The new education policy (NEP 2020) laments that the public expenditure on education is “nowhere close to the 6% of GDP, as envisaged by the 1968 policy, reiterated in the policy of 1986, and reaffirmed in the 1992 review of the policy”. It is good that the new policy realises the importance of public provisioning and funding of higher education and pledges that the Centre and states would work together to increase public investment in the education sector to reach the oft-repeated target.
The NEP 2020 feels compelled to unequivocally endorse a substantial increase in public investment in education, despite its emphasis on enhancing and strengthening the role of the private sector in providing higher education. Speaking in the context of higher education, the NEP 2020 envisaged that it would promote increased access, equity, and inclusion through greater opportunities for outstanding public education. It also assured that the autonomy of public institutions would be backed by adequate public funding.
It may be hoped that this policy prescription would be acted upon urgently. So far, the expenditure on education has remained stagnant as a percentage of Gross Domestic Product (GDP) at 2.9% during 2019-20 to 2022-23. Besides the Education Departments, other Ministries and Departments of the Central and State governments also spend on education. Taking those into account, the expenditure on education works out to be about 4.39% of GDP as of 2019-20 (Budget Estimates).
Expenditure on education as a percentage of the total expenditure of the Centre and States has also declined from 10.7% in 2019-20 to 9.5% in 2022-23. The share of education in social services, at the same time, has nosedived from 42.5% to 335.5%.
Notably, the expenditure on education by the states has risen from 2.94% of GDP in 2010-11 to 3.27% in 2019-20 (BE), while the expenditure on education by the Centre has declined from 1.11% of GDP in 2010-11 to 0.98 in 2018-19, though the revised estimate enhanced it to 1.12% in 2019-20. Considering the criticality of higher education, particularly in the context of the focus on the knowledge economy, it ought to get at least an equal share in the public expenditure on education, a minimum of 2% of GDP.
Against this backdrop, higher education has been the worst victim; the combined expenditure on higher education by the Centre and states has plunged from 0.86% of the GDP in 2010-11 to 0.52% in 2019-20. Worryingly, the Centre’s expenditure on higher education has dropped from 0.33% of GDP to 0.16% during the corresponding period. So has been the case with the expenditure on higher education by the states which slid from 0.53% to 0.36% of GDP during the same period.
Education being in the concurrent list of the Constitution is a joint and shared responsibility of the Union and states. Coordination and maintenance of standards in higher education, however, fall squarely under the domain of the Union government. Quite naturally, it is expected to become a role model for the states in terms of quality and funding. Sadly, it falls short of the expectations.
Contrary to the general argument that allocation for higher education is constrained by the availability of funds with the central government, data proves otherwise. Juxtaposing the expenditure on higher education against the revenue receipts as well as the total receipts of the Union government shows that a rise in the receipt is no guarantee for enhanced allocation for higher education.
During 2011-12 to 2022-23, the revenue receipt of the Union government grew from Rs 7.51 lakh crore to Rs 22.04 lakh crore. The total receipts too increased from Rs 13.07 lakh crore to Rs 39.44 lakh crore. Data reveals that the central government’s expenditure on higher education, during the same period, slipped from 2.60% of its revenue receipts to 1.85%. As a share of the total receipts as well, the expenditure on higher education declined from 1.49% to 1.04%.
Against this backdrop, the unequivocal commitment of the policy to substantially increase public investment by the Centre and states is not without reasons and justification. The new policy spotlights that the enhanced level of public funding is “extremely critical for achieving high-quality and equitable public education system that is truly needed for India’s future economic, social, cultural, intellectual progress and growth”.
Higher education in India is already highly privatized, catering to about two-thirds of the total enrolment. Most private higher educational institutions are run on a self-financed basis, a euphemism for full-cost recovering institutions. Besides, private tendencies have also penetrated deeply into public higher education.
Thrust for resource mobilisation, internal revenue generation, cross-subsidisation, resource-use efficiency, cost-reduction, accelerated cost recovery and enhanced user charges may further exacerbate the trend. The most obvious consequence would be a substantial increase in fees and other charges from students.
The idea that higher education could be funded fully or substantially by the students themselves is grossly misplaced in the Indian context. The proponent of full cost recovery from students often cite examples of public and private universities in the US.
Its universities, barring a few exceedingly elite ones, recover a maximum of $10,000 a year. This works out to be one-eighth of the per capita income of the country. India’s per capita income is presently Rs 1.70 lakh, one-eighth of which works out to Rs 21,250. Most universities in India recover much more than that from their students.
The nation now aspires to double the Gross Enrolment Ratio (GER) in higher education, raising it from 27.3% at the present to 50% by 2035. Considering the fact that the social and economic elites, the rich and the affluent, have already attained a GER of 100%, the future growth in higher education shall come from, what the NEP 2020 prefers to call, the Socially Economically Deprived Groups (SEDG). Would these people be able to afford full-cost recovery from their higher educational institutions?
Furqan Qamar, former Adviser for Education in the Planning Commission, is a Professor, Department of Management Studies at Jamia Millia Islamia, New Delhi. Views expressed are personal.