India’s Education Budget: Can the Govt Make Investments in Edtech a Priority?

The online education sector needs more focus so that strong & efficient digital infrastructure is accessible to all

4 min read
Hindi Female

A strong education system is essential for any nation and the education sector also plays a major role in the country's economy. Free and compulsory education is a fundamental right of every child in the age group of 6 to 14 years under various articles of the Indian Constitution. Education—which is in the concurrent list of the Indian Constitution, has rarely been a priority of the central or state governments.

According to the US News & World Report, India's education sector is ranked 32nd in the ranking. India's education system is in a dismal state due to the Covid-19 pandemic, schools and colleges have remained closed for almost 20 months.

Public spending on education has been relatively low in India since its inception. Even before the pandemic, public spending on education in most states was lower than in other middle-income countries. Most states spend 2.5 to 3.2 percent of their GDP on education.

Even As GDP Grows, No Incremental Rise in Education Expenditure

In 1964, the Kothari Commission recommended increasing education expenditure from 2.9 percent to 6 percent of Gross Domestic Product (GDP), but even after five decades, the country's education budget has never been more than 3.5 per cent of GDP, although in NEP 2020, it has also been reiterated that the education budget should be 6 percent of the GDP.

Now India's per capita GDP has increased five times as compared to 2005. Economic surveys suggest that education expenditure as a percentage of GDP, has been 2.8 per cent during 2014-2019 and has increased to 3 to 3.5 per cent in 2019-22.

We have missed many trains when it comes to education. Where countries like China, Japan and South Korea spent a lot in education in the 60s, our country is still awaiting a proper budget. It is high time that we invest more in education as 50 percent of our population is below 25 years of age. There is an urgent need to spend more on investment in primary, secondary and higher education as well as on schemes to skill the youth, making them eligible for the present employment opportunities.


Education is one area where investments have multiple impacts. When the workforce becomes more efficient, it boosts the pace and process of economic development. It may also help stagger social progress like nothing else.

Impact on the Job Market

Early education is important in a child's life. Therefore, it is in the best interest of each young mind to focus on a quality early childhood education program. We have one of the world's largest youth population in our country whose issues need to be addressed vigilantly.

According to a study, more than 67 percent of fresh graduates in India struggle with their placements due to lack of upskilling.

It is the need of the hour to invest the money of various 'Revdi Schemes' (freebies) running in the country and the state into the education sector. Today about 40 percent posts of teachers in higher education are vacant. According to UNESCO's State of Education Report 2021, 11.16 lakh teacher posts are vacant in schools only. In addition, teachers are burdened with a lot of non-academic workload.

According to a study conducted by the National Institute of Education Planning and Administration (NIEPA), about 65 percent of teachers' time is spent on non-teaching administrative tasks. The government should also draw its attention towards teacher training programs in its budgetary allocation, as there is a great need for teachers to be well-versed with the latest technologies. This is also emphasised in the NEP and can only be achieved through significant investment of time, effort, and money in skill development of teachers.

Infrastructure, Tech Access, Affordability Remain Major Issues

According to UNESCO's State of Education Report 2021, the availability of computing equipment in India's schools was found to be only 22% and only 15% of them had internet access. Now that classes are conducted both online and offline post Covid, the government should provide laptops and smartphones to students at subsidised rates.

India is the world's second-largest market for e-learning after the United States. Poor internet connection and inadequate infrastructure have contributed to the sector's current challenges. The Edtech sector needs more focus so that strong and efficient digital infrastructure is accessible to all. According to an Assocham survey, the cost of education in the country is rising rapidly, considering that the Goods and Services Tax (GST) on educational services should be reduced from 18 percent to 5 percent or zero. For some courses, higher education is increasingly becoming beyond the reach of the common man, today one has to pay fees up to Rs 30 lakhs for MBA from a A-grade management institute.

Fellowship should be increased in higher education, education loans should be arranged for students at a cheap rate along with the scheme of subsidies in skill-based courses which should also be introduced in the new budget. Along with the increase in the budget, it is also necessary to keep in mind what the public money is being spent on and how effectively the resources are being used.

Common taxpayers should also get tax exemption on ed-tech expenses under section 80C.

'Institutions of Eminence' and ‘Centre for Excellence’ will not be made just by naming the institutes, the government will have to allocate sufficient budget for development. It is true that the government may not be able to fund all the projects, so it is imperative for big corporate houses to identify and channelise their Corporate Social Responsibility (CSR) money in the education sector.

What’s the Future for Indian's Online Education System?

In FY20, it was predicted that India's education sector was valued at USD 117 billion; by FY25, it is projected to reach USD 225 billion. The size of the Indian edtech sector is projected to reach 30 billion US dollars by 2031, up from 700-800 million US dollars in 2021. The online education market in India is anticipated to reach USD 2.28 billion in 2021-2025, with a CAGR of roughly 20 percent.

Today, this budget is crucial for establishing a world-class educational infrastructure in the nation, upholding the right to education, promoting skills in urban and rural areas, offering equitable scholarships, and transforming India into a worldwide knowledge hub.

As India celebrates the 'Amrit Mahotsav' of Independence and the next 25 years will determine the country's fate, the budget for this year will establish the country's priorities for the future.

(Dr Brajesh Kumar Tiwari is an Associate Professor at the Atal Bihari Vajpayee School of Management & Entrepreneurship (ABVSME) & Jawaharlal Nehru University (JNU))

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