Marginal higher education budget rise does not match ambitions

India has allocated only marginal increases to higher education in its 2012-13 budget announced by Finance Minister Pranab Mukherjee last week, despite a stated aim to dramatically increase the higher education participation rate from 17% now to 30% by 2025.

India’s overall education budget for 2012-13 rises by 18% over last year compared to a 24% increase in 2011-12.

Last year higher education had a massive 34% increase in its budget. But this year school education will receive the lion’s share of the education increase. Some experts expressed disappointment that the budget allocation to higher education of Rs1.54458 trillion (US$3.08 billion compared to US$2.9 billion last year) has not given the sector priority.

“The budget can be seen as a reflection of thinking, where the government does not want to announce new schemes but to focus on improving the capacity and quality of existing institutions,” said a senior education ministry official.

The budget presented on 16 March was closely watched for indications of the direction of the 12th Five Year Plan 2012-17, for which this is the first budget. The plan has already stated an aim to focus on quality and consolidation of existing higher education institutions rather than on expansion.

However, K Balaveera Reddy, former vice-chancellor of Visvesvaraya Technological University in Belgaum, said: “There is a dire need to help universities in order to improve higher education. The budget is discouraging as far as higher education is concerned.”

India's National Knowledge Commission has estimated that India needs 1,500 universities compared to around 370 now, as the gross enrolment ratio rises to 30%.

But there is no funding provision for building new universities, or for innovation in higher education, despite these ambitious targets.

According to Bhushan Patwardhan, vice-chancellor of Symbiosis International University in Pune: “Any country’s development is directly connected to an increase in the number of students accessing higher education. We need significant investment in higher education for this to happen.

“We had given several pointers to the government and we hope to see them reflected in future budgets,” said Patwardhan, who is also a member of the steering committee of the Planning Commission on Higher Education.

Narayan Ramaswamy, head of the education sector at consulting firm KPMG Advisory Services, said: “I was hoping to see some incentives to bring in private capital and private-public partnerships in higher education, to enable expansion of quality institutions. But the budget has nothing to offer on this front.”

Instead, the budget focuses on skills development of graduates and improving secondary school retention rates, with a proposed outlay of Rs10 trillion for the National Skill Development Fund to bridge the education-employability mismatch amid complaints by many employers that university graduates rarely possess the skills required for the workplace.

This would help in funding vocational institutions and sustainable skills training initiatives that can benefit millions of young people nationwide, according to Dilip Chenoy, CEO and managing director of the National Skills Development Council in New Delhi.

Mukherjee has also exempted vocational training institutions from service tax and provided tax benefits to manufacturers for costs incurred in training and developing talent.

Some experts believe the focus should be on better management of the higher education budget as weak management of projects has meant that money allocated is often either not spent or not utilised properly.

“The 12th Five Year Plan aims to invest five times more in education, but do we have the capacity to absorb the funds and utilise them?” asked Professor R Govinda, vice-chancellor of the National University of Educational Planning and Administration in New Delhi.

“Under the 11th Five Year Plan, 50% of the funds allocated to higher education could not be utilised. Even with less allocation, we need to improve implementation and usage of funds,” Govinda said.

Under the 11th Five Year Plan from 2007-12, the government announced the setting up of 51 public-funded higher education institutions – including eight Indian institutes of technology and seven Indian institutes of management.

Most of the proposed institutions have been plagued by setbacks, including delays in land acquisition, shortages of qualified faculty and, in several cases, disputes between the central government and states.