes through programmes such as Sarva Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan (RMSA), Teacher Education (TE), and mid-day meals. “Each state has unique priorities influenced by factors like demographics and socioeconomic barriers. Consequently, some states allocate more to their budgets, while others tailor their allocations to specific needs. States with established infrastructure and stable student enrolment require lower education funding, whereas those revamping their education systems allocate higher amounts to build capacity,” Praneet Mungali, Secretary, Sanskriti Group of Schools, Pune, said.
Public expenditure on education in India has been increasing annually since 2013. In 2022, an estimated RS 757,000 crore was spent by both the central and state governments. However, it is still very less from the recommended figure by the National Education Policy. The policy recommended that India allocate at least 6% of its GDP to education. However, actual public expenditure has remained around 2.8% of GDP. More than 85% of public education spending is covered by state governments. In 2022-23, states are estimated to bear 89.3% of the total education expenditure, while the central government contributes 10.7% through specific programmess. “Since the introduction of GST, revenue collection by states and UTs has fluctuated, leading to an unbalanced division of tax revenue and impacting overall expenditure. Additionally, vast demographics affect state education budgets, as some states classify spending on schools for certain castes (SC/ST) as welfare rather than education expenditure, creating an illusion of inadequate education funding,” Mungali explained.
In 2022-23, the central budget for education is projected to fall short by Rs 7,100 crore, or 7% less than planned. Reports indicate that the gap between budgeted and actual expenditure has been widening since 2017, increasing from a 5.5% shortfall in 2017-18 to 7% in 2022-23. Conversely, state budgets are expected to exceed their planned education spending by 2.1% in 2022-23.
In 2022-23, total public education expenditure (central and state) is estimated to be 9.5% of combined central and state expenditures, down from 11.6% in 2013-14. The central government’s share is estimated at 2.3% of its total expenditure, while states are projected to spend 13% of their total expenditures on education. Delhi leads with 21.1% of its total expenditure allocated to education, followed by Bihar at 19.7%. In contrast, Telangana and Manipur have the lowest percentages, at 6.8% and 7.6%, respectively. “It is important to recognise that while we should always look for growth in budgets, it is equally significant to have a greater focus towards policies formalised to channelise the budgets and ensuring the overall utilisation of budgets,” Patil suggested.