Govt withholds overseas scholarships due to ‘fund crunch’

According to the July 1 announcement, the ministry placed 106 candidates on its selected list and 64 on the non-selected list and rejected 270 candidates.

The ministry of social justice and empowerment has issued provisional scholarship awards to 40 of the 106 candidates selected for its National Overseas Scholarship (NOS) for the 2025-26 academic year, with a notice saying that letters for the remaining 66 candidates “may be issued… subject to availability of funds”.

The scheme has 125 slots, but the allotment depends on the availability of funds. (Unsplash )

According to the July 1 announcement, the ministry placed 106 candidates on its selected list and 64 on the non-selected list and rejected 270 candidates.

“106 candidates have been placed in the Selected list. Out of these, initially, the provisional award letters will be issued to the candidates from serial number 1 to 40,” the ministry said. It received 440 applications for the 2025-26 academic year between March and April. Non-selected means the students have not been considered in the list due to a cap of 10% state and other quotas. These students may be considered in the next list if those selected for provisional scholarships get rejected for failing to provide the required documents.

While in previous years, all students in the selected lists received provisional scholarship letters at the same time, this year the ministry has decided to disburse the letters in a phased manner dependent on availability of funds, leaving students in a lurch.

“Provisional award letters to the remaining candidates (from serial number 41 to 106) in the selected list may be issued in due course, subject to availability of funds,” it said.

To be sure, the scheme has 125 slots, but the allotment depends on the availability of funds. This means the rejections are not absolute or that the students won’t get the scholarships at all.

The NOS program, started in 1954-55, provides critical financial support to students from Scheduled Castes (SC), Denotified Nomadic Tribes (DNT), semi-nomadic tribes, landless agricultural labourers, or traditional artisan categories, with a family income under ₹8 lakh per annum.

It funds master’s or PhD degrees at the top 500 global universities (according to QS rankings), offering up to $16,920 annually for a maximum of three years (master’s) or four years (PhD). The scheme nominally provides 125 scholarships annually, capped at 10% per state.

The ministry, however, said that the award of scholarships needs approval from the cabinet committee on economic affairs.

“It is an issue with the Cabinet Committee on Economic Affairs not approving the money allocated to these scholarship schemes. We have the money, but we also need the green signal from above to give it out,” an official of the Ministry of Social Justice and Empowerment.

The uncertainty has come despite a significant increase in the budgetary allocation.

In the Budget announced in February this year, the government allocated ₹130 crore to NOS for the FY 2025-26 — a 36.84% rise from the ₹95 crore in 2024-25. By December 19, 2024, the ministry had disbursed ₹56.29 crore to 80 beneficiaries for the current academic year.

A Delhi-based candidate, ranked outside the top 40 and holding an offer for an MA in economics from a UK-based university, said: “Without issuing any communication to students before announcing the results, the ministry said it will issue provisional letters to the top 40 students. I am not among the top 40 and will not be able to get the letter even after they issue letters to the next 40 students on the list. I feel stuck and confused about whether I should apply for other scholarships or wait. Even after being selected for the scholarship, I might not be able to study abroad if I do not have enough funds, which will affect my academic career.”

Earlier, a similar disruption was reported in the Maulana Azad National Fellowship (MANF) under which over 1,400 PhD scholars have faced stalled stipend payments since January 2025.

Similarly, there was confusion over the National Fellowship for Scheduled Castes (NFSC) for June 2024, for which the list was published in April 2025.

The National Testing Agency initially released a selection list of 865 scholars in March 2025 and issued award letters, only to publish a revised list in April, drastically reducing selections to 805 and removing 487 previously chosen candidates.

Opposition leaders, including Congress’s Rahul Gandhi, have written to Prime Minister Narendra Modi urging resolution for various scholarships, but no government response has been reported. “Post-matric scholarships for students from marginalised communities are plagued by delays and failures. While I have cited examples from Bihar, these failures are widespread across the country,” the letter had said.

Experts expressed concerns about the situation.

“On one hand, India is emerging as the world’s fourth-largest economy; on the other, it lacks sufficient funds to support just 125 scholars from historically marginalised communities in pursuing overseas education. This reflects the current government’s approach to investing in the future of Dalit and Tribal scholars—the nation-builders of tomorrow. Instead of expanding opportunities, the government appears to be reducing funds and scholarships, which is deeply concerning. Our students who have admission offer letters from top foreign universities are worried about their future,” Raju Kendre, founder of Eklavya India Foundation which coaches marginalised students for scholarships, said.