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Budget 2013: Chidambaram allocates Rs.65,869 crore for education


Feb 28, 2013

With a focus on capacity building and job-led education, finance minister P. Chidambaram Thursday proposed an allocation of Rs.65,869 crore for the sector in the Union budget for 2013-14, an increase of a little over 7% from that for the current fiscal year.

Of the total education outlay, the flagship scheme Sarva Shiksha Abhiyan (SSA) was allocated Rs.27,258 crore for implementing the Right to Education Act that promises education to all children in the 6-14 age group. The previous Union budget for 2012-13 had pegged an outlay of Rs.61,427 crore for education, including Rs.25,555 crore for SSA.

Terming education a “high priority” for the government, Chidambaram increased allocation for the elementary, secondary and higher education segments moderately. But he also announced that at least one million students could be provided Rs.10,000 each on completing skill training courses, a decision commended by both academic and industry experts.
“Skill trained youth will give an enormous boost to employability and productivity. On the assumption that 10,00,000 youth can be motivated, I propose to set apart Rs.1,000 crore for this ambitious scheme,” the finance minister said in his budget speech, following up from the Economic Survey, released on Wednesday, on employment-linked education.
Narayanan Ramaswamy, partner, management consulting and national leader, education advisory, at audit and consulting company KPMG, said that of all the education-related announcements, “attaching incentive to skill education is forward looking. They have given a policy direction.”

The National Skill Development Corp. (NSDC) said the decision will boost its efforts. “Providing an incentive of Rs.10,000 to every individual who undergoes training, coupled with the recognition given to industry-led assessment and certification, would create an aspiration value for skills and contribute significantly to ongoing efforts to ensure that India is in a position to leverage its demographic dividend,” NSDC said in an emailed statement.
Chidambaram also proposed to term corporate contributions to incubators in educational institutions as corporate social responsibility activity, which will help boost the start-up culture and indirectly create jobs.
“With incubators set up by companies in academic institutions qualifying as corporate social responsibility (CSR) activity, entrepreneurship in higher education institutions will get a major boost,” said E. Abraham, director of the Xavier Labour Relations Institute (XLRI) in Jamshedpur. “We look forward to welcoming forward-thinking organizations to set up incubators in our campus. With the economy getting more mature it is imperative that entrepreneurs are encouraged to help shape a vibrant economy and sustainable future.”

The budget also allocated Rs.49,659 crore to the school education sector that caters to over 230 million students. The sector got a moderate Rs.3,690-crore hike from the previous budget estimate. This comprises the SSA allocation, Rs.13,215 crore for the mid-day meal scheme and Rs.3,983 crore for the Rashtriya Madhyamik Shiksha Abhiyan (RMSA), a scheme to universalize secondary education and curb the high drop-out rate. “Investment in the RMSA cannot be postponed any longer,” Chidambaram said in his budget speech.
“Increased allocations for SSA and for RMSA reiterate the government’s commitment towards strengthening school education,” said Dhiraj Mathur, leader (education), PricewaterhouseCoopers India.
For higher education, the finance minister pegged an allocation of Rs.16,210 crore for 2013-14 against an allocation of Rs.15,458 crore in the budget estimate for 2012-13.
But experts were critical that the budget failed to provide any major policy direction on private- public participation in schools or promotion of private money in higher education.
“The budget talked about a 17% increase in education,” said Narayanan of KPMG. “They first cut the budget, and then compare revised figure with the budget estimate. In fact, it’s a little over 7% hike if you compare the budget estimate to budget estimate. We were expecting that in a pre-election year, education will get a huge boost but…” He was referring to the Planning Commission cutting the education expenditure by over Rs.5,200 crore from the planned allocation two months ago.

Narayanan said the focus now should be on expenditure as often the government fails to spend the entire corpus.
According to a recent report by Accountability Initiative, a wing of the Centre for Policy Research, SSA spending was only 61% in 2011-12, leading to a poor learning outcome in schools. “Now the budget is over, the (human resource development) ministry must take the right policy decisions to promote quality in schools and private funding in higher education,” Narayanan said.

Riad Joseph, tax partner, education practice, at Ernst & Young, was also sceptical. “There appear to be no specific announcements on regulatory reform, the PPP (public-private partnership) framework and incentives for the private sector,” he said.

On a positive note, the elite Indian Institutes of Technology (IITs) will get Rs.2,220 crore for 2013-14, almost double the allocation they received in 2012-13, but experts say most of the funds may go to the eight new IITs to augment their capacity.

The Indian Institutes of Management (IIMs) will get Rs.331 crore, triple the allocation of the current fiscal year. The University Grants Commission will get Rs.5,147 crore, a negligible increase of Rs.69 crore.


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