India’s education budget has improved over the years — but it’s still too low

• The Indian government will release the Union Budget for this year on 5 July.
  
• In 2018, the country allocated ₹850 billion to the education fund, which was increased by 10% in 2019 at ₹938 billion.
  
• According to government think tank Niti Aayog, India should increase its education expenditure to nearly 6% of GDP over the next four years.
  
• India reportedly ranks third in terms of education score of BRICS nations.

The Indian education system needs an overhaul and it is to be seen if that is indeed high on the agenda of the Finance Minister Nirmala Sitharaman as she announces Union Budget on July 5.

In 2018-19, the former Finance Minister, Arun Jaitley allocated ₹850 billion towards the education fund. This year, in the interim budget, he announced a 10% increase in the education budget, dedicating a total of ₹938 billion for schools and higher education programmes.

The economic survey conducted last year has shown that the government had limited fiscal space to increase spending on education.

While the school education budget increased in 2019 with a ₹500 billion fund, the higher education budget allocated for prominent institutions including Indian Institute of Technology (IITs) and Indian Institute of Management (IIM) saw a drop.

In the 2017-18, the government provided funds to the tune of ₹818 billion to the education sector, which accounted for nearly 2.7% of the total GDP of the country.


The chart above shows that there has been an increase in India’s expenditure on education. However, it is low compared to other countries like China and Mauritius — which spend 3.3% and 5% of their total GDP on education.

According to government think tank Niti Ayog, India should increase its education expenditure to nearly 6% of its GDP, over the next four years.

This is necessary to improve the quality of education. India ranks third in terms of education score of BRICS nations (Brazil, Russia, India, China, South Africa). Amongst South Asian countries, India has the second-lowest score in education quality, coming ahead only of Afghanistan. Sri Lanka also ranked much higher than India.


The low quality score may be attributed to teacher shortages and improper assessment criteria, according to an Indiaspend report from 2018.

Therefore, it is necessary for Nirmala Sitharaman to allocate more resources and attention to improving the quality of education in India.

See also:
India may have one common exam for all college admissions-- if the draft National Education Policy is passed

An in-depth analysis of India’s past education budgets