Declining Government Expenditure for Education, Skills and Jobs in Budget 2021-22: Stronger Push for Privatization at the Cost of greater Socio-Economic Equalities

Narender Thakur & Vaishali

The Budget Speech 2021-22 by India’s Finance Minister adds on to the current regime’s determination in further weakening public funding in the education sector as well as lowering government expenditure for skill-development and job-creation. Lower public funding promotes greater participation of private players in the education sector and ignores challenges of increased socio-economic inequality due to digital divide and higher unemployment during Covid-19 pandemic. The Budget talked about improving quality of education but cited the opening of 100 Sainik schools and selecting mere 1500 schools to be role model of improved quality in school education. The declining trend in expenditure in education further reflects the state’s increasing preference for non-government agencies (NGOs) and private players in education who are only concerned about securing their profits. This leads to increasing inequality. Thus, Budget 2021-22 has turned out to be an accelerator for neo-liberalism and neo-conservatism.

The Finance Minister mentioned two important pillars for creation of human capital formation in her total classified 6 pillars in Budget Speech 2021-22: 4th pillar as Reinvigorating Human Capital and 5th Pillar as the Innovation and R&D to expand the knowledge base of Indian economy in 21st century. But the central government expenditure in school and higher education shows negative growth rates in 2021-22 Budget Estimates in comparison to 2020-21. As Figure 1 shows that Department of School Education experienced -8.3% growth rate in its central government expenditure and -2.8% growth rate by the Higher Educational government expenditure in the Budget 2021-22, reflecting -6.1% growth rate in the total government expenditure on education sector.

Many commentators are calling it an unusual or unexpected budget, especially in context of ongoing Covid-19 times. Budget 2021-22 however claims to address the existing economic and health crises by adopting peculiar ways of getting away from investing in social sectors and welcoming greater investment from private stakeholders.

Figure 2 shows that absolute aggregate central government expenditure on education in 2020-21 was Rupees 99312 crores which declined to Rupees 93224 crores in 2021-22, showing a decline by 6.1% growth rate over the period. The decline is greater in the case of school education, as the absolute aggregate expenditure since 2019-20 witness fall from Rs. 59845 Crore in the year 2020-21 to Rs. 54,874 in the year 2021-22. The expenditure in higher education also shows a decline in the budget from Rupees 39,467 crores in 2020-2021 to Rupees 38,351 crores.

This budget follows the objectives of the New Education Policy (NEP)-2020 for catering all with lower quality standards by adding on another layer of quality mirage, under which state aims at developing ‘model schools’- and leaving other schools to imitate the model schools. The budget speech talked about opening 750 Eklavya residential schools in tribal areas. How would the central government manage to stratify schools with more layers with reduced public funding remains to be seen. Similarly, in higher education, Budget 2021-22 aims at adding on just one university to the existing higher education institutions. Setting up one centralized agency in higher education system to Higher Education Commission of India – HECI and replacing the existing body-University Grant Commission (UGC), is viewed as a step at ensuring standard-setting, accreditation, regulation, and funding. 

The budget allocation for job-generation and skill-development has also declined continuously from Rupees 5609 crores in 2019-20 to Rupees 5372 crores in 2020-21 and further to Rupees 3482 crores in 2021-22 by -35% growth rate, showing a higher negative growth rate of government expenditure over the period. This reflects apathy of the central government for job-creation and skill development especially in the times of highest job losses in Covid-19 pandemic. The central government is missing the opportunity to ensure higher human capital formation via expanding skill-formation and job-creation to build India as a global knowledge economy in 21st century.

These negative growth rates and declined absolute budgets in central government expenditure in school, higher education and skills would complement the New Education Policy (NEP) agenda to expand the process of privatization, which ultimately hampers the equity and social justice principles in the Indian education sector. Moreover, the process of centralization and neo-conservatism would also expand in Indian education sector. This could be understood from the promotion of Sanik schools via private players and non-government organization (NGOs) as well as setting up the centralized agency via replacing the University Grants Commission (UGC) proposed in the Indian higher education -HECI. Thus, Budget 2021-22 promotes privatization in Indian education sector with lower public funding, which may ultimately increase more socio-economic inequality in Indian society.

Narender Thakur University of

Vaishali National Institute of Educational Planning and Administration,