The 2019 Interim Budget was eagerly awaited as a signal for the Modi Government’s priorities prior to the elections that will take place later this year. And in many ways, the current budget is a populist budget, focusing on providing land owning farmers financial relief and tax breaks for the middle class. However, what was notable was the lack of emphasis on expenditure on education. While this is unsurprising, as education expenditure does not provide the short-term gains sought in a pre-election budget, it does have implications for various players in the sector until the elections take place.

In this budget, the government has allocated a total of ₹ 93,847.64 crore (approx.US $13.93 billion) for the education sector for 2019-20, an increase of over 10% from the last budget allocation. Finance Minister Piyush Goyal also announced an increase in the allocation for the National Education Mission to ₹ 38,572 crore (approx.US$ 5.38 billion) from ₹ 32,334 crore (approx.US$ 4.51 billion). Minister Goyal also announced that a new All India Institute of Medical Sciences (AIIMS) will be set up in the state of Haryana.

However, the share of expenses on the education as a whole remains the same as last year. Moreover, despite the government’s strong push towards promoting the Higher Education Finance Agency (HEFA) as the primary lender to government higher education institutions, the allocation for HEFA has been reduced from ₹ 2,750 crore (approx.US$ 0.38 billion) to ₹ 2,100 crore (approx.US$ 0.29 billion) this year.  Minister Goyal also reiterated commitments made in the draft AI policy towards creating Centres of Excellence, as well as to set up new Schools of Planning and Architecture, and National Institutes of Design.

For domestic institutions, while this budget seems to promise a lot, it does not have much room to make significant changes within the higher education sector. Experts and university teachers are claiming that the overall  increase in allocation is not enough for public higher education institutions, as the new 10% quota for economically backwards upper castes places a lot more financial strain on universities to ensure adequate infrastructure for the inevitable influx of students. Professors at IITs and IIMs have also raised concerns about the cut in funds to HEFA, pointing out that HEFA is already compelling institutes to take loans instead of providing grants, and that this budget cut is only going to push universities to find other sources of finance.

For international higher education players, the impact of this budget is less clear. The budget does not provide any major overhaul of existing regulatory framework, nor does it explicitly impact collaboration between Indian and foreign educational institutions. Collaborations between private universities and foreign institutes have not been adversely impacted by this budget. However, with public universities claiming an enduring paucity of funds despite nominal increases in budgetary allocations, foreign partners will do well to be mindful of how they price their offerings when exploring partnerships with public universities. This will not be a major change to the current modus operandi as India has always been a price sensitive market, however, it is something to keep in mind when dealing with public universities. In addition, through the Rashtriya Uchchattar Shiksha Abhiyaan (acronym RUSA, translation- National Higher Education Mission), the Government of India is keen to forge partnerships that improve the quality of education provided and research produced at the state level ─ through strategic funding. Though it originated in 2013, it has been actively expanded and promoted by the current administration and shows a continuing commitment towards improving higher education in India. Most recently, Prime Minister Narendra Modi digitally launched multiple projects under RUSA worth over ₹ 3,000 crore (approx. US$ 0.41 billion). There is thus a hospitable environment and immense potential for innovative institutional partnerships between foreign institutions and the state level universities under RUSA .

Authored by the Education Research at Sannam S4.

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