However, they were surprised over the move as utilisation of resources by the school education and literacy department during the fiscal was good.
The education sector got a hike of about 18% in the budgetary allocation for the next fiscal with a plan outlay of Rs. 61,427 crore in which 22% increase was announced for the Sarva Siksha Abhiyan (SSA).
Now, with the 7% reduction, the SSA programme will be hit by about 20%, they said.
The sources said budget for higher education sector has also been reduced by about 13%, which had got Rs. 15,458 crore.
On the issue of burden accrued to the states following the cap on subsidised cylinders for the mid-day meal programme, they said the finance ministry has assured to compensate the states in the coming budget.
It has suggested that the increased burden till then could be met through the internal resources.
Minister of state for HRD Shashi Tharoor had earlier informed Lok Sabha that additional burden on account of withdrawal of subsidy on LPG would be reimbursed to states and Union Territories.