Finance Minister Nirmala Sitharaman unveiled a ₹48.21-lakh crore Budget for 2024-25 of the Union Government on 23rd July. Sitharaman assured that the central government’s total fiscal deficit is expected to be brought down to 4.9 per cent of the GDP in 2024-25 and reduced further to below 4.5 percent during 2025-26.
Sitharaman assured that the central government’s total fiscal deficit is expected to be brought down to 4.9 per cent of the GDP in 2024-25 and reduced further to below 4.5 percent during 2025-26.
The centre declared a 28% increase in the budget allotted to central universities as compared to last year, and financial support for loans up to Rs 10 lakh for higher education in domestic institutions. However, in what seems like a drastic move, the budget cut back the grant for the higher education regulator University Grants Commission by more than 60 percent.
In addition, the allocation for Indian Institutes of Management (IIMs) have seen a dip for the second year in a row, as per the Union Budget. Last year, funding for IIMs was cut from Rs 608.23 crore to Rs 300 crore. This year, it has been further decreased to Rs 212 crore, down from the revised estimate of Rs 331 crore. The budget for Indian Institutes of Technology (IITs) has also been slashed to Rs 10,324.50 crore from last year’s 10,384.21 crore.
Although the support grant for central universities has risen by more than 28 percent and the budget for these institutions has been raised to Rs 15,472 crore, up from the revised estimate of Rs 12,000.08 crore, the substantial reduction in UGC’s funding indicates a significant shift in priorities. UGC budget has been cut to Rs 2,500 crore, a staggering 60.99 percent reduction from the previous year’s revised estimate of Rs 6,409 crore.
The 2024-25 budget and higher education
The Union Budget’s mixed signals suggest a balancing act between fiscal prudence and support for higher education. While there is increased funding for central universities and support for educational loans, the substantial reductions in UGC, IIMs, and IITs capital highlight potential areas of concern. The UGC funnels and regulates funding to multiple Higher Education Institutions and fundamentally operates as their regulatory body. The sharp decline in its budgetary funding could result in an impaired ability to effectively support and oversee educational institutions, potentially impacting the quality of education and compliance with regulatory standards.
While there is an emphasis on improving central universities, enhancing infrastructure and generating financial accessibility through credit facilitation and by creating job opportunities, there is also a persistent need to evaluate the centre’s promises with the Budget. The claim that there has been a considerable improvement in support for higher education can be misleading. In reality, the total budget for higher education demonstrates an overall decrease.
The claim that there has been a considerable improvement in support for higher education can be misleading.
The revised estimates for 2023-24 were Rs 57,244.48 crore, but the allocation for 2024-25 has dropped to Rs 47,619.77 crore. This budgetary allocation falls far short of the ambitious promises made in the National Education Policy 2020. Prof Furqan Qamar, former vice-chancellor, Central University of Himachal Pradesh and former secretary general, Association of Indian Universities (AIU) told Education Times, ‘It is a misnomer to suggest that there is a big push for higher education. The net allocation for higher education has actually declined…The budgetary allocation for higher education is nowhere close to the noises made about the NEP 2020.’
Does the budget prioritise short term agendas over long term ones?
The Union Budget’s prioritisation of central universities and specific schemes over UGC, IIT and IIM funding is in immediate and direct contradiction to the ambitious goals of NEP 2020. The reduction in funding for the country’s premier institutions suggests a reversal of NEP’s commitment to drive innovation, research, and global competitiveness, potentially impacting the ability of the institutes to maintain their high standards and contribute to the national and global education landscape.
The NEP outlines a long-term vision for transforming higher education through substantial and sustained investment. By favouring immediate increases in certain areas, while cutting back on foundational regulatory bodies and key institutions, the budget may be focusing on short-term gains rather than addressing the comprehensive, long-term needs of the higher education sector.
Amruth G Kumar, professor and dean, School of Education, Central University of Kerala, in conversation with Education Times opines that ‘Though the Commission’s share is reduced, the hike in the allocation for [central universities] will naturally re ect in the various quality initiatives of these institutions. It will also have an impact on their constituent colleges for which the fund is channelised through the PM-USHA scheme which has also witnessed a rise in the total allocation.’
While increased funding for central universities and specific schemes like PM-USHA is beneficial, it does not address the potential disparities in resource allocation, regulatory oversight, and long-term sustainability concerns. The reduction in UGC funding could exacerbate existing inequalities between institutions, with some benefiting from targeted increases while others, particularly those not covered by the PM-USHA scheme, may face nancial shortfalls.
Moreover, the reduction in funding toward the IITs and IIMs may adversely affect their research and development (R&D) capacities.
Moreover, the reduction in funding toward the IITs and IIMs may adversely affect their research and development (R&D) capacities. These institutions play important roles as centres of innovation and advanced research, functioning as hubs of the major contributions to technological and scientific advancements in the country. A decline in their financial resources could impair their capability to engage in pioneering research and to attract and retain global talent.
How can the government effectively sustain quality higher education in India?
Presenting the interim budget in February, Nirmala Sitharaman said that numerous new higher education institutions have been established since 2014, including seven IITs, 16 IIITs, seven IIMs, 15 AIIMS, and 390 universities, alongside 3,000 new ITIs. The creation of new institutions is significant, but it must be complemented by adequate funding and aid for existing institutions and regulatory bodies.
The severe reduction in UGC funding and the budget cuts for well-established institutions could compromise the effectiveness of these new entities and existing institutions. The reduction in support for established institutions like IITs and IIMs, along with the UGC, reflects a misalignment of priorities. Effective transformation of higher education requires both the establishment of new institutions and the sustained support and enhancement of existing ones.
