In a move towards realizing the increasing aspirations of young India, the government, for the year 2016-17, has earmarked 28,840 crore for the department of higher education under the human resource development (HRD) ministry, as against 26,855 crore in 2015-16, registering a significant increase of 7.4% over the previous year.

However, the budget has reduced plan funds for higher education to 14,428 crore in its revised estimates (RE) for fiscal year 2015-16, as against 15,855 crore in its budget estimates (BE ), a decline of 9.9%. There is a well- intended and concerted focus to improve higher education by the government, but the share of the HRD ministry’s department of higher education of the total central plan outlay has come down from 2.54% in 2015-16 to 2.15% in 2016-17; budgetary allocations for higher education as a percentage of total education has continued to be only around 39%.

This has to be seen in the context of the changing demographic structure and increased enrolment in elementary and secondary education, which essentially requires more investment to be made in higher education to meet the demand for a skilled workforce and progression of school graduates.

The proposed Higher Education Financing Agency (HEFA), with an initial capital base of 1,000 crore is a step towards improving the infrastructure of educational institutions. Even though it will be a non-profit organization, it will leverage funds from the market and supplement them with donations and corporate social responsibility (CSR) funds. Therefore, its operative and regulatory mechanisms are crucial to ensure its stability and check the burden.

In the context of reduction of the plan outlay (BE) of student financial aid from 2,373 crore in 2015-16 to 2,220 crore in 2016-17, the HEFA needs to be studied more carefully to analyse its strengths.

The gross enrolment ratio (GER) in higher education has doubled from around 11.6% in 2005-06 to 23.6% in 2014-15, according to the provisional report of the All India Survey on Higher Education 2014-15, with 33.3 million students enrolled in 2014-15 as compared to 14.3 million in 2005-06. But it lags much behind the global average of 30%. Despite many attempts to improve the access and outreach, social disparity persists in higher education. For instance, GER for the male population is 24.5%, while for females it is 22.7%. For Scheduled Castes, it is 18.5% and for Scheduled Tribes it is 13.3%.

The increase in enrolment calls for improvement in the quality of education, which is in a dismal state. To improve the standard, among many other factors, the quality of teachers is crucial. The Pandit Madan Mohan Malviya National Mission on Teachers and Teaching aims to look at teacher education in a holistic manner, to strengthen the institutional mechanism in a single continuum covering school to universities and to create synergies among the various related initiatives.

However, the plan allocations to this umbrella scheme have been reduced to 60 crore in the 2015-16 RE as against 90 crore in 2015-16 BE. It is indeed a welcome step that the BE (plan) in 2016-17 has been increased to 165 crore, which is likely to help in improving the quality of teachers, attracting talent into teaching and investing in infrastructure related to innovative teaching.

In a situation when more than 94% of the workforce in India has no technical education and merely 8% in rural and 30% in urban areas have general education of higher secondary and above, more emphasis on technical education is likely to play a crucial role in fuelling the government’s well-intended initiatives such as Skill India, Make in India, Digital India and Jan-Dhan Yojana.

This needs to be supplemented with the skill development initiatives. But we see a reduction in the plan grant (2015-16 RE) to the ministry of skill development and entrepreneurship by 33%. The increase this year is only by 13%. In the budget speech, it was mentioned that the National Skill Development Mission has imparted training to 7.6 million youths. It is indeed very progressive and to improve it further concurrent evaluations of these initiatives should be made. The proposal to set up 1,500 multi-skill training institutes and to link the National Board for Skill Development Certification with the industry and academia is likely to fill the skill gap and will attract more pupils into higher education.

This budget is very crucial at a time when the government is finalizing its “New Education Policy", which envisions making India a knowledge superpower. To realize it, we need to develop a focused and multipronged strategy, which again requires increased expenditure on education. And the latter remained stagnant at about 3% of gross domestic product (much below the recommended 6% by the Kothari Commission in 1966) and about 11% of total expenditure over the past six years (Economic Survey 2015-16).

Higher education is a feeder to the workforce and to make India the “human resource capital of the world" in its truest sense, to reap the demographic dividend and to ensure access, quality and equity. Increased expenditure along with sustained focus and interventions will enhance the productivity of the workforce, improve welfare of the population and yield higher economic outcomes.

Sharmistha Sinha and Kalaiyarasan are, respectively, deputy director at the National Institute of Labour Economics Research and Development and assistant professor at the Institute for Studies in Industrial Development.

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