Budget 2016: Focus on world-class institutes, job creation

Education sector reacts to Budget 2016 with a pinch of salt

While no announcements were made for new Indian Institutes of Management or Indian Institutes of Technology in Budget 2016, a substantial amount of stress was laid on creation of world-class institutions, enhancing quality of primary education, funding higher education and upskilling Indian youth and job creation.

Union finance minister Arun Jaitley with minister of state Jayant Sinha leaving finance ministry North Block to present the General Budget at Parliament House, in New Delhi on Monday.(Arvind Yadav/ HT photo)

“The overall allocation has unfortunately remained less than 4% of GDP (Similar developing nations have at least 6% of GDP as education allocation). The overall spend has increased from Rs 68,306 crore (revised budget 2015-16) to Rs 73,943 crore for the ministry of human resource development. The allocation for the ministry of skill development and entrepreneurship has increased from Rs 1,038 crore to Rs 1,804 crore,” says Narayanan Ramaswamy, partner and head of education and skill development, KPMG in India.

This is what Union Budget 2016 provided for the education sector

1.Enabling regulatory architecture to be provided to 10 public and 10 private institutions to emerge as world-class teaching and research institutions.

2.After universalisation of primary education throughout the country, the government wants to take the next big step forward by focusing on the quality of education. An increasing share of allocation under Sarva Shiksha Abhiyan will be allocated for this.

3.About 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years.

4.A Higher Education Financing Agency (HEFA) will be set up with an initial capital base of Rs 1,000 crore. The agency will be a not-for-profit organisation that will leverage funds from the market and supplement them with donations and CSR funds. These funds will be used for improving infrastructure in top institutions and will be serviced through internal accruals.

5.Life will be a little easier for students in higher education institutions and the workforce. They will be able to access degree certificates as a digital depository for school leaving certificates, college degrees, academic awards and mark sheets will be created, on the pattern of a securities depository. This will help validate their authenticity, safe storage and easy retrieval.

6. About 1,500 multi-skill training institutes will be set up across the country. An amount of Rs 1,700 crore have been set aside for these initiatives.

7.Proposal to scale up Pradhan Mantri Kaushal Vikas Yojna to skill one crore youth over the next three years.

8.Entrepreneurship, education and training will be provided in 2,200 colleges, 300 schools, 500 government ITIs and 50 vocational training centres through massive open online courses.

9.The National Career Service launched in July, 2015, already has 35 million jobs seekers registered on the platform. The government proposes to make 100 Model career centres operational by the end of 2016-17 and inter-link State Employment Exchanges with the National Career Service platform.

Most experts welcomed the government’s ideas and allocations made towards setting up world class institutes, 1,500 multi skill training institutes, the digital literacy mission, and a funding agency for higher education.

Prasanna TA, executive director, Ernst and Young, says, “Establishment of the Higher Education Financing Agency to fund infrastructure in top institutions could go a long way in developing India as an education hub. Budget allocations to skill development are also positive.”

However, he adds, “Expectation of a complete exemption of service tax on all services received by educational institutions (which could in turn bring down education costs) does not, however, seem to be addressed.”

Deepak Mehrotra, managing director, Pearson, India likes the idea of promoting digital literacy in rural India through the National Digital Literacy Mission, but says, “The budget lacks concrete measures towards building efficacy in the education system and making it more learner-centric. The need of the hour is to improve the quality of Indian education and focus should be on imparting faculty training, building robust assessment framework, more so at school level. The complexity of the Indian educational challenge calls for greater involvement of private sector capital and expertise. However, the budget is silent on measures to further boost private sector investment in the education sector.”

Particulars	2015-16 Budget	2015-16 Revised Budget	2016-17 Budget
Centre Allocation	33,397	31,738	37,956
Higher Education	25,700	24,344	27,585
School Education	6,153	6,357	8,567
Skill Development & Entrepreneurship	1,543	1,038	1,804
State Allocation	36,842	36,567	35,987
Higher Education	1,060	1,000	1,180
School Education	35,782	35,567	34,807
Grand Total	70,238	68,306	73,943

Source: KPMG in India