ABSTRACT

“An investment in knowledge pays the best interest.” Said by Benjamin Franklin.
Development of educational sector should be a primary goal for every nation as education
is fundamental in the nation building. Now, the question arises here is what sorts of things
requires for development of educational sector and how one nation can develop their
educational sector? Well, to develop educational sector it requires better planning, trained
teachers, better infrastructure and budget(capital). Budget is the most imperative
requirement for educational sector as it is basis to the education because to run schools
and institutions it requires huge amount of capital. So, an effort has been put to analyse
and evaluate the educational sector budget of India for the year 2020-2021 by comparing
it from the revised estimate of 2019-20. In this writing I have tried to present what
amount has been allocated to educational sector and how much percent it is of the Indian
GDP (Gross Domestic Product)? Distribution of educational sector budget between the
Department of school education and literacy, and higher education and its comparison
from the revised estimate of 2019-20. This writing is supported with the conclusion and
suggestions which will give the reader a clear picture of the positive and negative
development of the educational sector budget 2020-21.
 1. INTRODUCTORY STUDY OF EDUCATIONAL SECTOR BUDGET.

In the Union Budget for year 2020-2021, Smt. Nirmala Sitharaman, the Finance Minister
of India allocated Rs 99,311.52 crore for the Educational sector and Rs 3,002.21 crore
has been allocated for skill development of youth as India will be hosting largest working
age population by 2030,1 so to meet the issue of employability of such a larger population
and to make them trained for jobs, it was much needed. For the year 2019-2020,
educational sector budget was allocated Rs 94853.64 and skill development ministry was
allocated Rs 2,531.04 which shows that education sector budget has been increased by
4.69 percent for the year 2020-2021. Among all the ministries, it is the sixth highest
allocation and it makes up 3 percent of the central government’s approximated
expenditure for 2020-21. India’s expenditure on education constitutes 4.6 percent of its
total GDP (Gross Domestic Product) and according to IMD reports India ranks 62 nd in
total public expenditure per student.2 Education sector is considered as an intrinsic part of
the three themes that is Aspiration, Development and compassion.

2. DISTRIBUTION OF EDUCATIONAL SECTOR BUDGET AMONG

VARIOUS DEPARTMENTS.

2.1. DEPARTMENT OF SCHOOL EDUCATION AND LITERACY.

It comes under the ministry of Human Resource Development. This department is bound
and responsible for school education imparted among the children of 6 to 18 years of age.
Right to Education Act, 2009 describe that the government is authorized to bestow free
and compulsory elementary education to all children between 6 to 14 years of age in India
under Article 21A of the Indian Constitution. 3 Whereas, Children between the ages of 9 to
18 years and classes of 9 to 12 years are imparted with secondary education. For the year
2019-20, revised estimate of the department was Rs 56,536.63 crore whereas, for the year
2020-21 department has been allocated Rs 59,845 which is 5.85% more than the revised
estimates (Revised Estimates are termed as mid-year revision of possible expenditure,

1
M Saraswathy, Budget 2020: Education sector allocation up 5% (Feb 01, 2020, 10:25 PM),
https://www.moneycontrol.com/news/business/economy/budget-2020-education-sector-allocation-up-5-
4892771.html
2
Union Budget 2020: How much will Modi govt. spend on education? (Feb 01, 2020, 10:46 AM),
https://www.businesstoday.in/union-budget-2020/news/budget-2020-how-much-will-modi-govt-spend-on-
education/story/395077.html
3
Indian Const. art. 21A
 taking into account the rest of expenditure, New services and New instrument of services,
etc.) of 2019-2020.4

Figure 1: Allocation of budget to Department of School Education and Literacy for

the year 2010-20 (in Rs crore)

Note: Vertical yellow line represents allocation of budget.

From the above given fig. it can be seen that the allocation of budget was decreased by
8.57% for the year 2015-16 i.e. in the year 2014-15 allocation was Rs 45,722 crore which
was reduced to Rs 41,800 crore in the year 2015-16. However, after 2015-16, vertical
yellow line can be seen increasing for each consecutive year which shows that there has
been increase in the budget allocation each year. Between 2010-11 and 2020-21, budget
allocation to this department has grown at an average annual rate of 5%.

In 2020-21, 87% of the estimated spending of Department of School and Literacy will be
spend on centrally sponsored scheme such as Samagra Shiksha and Mid-Day Meal
Programme in schools.

4
 Expenditure Budget, Vol. 2, Ministry of Human Resource development, Union Budget 2020-21,
https://www.indiabudget.gov.in/doc/eb/sbe58.pdf
 2.1.1. DISTRIBUTION OF DEPARTMENT’S BUDGET FOR VARIOUS
PROGRAMMES:5

RE FOR BE FOR %
PROGRAMMES THE YEAR THE YEAR CHANGE
2019-20 2020-21
a. National Education Mission 36,292.30 38,860.50 7.07%
Samagra Shiksha 36,274.40 38,750.50 6.82%
Teacher Training and Adult 17.90 110 514.5%
Education
b. Mid-Day Meal Scheme 9,912.21 11,000 10.97%
c. Scholarship and incentive schemes 422.87 483 14.21%
d. Autonomous (Independent) bodies 9,754.09 9,204.5 -5.63%
e. Others 155.16 297 91.41%
Grand Total 56,536.63 59,845 5.85%
Table 1: Distribution of Department’s budget for various programmes between 2019-20
and 2020-21 (in Rs crore)

Note 1: RE – Revised Estimate, BE – Budget Estimate.

Note 2: % change represents changes in the BE for the year 2020-21 from the RE of
2019-20.

a) NATIONAL EDUCATION MISSION.

It has been allocated Rs 38,860.50 crore for the year 2020-21 which is 7.07% more than
the revised estimate of 2019-20 i.e. Rs 36, 292.30 crore. It includes two schemes:

 Samagra Shiksha

5
Expenditure Budget, Vol. 2, Ministry of Human Resource development, Union Budget 2020-21,
https://www.indiabudget.gov.in/doc/eb/sbe58.pdf
It has been allotted Rs 38,750.50 crore for the year 2020-21 and has witness 6.82%
increase in allocation from the revised estimates of 2019-20 (Rs 36,274.40 crore).

 Teacher Training and Adult Education

In year 2020-21, Teacher Training and Adult Education which comes under the ‘Samagra
Shiksha’ has been allocated Rs 110 crore which is 514.5% more than the revised
estimates of 2019-20 i.e. (Rs 17.90 crore). Nonetheless, in the year 2019-20, the
department had planned and budgeted to spend Rs 125.40 crore which was brought down
to Rs 17.90 crore.

b) MID-DAY MEAL SCHEME (MDMS).

This scheme impart food for the children between 6 to 14 year of ages. For the year 2020-
21, Expenditure in Mid-Day Meal Scheme has been increase by 10.97% from the revised
estimates of 2019-20. Allocation for the year 2020-21 is Rs 11,000 crore whereas, for the
year 2019-20 revised estimate was Rs 9,912.21 crore.

c) SCHOLARSHIP AND INCENTIVE SCHEMES.

In the year 2020-21, it has been allocated Rs 483 and has witnessed 14.21% increase in
the budget allocation from the revised estimate of 2019-20 (Rs 422.87 crore). Under the
provisions of this programme, Ministry of Human Resource Development provides Rs
6000 per year to one lakh praiseworthy students of economically weaker sections.

d) AUTONOMOUS (INDEPENDENT) BODIES.

National Council of Educational Research and Training, and Kendriya Vidyalay

Sangathan are termed as autonomous bodies. These bodies have been allocated Rs
9,204.5 crore for the year 2020-21. Allocation for this year has been decreased by 5.63%
from the revised estimates of 2019-20 (Rs 9,754.09).
 2.2. DEPARTMENT OF HIGHER EDUCATION.

This department also comes under the Ministry of Human Resource Development and it
is obligated for imparting higher education (UG and PG courses, doctoral degrees, etc.)
and training to the students above 18 years of age. For the year 2020-21, the department
has been allotted Rs 39,466.52 which accounts for 40% of the Ministry’s total budget
allocation. In the year 2019-20, revised estimate of the department was Rs 38,317.01
crore which shows that, allocation for this year has been increased by 2.99% from the
revised estimates of 2019-20 Between 2014-15 to 2018-19, centre and states have spent
around 3% of the Gross Domestic Product (GDP) on education 6 and government spent
roughly 1% of this figure on higher education in India.

Figure 2: Allocation of budget to the Department of Higher Education for the year
2010-20 (in Rs crore)

Note: Vertical blue line represents allocation of budget.

In the above given figure, between 2010-11 and 2013-14 blue line can be seen increasing
for each consecutive year which shows that there has been increase in allocation during
that period. Although, in the year 2014-15, blue line can be seen smaller because budget
allocation was decreased by 5.36% from the year 2013-14 i.e. allocation was decreased

6
Demand for Grants 2020-21 Analysis: Human Resource Development, PRS Legislative Research,
https://www.prsindia.org/parliamenttrack/budgets/demand-grants-2020-21-analysis-human-resource-
development
 from Rs 24,465 (2013-14) to Rs 23,152 crore (2014-15). Again allocation increased till
2017-18 and in the 2018-19 it was decreased by 5.08% from the year 2017-18 i.e.
allocation was decreased from Rs 33,614 crore (2017-18) to Rs 31,904 (2018-19).
However, from 2018-19 onwards, allocation has been increasing for each year and
allocation for the year 2020-21 has been highest of all the previous allocation.7

2.2.1. DISTRIBUTION OF DEPARTMENT’S BUDGET FOR VARIOUS

INSTITUTIONS, SCHEMES AND SALARY:8

RE FOR BE FOR %
INSTITUTIONS, SCHEMES & THE YEAR THE YEAR CHANGE
SALARY 2019-20 2020-21

 Institutions
a. Indian Institutes of Technology 6,559.95 7,332 11.76%
b. Central Universities 8,286.9 7,643.26 -7.76%
c. UGC and AICTE 4,857.07 5,109.2 5.19%
d. National Institutes of Technology 3,547.05 3,885 9.52%
e. Indian Institutes of Management 500.53 476 -4.9%
f. IISERs 841.22 896 6.51%
g. IIITs 374.76 393.35 4.96%
 schemes
a. Digital India-e-learning 541 444.4 -17.85%
b. Research and Innovation 339.82 307.4 -9.54%
c. Rashtriya Uchhatar Shiksha 1,380 300 -78.26%
Abhiyan (RUSA)
d. Student Financial Aid 2,321 2316 -0.21%
e. Higher Education Financing Agency 2,100 2,200 4.76%
(HEFA)
f. World Class Institutions 325 500 53.84%
g. Study in India 32 65 103.11%
 salary
a. Teacher’s salary 1,800 1,900 5.55%
Others 4,510.71 5,698.91 26.34%
Grand Total 38,317.01 39,466.52 2.99%
7
Demand for Grants 2020-21 Analysis: Human Resource Development, PRS Legislative Research,
https://www.prsindia.org/parliamenttrack/budgets/demand-grants-2020-21-analysis-human-resource-
development
8
Expenditure Budget, Vol. 2, Ministry of Human Resource development, Union Budget 2020-21,
https://www.indiabudget.gov.in/doc/eb/sbe59.pdf
 Table 2: Distribution of Department’s budget to various institutions between 2019-20
and 2020-21 (in Rs crore)

Note 1: RE – Revised Estimate, BE – Budget Estimate.

Note 2: % change represents changes in the allocation for the year 2020-21 from the
year 2019-20.

State universities and their affiliated colleges mostly handled the admission of the
students for higher studies. However, these universities and colleges receive small
amounts of allocation (money) from the Union Budget. Around 65% of the University
Grants Commission’s budget is allocated and used by the central universities and their
affiliated colleges whereas, state universities and their colleges which handles the
bulk of the admission for higher studies are allocated only with 35% of the UGC’s
budget.9

It can be seen from the Table 2 that institutions and schemes both have witnessed
increase or decrease in grant for the year 2020-21 from the previous year allocation.
Some of them are as follows:

 INSTITUTIONS:
a) Indian Institutes of Technology (IITs)

Allocation for this year has been grown up by 11.76% from the revised estimate of
previous year. It has been allocated Rs 7,332 crore for the year 2020-21 whereas, in
the year 2019-20, revised estimate was Rs 6,559.95 crore.

b) Central universities
They have been allocated Rs 7,643.26 crore for the year 2020-21 whereas, for the
year 2019-20, revised estimate was Rs 8,286.9 crore which shows that allocation has
been decreased by 7.76% this year from the revised estimate of 2019-20.

c) UGC and AICTE (All India Council for Technical Education)

9
Report no. 284: Issues and challenges before the Higher Educational Sector in India, Standing Committee on
Human resource Development (Dec. 14, 2016),
http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20HRD/284.pdf.
For the year 2020-21, they have been granted Rs 5,109.2 crore whereas, for the
previous year, revised estimate was Rs 4,857.07 crore. This year allocation has been
increased by 5.19%.

d) National Institutes of Technology (NITs)

For this year, it has been granted Rs 3,885 crore whereas, for the year 2019-20,
revised estimate was Rs 3,547.05 crore. Allocation has been increased by 9.52% from
the revised estimate of previous year.

e) Indian Institutes of Management (IIMs)

For the year 2020-21, they have witnessed 4.9% decrease in the allocation. Allocation
for this year is Rs 476 crore whereas, for the year 2019-20, revised estimate was Rs
841.22 crore.

f) Indian Institute of Science, Education and Research (IISERs)

For the year 2020-21, they have witnessed 6.51% decrease in the allocation.
Allocation for this year is Rs 896 crore whereas, for previous year, revised estimate
was Rs 500.53 crore.

g) Indian Institutes of Information Technology (IIITs)

For this year, it has been granted Rs 393.35 crore whereas, for the year 2019-20,
revised estimate was Rs 374.76 crore. Allocation has been increased by 4.96% from
the previous year.

 SCHEMES:
a) Digital India-e-learning:
It has witnessed 17.85% decrease in allocation for the year 2020-21. Rs 444.4 crore
has been granted this year whereas, for the previous year revised estimate was Rs 541
crore.

b) Research and Innovation:

 It has witnessed decrease of 9.54% in allocation from the revised estimate of 2019-20.
For this year, it has been allocated Rs 307.4 crore whereas, revised estimate for the
previous year was Rs 339.82 crore.

c) Rashtriya Uchhatar Shiksha Abhiyan (RUSA):

It has been allocated Rs 300 crore for the year 2020-21. Whereas, for the year 2019-
20, revised estimate was Rs 1,380 crore. RUSA’s aim is to improve the quality of
higher educational institutions of the state. However, it has witnessed a huge downfall
in allocation this year i.e. budget has been decreased by 78.26% from the revised
estimate of 2019-20.

d) Student Financial Aid:

It has been allocated Rs 2,316 crore for the year 2020-21 whereas, in the year 2019-
20, revised estimate was Rs 2,321 crore. Grant for this year has been decreased by
0.21% from the previous year revised estimate.

e) Higher Education Financing Agency (HEFA):

For the year 2020-21, It has been granted Rs 2,200 crore whereas in the year 2019-20,
revised estimate was Rs 2,100 crore. Allocation has been increased by 4.76% from the
revised estimate (2019-20). Canara Bank and Human Resource Development ministry
(MHRD) together promoted HEFA by granting authorised capital of Rs 10,000 crore.
HEFA has been given responsibility to mobilise one lakh crore rupees to meet the
infrastructure requirements of higher educational institutions by 2022.10

f) World class Institutions

They have been granted Rs 500 crore for the year 2020-21 whereas, revised estimate
was Rs 325 (2019-20). Allocation has been increased by 53.84% this year from the
Revised estimate of 2019-20. Further, the government has selected 8 public
institutions and 10 private institutions as institutes of eminence and each public

10
Demand for Grants 2020-21 Analysis: Human Resource Development, PRS Legislative Research
https://www.prsindia.org/parliamenttrack/budgets/demand-grants-2020-21-analysis-human-resource-
development
 institution that has been selected as an institute of eminence will be given financial
support of up to Rs 1,000 crore for the period of 5 years.11

g) Study in India
This programme aims to make Indian a preferred destination for higher education. It
has witnessed a major increase in grant for the year 2020-21 i.e. 103.11%. It has been
allocated Rs 65 crore this year whereas, in the year 2019-20, revised estimate was Rs
32 crore.

 SALARY:
a) Teacher’s salary

Salary scale of university and college teachers has been improved by 5.55% this year
as centre has allocated Rs 1900 crore for salary whereas, for the year 2019-20, revised
estimate was Rs 1800 crore.

3. CONCLUSION.
The idea behind writing this essay was to analyse and evaluate the educational sector
budget of India by comparing and studying the allocation and distribution of budgets
for the various departments, schemes and programmes. Allocation of Rs 99,311.52
crore for the Educational sector and Rs 3,002.21 crore for the skill development of
youth has been a positive growth. Also, allocation for this year has been increased by
4.69% and it constitutes 4.6% of the GDP which shows that India is doing pretty well
with its educational sector. To understand the positive and negative elements
(development) of this year budget it is better that we discuss it departments wise:

3.1 Department of School Education and Literacy.

In the educational sector budget 2020-21, centre has focused more on the Department
of School Education and Literacy (elementary and secondary education) as it has been
allocated Rs 59845 crore for this year which is 5.85% more than the revised estimate

11
Demand for Grants 2020-21 Analysis: Human Resource Development, PRS Legislative Research
https://www.prsindia.org/parliamenttrack/budgets/demand-grants-2020-21-analysis-human-resource-
development
 of 2019-20. This department is the most affected sector in India as it lacks trained
teachers and quality education because However, we must say, this year government
has put a great effort to improve the quality of education and make teachers trained as
centre has allocated Rs 110 crore for the Teacher Training and Adult education
programme and this programme has witnessed a huge increase of 514.5% in the
allocation from the revised estimate of 2019-20 (Rs 17.90 crore). There is no doubt,
with this amount a large numbers of teachers will get training and it will help in
improving the quality of education in India at elementary and secondary level.

3.2 Department of Higher Education.

The department has been allocated Rs 39,466.52 crore for this year and grant has been
increased by 2.99% from the revised estimate of 2019-20 (Rs 38,317.01 crore).
Allocation for the department has witnessed steady increase from the previous years
revised estimates. Study in India scheme has witnessed an increase of 103.11% which
is a major development of the department. However, many schemes (Digital India-e-
learning, Research and Innovation, Rashtriya Uchhatar Shiksha Abhiyan, Student
Financial Aid) and institutions (Central Universities, Indian Institutes of
Management) under the department has witnessed decrease in allocation which is a
worrisome issue because Research and innovation and development of education
digitally are important and necessary aspect of the higher education. It is not that only
technical colleges such as IITs and NITs have roles to play in development of nation,
other institutions of management, law, etc are also needs to be develop because every
subject has its own importance and value which is imperative in the development of
the society.

Overall, it is a good budget and we must applaud our government as with overall
fiscal crisis and economic downturn, one could not have expected better. However,
we still have a long road to cover in education, it is because, according to the Niti
Aayog’s report, to meet the India’s education requirements, country needs to increase
the education expenditure to nearly 6% of the GDP for the next three years which is
4.6% of GDP as of now.12

12
Prerna Sindwani, The rise in budget allocation for education is just not enough, (Jan 13, 2010, 03:59 PM),
https://www.businessinsider.in/budget/news/education-budget-2020-the-rise-in-budget-allocation-for-education-
is-just-not-enough/articleshow/73182288.cms
 4. SUGGESTIONS.

A government data suggests that, in India, nearly 250.53 million children are in the
age group of 6-15 years and are in need of a good education. 13 To meet the
requirements of such a large number of children and to improve the quality of
education and budget for higher education (Research and Innovation, Digital India-e-
learning, IIMs, central universities, etc) India needs to spend 6% of the GDP for the
next three years on education which is 4.6% of the GDP as of now. Now, the major
question arises here is, does India have capability to achieve such targets? If Yes, then
how and what are those ways by which such goals can be fulfil? Well, I will say yes,
India is capable of achieving such goals. There are many ways by which we can
achieve these targets and I would like to suggest two ways in this regard and those are
as follows:

 By keeping the educational sector at first priority.

Budget for educational sector constitutes 3% of the central government’s

approximated expenditure for 2020-21 and among all the ministries, it is the sixth
highest allocation. Government should keep educational sector at first priority and
should allocate and spend more budget into the sector as education is the most
imperative need of the society and nation. Development of education is the most basic
requirement for every nation and it is fundamental in the nation building.

 By avoiding unnecessary expenditure.

A news printed in ‘The Hindu’ says that, central government spends Rs 1,250 crore
annually on media advertisements.14 Government should avoid expenditure of such a
huge amount on media advertisements and should utilise this for educational sector.
13
Shreya Raman, What Budget 2019 can do to raise India’s plummeting quality of school education, (Jan 25,
2019), https://www.indiaspend.com/what-budget-2019-can-do-to-raise-indias-plummeting-quality-of-school-
education/
14
Special correspondent, To fight COVID-19, Sonia offers five suggestions to govt. (April 07, 2020, 05:39 PM),
https://www.thehindu.com/news/national/to-fight-covid-19-sonia-offers-5-suggestions-to-
govt/article31278193.ece
The Standing Committee on Human Resource Development (2016) suggested that to
mobilise funds in state universities government should explore other means such as
endowments, and contributions from industry and alumni. Government should avoid
or postpone construction of statue or buildings which is not necessary right now and
should utilise this money for education sector because we as a nation lacks in schools,
colleges, universities and quality education so, our first priority should be
development of education.