While budgetary outlay for education remains much less than the 6% of GDP ideal, what’s more important is utilising the allocated funds efficiently and innovatively, whether in school education or higher education, to ensure positive learning and employment outcomes, explains Anvitti Rai
India’s spends on education
Since the Kothari Commission’s report in 1966 and the first National Policy on Education in 1968, policy experts have been stressing that national public expenditure on education must be at 6% of GDP. However, trends have shown that while private expenditure on education has increased since 1968, the same is not true for public expenditure. According to a 2024 study by Venkatanarayana Motkuri and E Revathi published in the Indian Public Policy Review, “The per capita public expenditure on education was 0.7 times that of the private [sector] and the ratio increased to 2.3 in early 1990s. Such a ratio is gradually declining since 1990s, and it is 1.5 at present.” Currently, the total budgeted expenditure on education is about 3.5% of GDP; the Centre bears 25% of the total government spending on education, with the rest coming from the States. The Union Budget 2024 allocated Rs 1,25,638 crore for education, with the bulk going to school education. The department of school education was allocated Rs 73,498 crore, of which Rs 37,010 crore was allocated to the Samagra Shiksha Abhiyaan, the Centre’s flagship school education scheme.
Current status of school education
While universal education is the goal of the National Education Policy 2020, the poor quality of school education continues to be a sad reality. The latest data from the Unified District Information System for Education Plus (UDISE+) of the education ministry indicate that we continue to grapple with low enrolment, retention of students,and infrastructure challenges. Gross enrolment ratio at the secondary level is 66.5% while the dropout ratio is 10.9%. As the Annual State of Education Report 2024 revealed, though 86.8% of 14-18-year-olds are enrolled in a school, 25% of them cannot read a standard II-level text fluently in their regional language. “At a state level, 80-90% of the money goes into paying teachers and paying pensions, and less money goes to pedagogy,” says Amit Chandra, CEO, Centre for Civil Society.
Unemployable graduates
The problem of poor quality of education gets worse when it comes to higher education. While we have more than 70,000 higher education institutions, ‘about one in two are not yet readily employable straight out of college’, the Economic Survey for FY24 had pointed out. The disconnect between degrees and employability has been pointed out several times by industry chiefs. A TeamLease study had warned that only 10% of the successful 15 lakh engineering graduates in 2024 were likely to find a job. The future of education is about creating a learning ecosystem that bridges academic theory with real-world industry skills. “Work-linked degrees represent more than a trend. They need to be considered as a strategic response to the rapidly evolving job market, where adaptability and practical expertise are becoming as crucial as traditional academic credentials,” Jaideep Kewalramani, COO and head of employability business at TeamLease Edtech, had told FE recently.
Internships & industrial training
Assorted government schemes are aiming to make the workforce more employable. A start has been made with the PM Internship Scheme announced in Budget 2024; the programme kicked off in December last year with interns from 656 districts embarking on their internship journeys with top companies. The pilot phase of the scheme intends to provide 1.25 lakh internships across 24 sectors with 10 million youth to be trained over a five-year period. It is now to be seen whether the coming Budget builds on this.
Budget 2024 had announced that 1,000 Industrial Training Institutes would be upgraded; outdated curriculum, lack of industry-specific training, poor perception of students among companies, weak industry engagement, had made them the last port of call for any worthy student. Rs 1000 crore had been allotted for this in FY25; however, not much has happened on that front. The coming Budget will need to prioritise this.
Reforms in higher education
The University Grants Commission (UGC) Draft Regulations 2025 seems to be making a start here —the stated aim is to address faculty shortages (33% and 29% teaching positions across central universities and NITs are vacant), lack of multi-disciplinary courses, outdated evaluation metrics and inflexible governance structures. More funds along with a policy rethink can help. Budget 2024 had brought down the funding for UGC by 61%. On the other hand, the grants for central universities saw an increase of over Rs 4,000 crore. NITI Aayog CEO BVR Subrahmanyam had recently emphasized the need to double the number of universities to 2,500 to ensure 50% of students can access higher education; only 29% of the age-eligible population currently enrolls in universities. Promoting public-private collaborations can help here. With higher education increasingly expensive, financial support becomes essential. Budget 2024 had announced loans up to Rs 10 lakh to students for higher education in domestic institutions, more needs to be done on that front.