Higher educational institutions say they need assistance of a variety of companies to improve the technological skills of students in response to the constantly evolving demands of the business world.
With Finance Minister Nirmala Sitharaman set to unveil the interim budget on February 1, the Higher Education sector in India is abuzz with expectations and hopes for financial measures that will propel academic growth and innovation. Higher Educational Institutions (HEIs) want increased budgetary allocations to education for research and innovation, lower interest rates on student loans and a lower tax burden for universities.
For 2023-24, the finance minister announced a record of Rs 1.12 lakh crore as expenditure on education in the budget, Rs 8,621 crore more than the budget estimate (BE) for 2022-23 and nearly 8.26 percent more than the previous budget. The higher education sector alone received Rs 44,094 crore in 2023-24, an increase of 7.9 percent from Rs 40,828 crore (Budget Estimate) in 2022-23. However, institutes say more is required. “A 10 percent increase in funding is what we are hoping to see for higher education, particularly for private universities. Additionally, we anticipate a 20 percent increase in the amount of money allocated to higher education institutions to support incubators for startups, vocational training and entrepreneurship,” said Dr Sibaram Khara, Vice Chancellor at Sharda University.
A similar view was expressed by Professor V P Singh, Director of PGDM and Professor, Great Lakes Institute of Management, Gurgaon. “Last year, the education budget saw an increase of eight percent, but this year the allocation must be increased by at least 20 percent,” he said.
As a recommendation, Khara believes the government ought to endeavour to include as many institutions as possible in the ‘Study in India’ programme’s beneficiary group and raise scholarships and seats by 100 percent.
Approved in 2018, the ‘Study in India’ programme’s primary objective is to target foreign students by branding India as an attractive education destination. As per the existing Government framework, there is a provision of 10-15 percent supernumerary seats for foreign students.
‘Support self-funded autonomous institutions’
Educators want a major part of the corpus diverted towards supporting self-funded autonomous institutions approved by the All-India Council for Technical Education (AICTE).
To be sure, the Department of Higher Education funds all premier institutes, including their regulators, such as the University Grants Commission (UGC) and AICTE. However, in 2022, the Standing Committee on Education, Women, Children, Youth and Sports observed that student financial aid schemes were not sufficient to cover the cost of higher education. This is because most expenditure from the scholarship is towards course fees.
“Keeping all this in view, we expect the Government to earmark specific funds for self-funded autonomous institutions approved by AICTE and offer the Post Graduate Diploma in Management (PGDM) degree as these institutions have to depend totally on student fees,” said Dr Madhumita Chatterji, Director, ABBS School of Management.
‘Reduce tax burden’
HEIs said they need the assistance of a variety of companies to train students in the technological skills they need in response to the constantly evolving demands of the business world.
Educational services and products are in the 18 percent Goods and Services Tax (GST) slab. “Those services that are offered to higher educational institutions ought to be provided with tax relaxation or the tax burden should be reduced from the current 18 percent to 5 percent… Education is transforming as a result of the rise of online learning and distance education,” said Koneru Satyanarayana, Chancellor of the KL Deemed to be University, adding that the possibility of tax discounts should be taken into consideration for training programmes, camps, yoga programmes and other activities.
Meanwhile, Mahindra University called for tax incentives for educational institutions investing in research and development. “This year we are anticipating that the upcoming budget will prioritise higher education by allocating increased funds for infrastructure development, research initiatives, and skill enhancement programs. A boost in financial support will enable institutions to upgrade facilities, invest in cutting-edge technologies, and attract top-tier faculty,” said Dr Yajulu Medury, Vice-Chancellor of Mahindra University.
Student loans
The Gross Enrolment Ratio (GER) in Higher Education currently stands at 27.3 percent. In 2023, enrolment in higher education increased to 4.14 crore, crossing the four-crore mark for the first time, it was an increase of 7.5 percent from 2019-20 and 21 percent from 2014-15.
However, the Union government plans to make the GER 50 percent by 2030. To achieve the same, educators are batting for affordable student loans. Interest rates on student education loans at various banks and financial services firms range from seven percent to 18 percent.
“In the upcoming budget, one approach is for the government to provide rebates on student loans, facilitating easier access for students from financially disadvantaged backgrounds to continue their studies,” said Dr Aman Mittal, Vice President of Lovely Professional University (LPU). He suggested that the government could consider paying a portion of the interest to the banks on behalf of the students, benefiting both the government and the banks.
