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Analytical Study of Budget allocation to Education sector -Union Budget 2020-21

 If you fail to plan then you plan to fail. The activity of planning a budget is considered as the central activity of financial management. Budget not only gives an account of the year's housekeeping and of the year to come so far as the state is concerned, but it is the basis of control of the financial affairs of the state regarded as household.

Firstly, the article gives glimpses of union budget 2020-21and analyzes the budget allocated to the Education Sector followed by analysis of the increment in the budget provided to education sector this year. Further the article will give an in depth information on programmes proposed in the education budget of FY'21 and will appraise and critique the allocation of budget to education sector.

Budget is basically a microeconomic concept that is estimation of Revenue and Expenses that must be undertaken for a specified future period and is utilized by governments. Legally, According to Article 112 of the Constitution of India, the Union Budget of a year is an 'Annual financial statement' i.e. the estimated receipts and disbursements of the government of the current fiscal year. This emphasizes an obligation on the Indian parliament to assure that all the revenue, expenditures and measures it authorizes, legally and constitutionally, are economically sound, matches the needs and aspirations of the people with equity, and symbolizes that it is we the people are the source of this budget.

The Union Budget 2020-21 has been structured on the overall theme of Ease of Living. The central ideas of this year's Budget are - Aspirational India, Economic development, A Caring Society.

Glimpses Of Union Budget 2020-21

The budget can be said as the nucleus of a cell round which the financial activities of the Country oscillates. It is both the scale and the limit of all the financial operations.
Union Finance Minister Smt. Nirmala Sitharaman on 1 Feb 2020 unwrapped a series of far-reaching reforms, aimed at boosting the Indian economy through a combination of short-term, medium-term, and long term measures.

The Union Budget has been structured on the overall theme of Ease of Living.
The budget has emphasized around three prominent themes:

  1. Aspirational India in which all sections of the society seek better standards of living, with better access to health, education and better jobs.
  2. Economic development for all, which will revolve around PM's (Sabka Saath, Sabka Vikas, SabkaVishwas).
  3. Caring Society that is both humane and compassionate, where Antyodaya is an article of faith.

The three broad themes are held together by

  1. Corruption free - policy-driven good governance
  2. Clean and sound financial sector.

Increment In Fy'21 Education Budget

Finance Minister's budget speech contained important proposals on income tax, the welfare of SCs, OBCs and STs, infrastructure, education, agriculture and much more. Legally, free and compulsory education is provided as a fundamental right to the children between the ages of 6 and 14 under article 21(a)of the Constitution of India as well as under article-45 DPSP which says to provide for early childhood and education to children below age of six years.

According to studies, by the pace India's economy is growing, India is going to have largest working population in the world. Moreover, they will need vocational skills and quality education to be the global job demand. Hence for India’s continued recognition as the talent pool for the world, requisite investments in the education sector is the need of the hour.

The FM in the Union Budget 2020 (FY'21) proposed a new education policy and along with it Rs 99,300 crore worth of funding for the Education sector in 2020-21, and about Rs 3,000 crore for skill development too. In comparison, an allocation of Rs 94,800 crore in the Education sector was done in the previous year's Union Budget. India has been witnessing a nominal increment in allocation of education sector budget in past 3 years. Statically, from Rs.85000 crore in year 2018 to Rs.94,500 crore in year 2019, this year around Rs. 99, 300cr allocation is made to the budget of education sector. Moreover, for the matter of skill development ministry and its various programmes, an allocation of Rs 3,002.21 crore has been proposed for FY21.

In FY'20 Rs 2,531.04 crore was allocated to the skill development ministry. Budgetary allocation of Rs. 99,300 cr. is slightly up by approx. 5% from last year in comparison to 10% rise in last year. Of this, the department of higher education has been allocated Rs 39,466.52 crore while the school education and literacy department has been given Rs 59,845 crore. In FY'20 the department of higher education was allocated Rs 38317.01 crore while the school education and literacy department was given Rs 56536.63 crore.

In the higher education sector in particular, the outlay for the improvement of the salary scale of teachers has been hiked from Rs 1,800 crore in FY20 to Rs 1,900 crore in FY21, budget allocated to Indian Institutes of Technology has been hiked from Rs 6559.95 crore in FY'20 to Rs 7332 crore in FY'21,but budget allocated to Indian Institutes Of Management has been reduced from Rs 500.53 crore in FY'20 to Rs 476 crore in FY'21. With worst of overall economic crises and downturn, one cannot expect better than this budget.

Programmes Proposed In The Fy'21 Education Budget

Following are the important highlights of allocation of budget to education sector in Union budget 2020-21:

  1. For Skilling and employability, near about with 150 higher educational institutions in India is proposed to start and provide for apprenticeship embedded diploma/degree courses around March 2021.Further, the government will also try to start a program where urban local institutions and companies would be providing internships opportunities to fresh young engineering graduates for period upto 1 year.
  2. In order to provide quality education to students of deprived and weaker sections of the society, a degree level full-fledged online education programme will be started. This will be similar to the SAT examination used globally for taking admission-related decision for students.
  3. India will be a preferred as destination for higher education under it's 'STUDY IN INDIA'A program has been proposed for making India as a Study destination, IND-SAT will be held in Asian and African countries to attract students worldwide. Under the Budget, a total of Rs 65 crore has been allocated for ‘Study in India’ in FY21 compared to Rs 32 crore in revised estimate FY20.
  4. The FM intended Special bridge courses that will be made by Ministry of Health, Skill development with the help of professional bodies in India. Language requirements of various countries will also be included and all these be achieved through special training packages.
  5. It has been proposed to attach a medical college to an existing district hospital in PPP mode. Those states that fully allow the facilities of the hospital to the medical college and wish to provide land at a concession would be able to receive Viability Gap Funding.
  6. National Board of Examination imparts PG medical qualifications, Diploma and fellow of National Board (DNB/FNB). The Government will, therefore encourage large hospitals with sufficient capacity to offer resident doctors DNB/FNB courses under the National Board of Examinations.
  7. The special bridge courses is proposed to be designed by the Ministries of Health, Skill Development together with professional bodies to bring in equivalence the skills required for the global standards for nurses, Para-medical staffs, teachers, etc. Language requirements of various countries need also to be included. All these should be achieved through special training packages.
  8. When it comes to funding, the Budget has proposed steps to enable sourcing External Commercial Borrowings (ECBs) and foreign direct investment (FDI) so as to be able to deliver higher quality education. Right now, 100 percent FDI is allowed in the education sector.
  9. National Police University as well as a National Forensic Science University are proposed by the government in the domain of expertise in policing science, forensic science, cyber-forensics etc.

Firstly, various industries demands individuals but the skills of the individuals does not matches with the demand of employers. So, by government proposing Rs 3,000 crore, skill development will be created which will be available at affordable cost, focusing on five key components that are Visual, Reading, Listening Speaking and Thinking among others are very important, especially via the use of emerging technologies such as Artificial Intelligence (AI).

Secondly, the government has planned degree-level full-fledged online education programs that will be offered by institutes which come in top 100 in National Institutional Ranking Framework for both the rural and urban sectors. This budget of a New India attempts to make the country as one of the leading destinations for higher studies in the world as well as the place for cutting edge innovation.

Thirdly, emphasizing on Special bridge courses, apprenticeship embedded degree/diploma courses, internship after graduation will provide a great opportunity for the students and indubitably it will develop new age technology skills in them. The budget is also very good for students from rural areas as the online education programs will give them a opportunity to learn and develop new skills. It’s a budget that would definitely inspire the youth to aspire.

Fourthly, as education is a state subject, it is good to see that the central government is coordinating with each state to encourage the implementation of the New Education Policy at the grassroots.

Fifthly, the budget recognizes the urgent need to bridge India’s skill gap by encouraging the education sector. Allowing foreign investments and external corporate borrowings by educational institutions will provide much needed new funding sources to facilitate their growth. Further, offering full degree programmes online will enable those who cannot access regular colleges to avail of the qualifications they need to gain full employment.


  1. The centre has allocated Rs. 99,300cr in the budget 2020-21 which is up by 5% from last year which was estimated around Rs. 94, 500. Therefore, minimal increase in the budget provided will not be making any brobdingnagian difference as anticipated. It can be said that this years' budget do not stand to its needs and expectations.
  2. This years' budget laid emphasis on the study in India initiatives and implementation of NEP which is a repetition of last year. Implementing NEP will require consensus building particularly with many states of India, particularly majority now ruled by the opposition. As matter of urgency what is needed is a realistic approach and a need for dialogue with different stakeholders.
  3. Indian higher education system has grown massively since independence. It has now 993 universities, 3.7 crore students and 14 lakhs teachers approximately. There have been reports about unemployability of graduates coming out of our higher educational institutions. Some of the lacuna pointed out by industry experts are lack of soft skills, theoretical approach, less research based studies and infrastructural unavailability. So, it is felt that our education system needs greater inflow of finance to attract talented teachers, innovate and build better labs.

The government had tried to come up with Extraordinary global parameters to enhance our education sector by Providing Online degree courses, World class infrastructure, Teacher's training program, IND-SAT program, implementation of NEP 2019 and many more but if we look forward to the allocation of budget, there is slight increase of about 5% from last year.

Furthermore, these increases are inadequately less as economists have always emphasized and reiterated the need to spend huge portion to education and human skills in order to flourish and keep our Young India moving faster.

Also many times the policies remain a data only on paper because of its bad implementation. So a few measures are suggested to curb this blemish-Use of modern tools that are available to aid conceptual learning in students; updating the course and the curriculum to reflect current market requirements; improving facilities in institutions across all levels; and counseling, as a key requirement for guiding the students in pursuit of higher education or vocational education as per their abilities.

Written By:

  1. Aakash Sharma, LL.B. (Integrated), Year of Study - 2nd year (4th Semester) - Institution Name- Faculty of Law, University of Lucknow
    E-mail- [email protected], Ph no- 8318927609
  2. Name-Shubhi Singh, LL.B. (Integrated), Year of Study - 2nd year (4th Semester) - Institution Name- Faculty of Law, University of Lucknow
    E-mail- [email protected], Ph no- 8418015166

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