budget 2021

Budget 2021: Endeavors Digital Infrastructure

Budget 2021: Allocates 6% of GDP to Education

In the aftermath of the COVID-19 pandemic, the Union Budget 2021 announced today, is the first ever paperless budget – a shining illustration of the strong uptake of digitalization in the past year. In particular, 2019 proved to be a game-changer for the education industry, with online learning replacing conventional teaching in the classroom, giving a significant boost to education technology. The government allocated Rs 99,300 crore to the education sector in the Union Budget 2020, with a renewed emphasis on skills building for young people, higher education and the implementation of the New Education Policy (NEP). Public expenditure on education, however, is only 4.6% of GDP, lower than most developed nations.

Budget 2021’s Key Points for Education Sector

  • 1,00 Sainik Schools will be founded. In the tribal areas, 750 Eklavya schools will be set up.
  • Under NEP 2020, over 15,000 schools will be strengthened.
  • For central higher education institutions in various cities such as Hyderabad, a ‘umbrella’ structure will be established.Finance Minister Nirmala Sitharam announced the qualitative enhancement of more than 15,000 schools under the National Education Policy (NEP). While presenting her third post-COVID-19 pandemic Union Budget 2021, she added that 100 new Sainik Schools will be created and other frameworks will be created for higher education.
  • She further added that under NEP 2020 Centre will set up higher education in Ladakh and proposed to set up a central university in the union territory.

The New Education Policy unveiled last year, envisaged an increase in government education spending from 10% to 20% by 2030, with an emphasis on supporting higher education, bridging the gender, social and economic gap. Guidelines for the implementation of this inclusive strategy, in particular for the allocation of funds to different fields, such as higher education institutions, the emphasis on K12 and STEM education, and the bridging of the digital divide between Tier 1, Tier 2 and Tier 3 cities through the mass deployment of technology in the education sector, are highly anticipated as of Budget 2021.

It is hoped that through increased investment in ed-tech, NEP would further enhance integrated, experiential and immersive learning while enhancing vocational training, non-academic education and improving skill growth to increase India’s employability ratio. India will take part in the 2022 PISA Test and, for the second time after 2009, will be part of the evaluation, ranking 72 out of 73 countries. Improving the ranking will help improve India’s confidence among OECD members and help it demonstrate its objective of achieving an efficient and equitable education system that is at par with global standards.

India’s current public spending on education is about 4.4% of its GDP. With the combined contribution of Centre and State governments, this needs to be slightly increased to 6-7 per cent of GDP. Similarly, if we want to give due importance to science, investment in research and innovation, which currently accounts for approximately 0.8% of GDP, needs to be increased to at least 2% of GDP. Another important factor that the forthcoming budget needs to discuss is FDI in education. In order to take full advantage of technological advances, FDI is necessary.

In local and regional languages, NEP also targets a lot of content production, which includes internet connectivity and FDI can be a capable differentiator. According to Prof Mahadeo Jaiswal, Director of IIM-Sambalpur, the Union Budget 2021 should provide guidance on the ‘NEP implementation plan’ and further enhance the emphasis and expenditure in edu-tech to boost experiential and immersive learning and reinforce the process of skill creation at par with global education standards.

FDI in Education

Manit Jain, Chairman, co-founder and director of FICCI ARISE, argues that it is not prudent to expect government funding to come in full and called for improving FDI education standards. It will be an optimistic hope to see that this comes exclusively from government and strictly philanthropic programs in order to meet the objective of average investment of $173 billion a year to achieve SDG 4 by 2030. In this context, we welcome the government’s measures to improve quality education by facilitating the sourcing of foreign commercial loans and FDI. “We hope that this will pave the way for opening up and formalizing the industry and ensuring long-term responsible and patient capital, giving potential investors the much-needed confidence to invest in the sector and expecting legitimate RoI as discussed several times in the past,” he said.

Research Requires Refocus

“The National Research Foundation, which was proposed as part of the National Education Policy, is a very important and innovative step to bring together all arms of government-funded research,” said Prof Mahesh Panchagnula, Dean (Alumni and Corporate Relations), IIT-Madras. I would like the finance minister to take action on this request from the National Research Foundation.

In general, the foundation of our development is science. It’s the fuel that’s going to take us straight down into the 21st century. It is critical that this budget, at the height of the growth period, provides and promotes research support. In India, the private sector needs to be encouraged to step up and finance research from their own money (OR) by motivating them to invest more research on CSR. In building a really innovative, young India, each of these would go a long way,” he said.

More focus on Digital Infrastructure

In India, 2020 has modified the fundamentals of learning. The key cornerstone of the democratization of education is technology, which can build strong societies. It has played a vital role in making the change, especially in high-speed internet connectivity cities and towns. Nevertheless, due to the lack of affordability, infrastructural problems in the form of internet connectivity and mobile and PC penetration have proven to be a significant roadblock in the adoption of online learning in many parts of India.

The need for the hour is digital technology in classrooms, basic devices for learners to access online education through PCs, tablets and cell phones, as well as seamless internet connectivity. We are hopeful that these will be delivered by the forthcoming budget and bring hope to students and teachers in small-town India, says Vamsi Krishna, Vedantu CEO & Co-founder.


“The Budget proposals for 2021-12 rest on six pillars: health & well-being, physical & financial capital & infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation & R&D, Minimum Govt & Maximum Governance,” Sitharaman said before presenting the first set of Union Budget 2021.

In terms of education, the COVID-19 pandemic forced schools and colleges to shut down and online learning methods could be one of the disastrous years in 2020.

The government earmarked Rs 99,300 crore for the education sector last year. They also launched a New Education Program (NEP) to universalize education from pre-school to secondary education. The government declared in this strategy that students would not be required to learn any special language.

The ’10+2′ system will also be replaced with the ‘5+3+3+4’ model. It recommends a multi-disciplinary 4-year bachelor’s degree with numerous exit opportunities in an undergraduate program. These will include vocational and professional sectors.

Not only this, the government updated the policies for future teacher and teacher education in NEP 2020. A minimum of a 4-year Bachelor of Education is required to become a teacher by 2030. The teacher selection process will also be made clear.

About Gauraangi Ramani

Gauraangi is a journalism student from Jai Hind College who also writes poetry and does theatre. She is an And All Publishing writer who regularly conducts research on education based topics.

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