Budget 2020-21: FM Sitharaman pegs Rs. 99,300 crore for education sector

Under the ‘study in India’ programme, the government will introduce INSAT exam to enroll Asian and African students in Indian universities


Budget 2020 increased the allocation for the education sector by 5 per cent to Rs 99,312 crore in FY21. Of this, the department of higher education has been allocated Rs 39,466 crore while the school education and literacy department was given Rs 59,845 crore.

“By 2030, India is set to have the largest working-age population in the world. Not only do they need literacy, but they need both job and life skills,” said Finance Minister Nirmala Sitharaman in her Budget speech.

Government may explore external commercial borrowings and foreign direct investment for funding the education sector and attract key talent, FM Sitharaman said in her budget speech. Right now, 100 per cent FDI is allowed in the education sector.

By 2030, India will have largest working age population and government will work to provide required skills for them to get into jobs, FM added. For the skill development ministry and its various programmes, an allocation of Rs 3,002.21 crore has been proposed for FY21 compared to Rs 2,531.04 crore in FY20.

The finance minister said that dialogue had been held with state education ministries, members of Parliament and other stakeholders about the new education policy and that it would be announced soon.

Sitharaman also added that the education system needed a higher inflow of finance to attract talented teachers, innovate and build better labs. In the higher education sector, in particular, the outlay for the improvement of the salary scale of teachers has been hiked from Rs 1,800 crore in FY20 to Rs 1,900 crore in FY21.

India’s expenditure on education has increased in the last six years
Budget Estimate FY20 (In Rs. crores) Budget Estimate FY21 (In Rs. crores)
School Education & Literacy 56537 59845 
National Education Mission3629238860
Mid-day meals in Schools991211000
Higher Education3831739466
Salaries of Teachers18001900
Grand Total9485499312
Skilling and employability

Related to education is the issue of employability of students. Budget 2020 has said that students in the general stream need their employability improved.

“About 150 higher educational institutions will start apprenticeship embedded degree/diploma courses by March 2021,” said the finance minister.

Further, the government will also start a programme whereby urban local bodies across the country would provide internship opportunities to fresh engineers for a period up to one year.

Not all students are able to access higher education facilities. For this, a degree level full-fledged online education programme will be started.

“This shall be offered only by institutions who are ranked within the top 100 in the National Institutional Ranking framework. Initially, only a few such institutions would be asked to offer such programmes,” said Sitharaman.

Study in India

India should be a preferred destination for higher education, said the finance minister. Hence, under its ‘Study in India’ programme, Sitharaman said that a new examination Ind-SAT was proposed to be held in Asian and African countries.

This is similar to the SAT examination used globally for taking admission-related decision for students. The examination will be used for bench-marking foreign candidates who receive scholarships for studying in Indian higher education centres.

A total of Rs 65 crore has also been allocated for ‘Study in India’ in FY21 compared to Rs 32 crore in revised estimate FY20.

Specialised Training

A National Police University and a National Forensic Science University are being proposed in the domain of policing science, forensic science, cyber-forensics.

Similarly, when it comes to healthcare, Sitharaman said that there was a shortage of qualified medical doctors, both general practitioners as well as specialists.

“To meet this requirement, it is proposed to attach a medical college to an existing district hospital in PPP mode. Those states that fully allow the facilities of the hospital to the medical college and wish to provide land at a concession would be able to receive Viability Gap Funding,” she added.

In her Budget speech, the finance minister said that there exists a huge demand for teachers, nurses, paramedical staff and caregivers abroad. However, their skill-sets, many a time, do not match the employer’s standards and therefore need to be improved.

“I propose that special bridge courses be designed by the Ministries of Health, Skill Development together with professional bodies to bring in equivalence. Language requirements of various countries also need to be included. All these should be achieved through special training packages,” she added.


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