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What Union Budget 2022–23 Offers for Education?

In the Middle of Hope and Crisis

The fund allocations of the Union Budget 2022–23 to education are analysed in the context of the devastating impact of the COVID-19 pandemic on the education sector and the implementation of the National Education Policy, 2020.

The Union Budget for 2022–23 was presented in Parliament with a total outlay of `39.45 lakh crore on 1 February 2022. The budget outlay for education was `1.04 lakh crore, which is 2.6% of the total budget. The union government has increased the total allocation on education for 2022–23 by `16,000 crore than the budget estimate of 2021–22, which was `93,224 crore. There is a general rapture that the budget for education has gone up significantly, which would help the sector meet its challenges. Is this the case? What does the increased outlay on education signify? In which level and components have more money been allocated, and why? How should we interpret the budget figures for education when the state is geared towards implementing the targets set in the National Education Policy (NEP), 2020? More importantly, is the current outlay in education going to meet the new crisis the education sector is facing amid the COVID-19 pandemic? These are some of the questions that are still not clear to many, if not all. This article aims to address some of these concerns using the information from the Union Budget 2022–23 for education and the latest secondary data on public funding for education using economic surveys and other secondary data sources.

For a long time, the argument has been to increase the public funding for education, producing a wide set of externalities for the economy and society. Edu­cation, widely considered as a public good, contributes significantly to economic growth, reducing poverty and ine­qualities, cultural advancement, poli­tical maturity, strengthening civil society, social progress and human development (Tilak 2018). Recognising the critical role of education for India’s socio-economic progress, the education commission (1964–66) recommended allocating 6% of the national income to education. However, this target has not been achi­eved so far as India currently spends less than 4% of its gross domestic product (GDP) on education, the NEP 2020 terms it as unfortunate and unequivocally endorses and envisions a substantial inc­rease in public investment in education to reach the target of 6% of GDP at the earliest. The policy considers the public investment in education as extremely critical for achieving the high-quality and equitable public education system that is truly needed for India’s future economic, social, cultural, intellectual, and technological progress and growth. Moreover, the NEP 2020 has taken several bold moves that need huge public investment in education. Some of the targets are: universalisation of school education, that is, achieving 100% gross enrolment ratio (GER) in preschool to secondary level by 2030, achieving 50% GER in higher education by 2035, provide vocational education to 50% of learners by 2025, to name a few. In short, we keep emphasising allocation of more public money for education since independence, but in practice, it is far from reality.

The education budget for many countries, particularly in low- and lower-middle-income economies, has been declining since the onset of the COVID-19 pandemic1 (Al-Samarrai et al 2021). And this is the case when the disruption to education caused by the pandemic infli­cted the worst education crisis on record, globally. India, like many other countries, closed its schools and higher education institutions as part of its strategies to compact the pandemic. For the last two years, starting from March 2020, almost all educational institutions have been closed. The costs of closing educational institutions have been imm­ense; even the magnitude of the shock is still not fully understood. The only alternative used to minimise the learning disruptions for school and college-going students is “remote learning.” Several studies have discussed the issues and challenges of remote learning in India, including the digital divide, effectiveness and quality of remote learning, competencies of the teachers to teach in digital mode, etc (Rahman 2021; Tilak 2021). Prolonged school closures are going to result in a significant learning loss for students. A study by the Azim Premji University in January 2021, covering 16,067 children in five states, reveals that the learning loss in language is as high as 82% in primary education and 92% in mathematics. India is already facing a huge learning crisis (in fact, the NEP 2020 acknowledges this and mentions that currently about 50 million schoolgoing children have not attained foundational literacy and numeracy), and the COVID-19-related school closures are forcing it even further off-track to achieving the learning goals. Tilak (2021) argues that there is an urgent need for making heavy investments in education to overcome the education crisis caused due to the pandemic. Several newer forms of necessities, like the provisioning of digital devices, remedial education, and addressing specific educational needs of the disadvantaged children have come to the fore as a result of the pandemic, and addressing these needs need additional investment in education. In this context, it is important to look at the union budget’s focus on education and how it addresses the ongoing crisis in the sector.

Table 1 exhibits that public investment in education (union and states taken together) increased from `3.54 lakh crore in 2014–15 to `6.21 lakh crore in 2020–21 (RE), an increase by 1.75 times in nominal prices. Allocations to education in 2021–22 were `6.97 lakh crore, which is 3.1% of the GDP—half of the target of 6% of GDP, a target made 55 years ago, that is, in 1966. Likewise, the priority accorded to education by the union and the state governments out of the general budget and social sector expenditure provides gloomy pictures. Public expen­diture on education as a percentage of social sector expenditure has declined from 46.1% in 2014–15 to 36.6% 2021–22. The share of expenditure on education to the total public expenditure has also reduced from 10.8% to 9.7% in this period. In the following section, we have discussed the union budget for education in detail.

While there is an increase in the total budget outlay by the union government in the last decade (and it has crossed `1 lakh crore for the first time in 2022–23 budget), the share of allocations of the education sector to the total budget outlay has reduced between 2015–16 and 2022–23.
It has reduced from 3.75% in 2015–16 (actual) to 2.64% in 2022–23 (budget estimates). Likewise, there has been a decline in the allocations to education as a proportion of GDP—from 0.49% in 2015–16 to 0.40% in 2022–23. Both of these figures clearly show the decline in the relative importance given to the education sector in the overall budget of the union government in recent years. Also, an increased outlay of `16,000 crore in the recent budget (the budget estimate of `1,04,277 crore in 2022–23 union budget as compared to the revised estimate of `88,002 crore in 2021–22 union budget) may not be a cause for celebration. With such a low-level of public funding, how the education sector is going to recover the learning losses that it has suffered due to the pandemic remains a big question. Due to prolonged school closures, the learning loss among children is paramount, and this loss is estimated to be the highest among socio-economically disadvantaged groups (SEDGs) who largely access government schools (World Bank 2021). Similarly, increased public funding is critical to implement several policy goals set in the NEP 2020, which was adopted in July 2020. In the discussion, we relate the current level of public funding on education with two important and contemporary issues: (i) the devastating impact of the COVID-19 crisis on the education sector, and (ii) implementation of the targets made in the NEP 2020.

Expenditure by Education Levels


School education: The closing down of schools and replacement of the physical classrooms with “online education” has widened the existing inequality in educational opportunities, since the students belonging to the underprivileged sections, who are mainly enrolled in government sch­ools, suffered the most (Narwana and Gill 2021; Tilak 2021; World Bank 2021). The digital divide is glaringly evident in India, with millions of children left behind during the shift to remote learning amid the pandemic. The recently relea­sed Annual Status of Education Report (ASER) data shows that while smartphone ownership for enro­lled children has increased, it varies significantly with households’ socio-economic status. For instance, 52% of families where both parents have completed Class 5 (low parental education) have at least one smartphone at home, while this figure is 82% in families where both parents have completed at least Class 12 (high parental education) (Pratham 2021). Furthermore, the phase-wise reopening of schools in the country has brought several new challenges, both for schools and parents. For instance, the schools might find difficulty in addressing the specific needs of the disadvantaged groups who have suffered the most due to pandemic-led school closures. Teachers might need to arrange for remedial classes to minimise students’ learning gap, which needs extra public investment in government schools. Similarly, govern­ment schools may need additional funding to bring the newer health and safety regulations into practice.

On comparing the budgetary provisions for school education in 2022–23 (BE) with the figure for 2021–22 (RE), it is found that there is a rise in these allocations to `63,449 crore from `51,970 crore—an increase of `11,479 crore (Table 3). There is a marginal increase in the share (out of the total budget) of union government expenditure on school education, from 59.1% to 60.8%. Of the total budget allocations to school education in 2022–23 (BE), `50,694 crore is allocated for transfer to state/union territories which comes around 80%. This figure was `40,577 crore in 2021–22 (RE). The proportionate share of states/union territories vis-à-vis that of the union has increased from 78.1% in 2021–22 (RE) to 79.9% 2022–23 (BE). Given the declining revenue generation in many states, specifically due to the COVID-19 pandemic, the extra transfer of res­ources to states would certainly help to improve their education sector.

The union budget allocation to school education is done under two major head­ings—schemes and non-schemes. Further, the budget for schemes is allocated under centrally sponsored schemes (CSS) and central sector schemes; and the non-schemes allocations are made under aut­onomous bodies and establishment. Inte­restingly, there is a substantial inc­rease in the allocations on schemes in 2022–23 budget—from `40,863 crore in 2021–22 (RE) to `51,052 crore in 2022–23 (BE). The budget share on schemes to the total budget on school education increas­ed from 78.6% to 80.5% (Table 5). Moreover, the increase in the budget for schemes is largely for CSS vis-à-vis central sector schemes. Overall, the relative priority to these schemes has been increased in the current union budget, and it is expe­cted that this increased all­ocation would bring qualitative improvements in the implementation of CSSs. For instance, midday meal (MDM) scheme has been disrupted since the school closure in March 2020 amid the pandemic, and this scheme should be normalised with the additional funding.

Higher Education

In 2022–23, the budgetary allocation for higher education has gone up by `4,796 crore as compared to the revised estimates of 2021–22. The total budget for higher education is `40,828 crore in 2022–23 budget, while it was `36,032 crore in 2021–22 (RE). The budget share for higher education to overall education budget is 39.2% in 2022–23, which is less than the previous year’s share of 40.9% (Table 3). Table 6 provides a det­ailed break-up of the 2022–23 union budget for higher education.

In 2022–23 (BE), `2,043 crore is earmarked for transfer to states/union territories, acc­ounting for 5% of the overall budget allocations to higher education. There is a significant increase on this head in this year’s budget as compared to 2021–22 (RE)—from `800 crore to `2,043 crore. However, the difference between BE and RE is huge in 2021–22 on this head. The budgetary allocations for states/union territories in 2021–22 were `3,010 crore, but only about `800 crore was spent on it. The spending share on states/union territories to the total higher education budget was merely 2.2%. However, more funds must be provided to the states for improving the quality and equity in higher education as a majority of the universities and colleges in India are managed by state governments. The union government initiated CSS like the Ras­h­triya Uchchatar Shiksha Abhiyan (RUSA) in 2013. The major objective is to provide strategic funding to ensure physical infr­astructural and human resources to enh­ance the quality of education in universities and colleges. How­ever, the decline in the resources, as noted above, would delay the attainment of desirable results, more particularly amid the pandemic-related disruptions in higher education.

The allocations for the union sector schemes/projects in 2022–23 budget are `5,412 crore, which constitute 13.3% of the total allocations for higher education. Allocations to this head in 2021–22 (BE) were `6,069 crore. But as per the revised estimates of 2021–22, `4,411 crore was spent on central sector schemes/projects. Budgetary allocations for its sub-sectors, such as higher education sche­mes, student aid programmes (like post-metric fellowships) and research and innovations provide some interesting insi­ghts. For instance, only `219 crore is allo­cated for research and innovation component, which is 0.5% of the total budget for higher education. This is the case when the NEP 2020 targets explicitly to create a robust ecosystem of research in higher education institutions. Likewise, there is a decline in the budgetary allocations on student financial aid in 2022–23 as compared to the revi­sed estimates of 2021–22, that is, from `2,089 crore to `2,078 crore. Overall, the union budget’s largest priority in the higher education sector is the “other central sector exp­enditure” (81.1%). Within this head, the allocation went mainly to autonomous bodies (68%), followed by statutory and regulatory bodies (13%), and these are largely capital expenditures. Thus, to overcome the pandemic-led crisis and the implementation of the NEP 2020, the central government should increase its allocations to higher education significantly.

Financial Aid for Students

The “student financial aid programme” in higher education has been a game changer, providing enrolments to socially underprivileged sections in various tertiary-level educational degrees and diplomas in government and private ins­ti­tutions. Some studies show that the probability of enrolling and continuing in higher education increases with financial assistance to the students (Monks 2009; Glocker 2011). However, the budgetary allocation for this important component has seen a decline in the recent year’s budget, compared to the previous year—from `2,089.3 crore in 2021–22 (RE) to `2,077.9 crore in 2022–23 (BE) (Table 7). The subcategory-wise patterns in the budgetary allocations exhibit that the allocations have been increased in two heads—Prime Minister research fel­l­owship and scholarships for college/university students. Budget allocated to these two heads are `200 crore and `253 crore, respectively. Currently, less than 1% of the total expenditure on higher education is spent on scholarships, and this is the case when there is stark inequality in access to higher education among different socioeconomic groups. For instance, inequalities in participation in higher education between the rich and the poor are considerable in India, and more importantly, it has widened over the years (Tilak and Choudhury 2019). Intriguingly, the policy aims to earmark a suitable government funding for the higher education of SEDGs, emphasising the merit of students bel­onging to socially and economically disadvantaged groups. Thus, an earmarked share of money should be kept for scholarships in higher education to make the system egalitarian and inclusive, a target made in the NEP 2020. Also, given the challenges students face in accessing quality education amid the COVID-19 pandemic, provisioning of more scholarships would enable several students to access and retain their work in higher education. The government should allocate more funds on scholarships for the students, even at the undergraduate level, as a majority of the students do not ­access higher education after Class 12 due to financial constraints.

Budget for Digital Education

The onset of the COVID-19 pandemic has accelerated the need to apply technology in education worldwide, and India is not an exception to this. Due to the closure of educational institutions amid the pandemic, a range of remote-learning modalities such as online platforms, television and radio programming, and take-home print packages are being used to support students’ learning. However, the public provisioning of educational technology is limited in India. Of the total schools in the country, only about 41.25% have the availability of computer facility, and 39.88% have functional computers. Quite surprisingly, only about 24.51% of schools have access to the int­ernet (MOE 2021). Furthermore, we find a clear gap in the access to computers and the internet between government and private schools. For instance, close to 10% of government sch­ools have access to the internet, while this figure is 30% for privately managed schools in India. Access to digital techno­logy at the household level also varies significantly. The ASER 2021 shows that 63.7% of en­­ro­lled children have a smartphone at home—it is 63.7% for government school­going children and 79% for private schoolgoing children. The analysis of the latest National Sample Survey Office (NSSO) education round data (2017–18) reveals that a significant portion of the students accessing higher edu­cation in India do not have access to digital devices. Of the total students enrolled in higher education, only about 30% have access to computers (including desktops, laptops, palmtops, tablets, etc), at home—with stark socio-economic and regional variations. For instance, the availability of computers at home is 17.1% for rural students and 45.2% for urban students. Likewise, students from rich households have 4.9 times higher access to computers than their poor counterparts. It is argued that the inequality in access to educational technology for the students from socially and economically disadvantaged groups will leave them behind in terms of educational and professional opportunities.

In this context, it is important to analyse budgetary allocations for imparting digital education. There is a considerable increase in the budgetary allocations for digital education as compared to 2021–22 budget—`400 crore in 2022–23 (BE), a whopping hike of 4.78 times compared to `84 crore in 2021–22 (RE) (Table 8). Nevertheless, budget allocation for 2021–22 (that is, `150 crore) and the revised estimates (`84 crore) indicate a failure to utilise 44% of the funds allocated. The previous trends underscore the apprehensions as to whether the `400 crore allocated for 2022–23 would be utilised fully or not. The major focus of the budget speech on education was about digital learning, and it ranges from establishing a digital university providing quality education through “digital teachers,” perhaps a terminology used for the first time in the context of the Indian education system. Given the pandemic, increasing access to digital education is a welcome step, but we should think about the long-term strategies. The state is grossly mistaken that learning gaps can be bridged with remote learning such as teaching through television channels. Students from low-income families and first-generation learners consider classrooms and informal spaces in educational institutions as a unique learning space, particularly in building their social and cultural capital that improves their wellbeing. While the recent policy focus on digital learning may provide short-term solutions to the ongoing teaching–learning crisis, in the long term, the ­focus should be on teacher recruitment, teacher training, building school infrastructure, provisioning of remedial coa­ching, etc. And, bringing improvement in these areas need significant public funding. How­ever, budgetary allocation for teacher training is reduced significantly in 2022–23 compared to 2021–22 from `250 crore to `127 crore.


Although the union government has increased its educational budgetary outlay for 2022–23 (BE) by `16,000 crore in nominal prices vis-à-vis the revised estimates, its share to the overall budget is only about 2.64%. Likewise, the expenditure on education as a share to GDP is around 3%, and we are far from the target of spending 6% of GDP on education. And, this is the picture when the country is geared for imp­lementing the NEP 2020 that has made several promises that need huge public investment in education. Also, the education sector is currently facing the worst crisis, and to recover from this, it needs additional funding. For instance, given that schools are now reopening, it was extremely crucial that additional funding be provided to government schools, particularly to implement newer health and safety regulations and to implement remedial teaching–learning initiatives to address the learning gaps and losses that the country’s underprivileged schoolchildren are experiencing. The pan­demic has highlighted the need for more teachers, training for teachers, and better infrastructure so that learning in the areas where digital resources are scarce is not disrupted even if a pandemic hits us again.

However, the budget has not outlined any specific plan for addressing the pandemic-led losses in the education sector that occurred in the last two years. Specific allocations to the education sector for minimising the disruptions due to the pandemic would have been a welcome step. Now, at the global level, there is an attempt to find a path to recovery from this crisis, and India should also join this initiative, else it would be a huge and irr­eversible loss to our economy and soci­ety. Also, India is geared towards imp­le­menting the NEP 2020 that aims to create a new system that is aligned with the aspirational goal of 21st-century education. And, it is well argued that to achieve the targets made in the NEP 2020, huge public investment in education is needed. Overall, there is an urgent need to inc­rease public investment in education, which is critical for promoting national development.


1 The World Bank and UNESCO undertook a study in order to understand the short-term ­impact of the COVID-19 pandemic on education budgets in 2021, and the information was collected from a sample of 29 countries across all regions, including India.


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Azim Premji University (2021): Loss of Learning during the Pandemic, Bengaluru.

CABE (2005): “Financing of Higher and Technical Education, Report of the CABE Committee,” NIEPA, Central Advisory Board of Education, New Delhi.

Glocker, D (2011): “The Effect of Student Aid on the duration of Study,” Economics of Education Review, Vol 30, No 1, pp 177–90.

MoE (2021): “Unified District Information System for Education Plus (UDISE+) 2020–21,” Ministry of Education, Government of India.

Monks, J (2009): “The Impact of Merit-based Fin­ancial Aid on College Enrollment: A Field Experiment,” Economics of Education Review, Vol 28, No 1, pp 99–106.

Narwana, Kamlesh and Angrej Singh Gill (2021): “Making Quality Education Accessible to All: Policy Perspective on School Education in Punjab,” COVID-19 Pandemic and Economic Development, S Singh, L Singh and K Vatta (eds), Palgrave Macmillan, Singapore, pp 181–93.

Pratham (2021): “Annual Status of Education Report 2021,” Pratham, New Delhi.

Rahman, A (2021): “Using ‘Students’ Experience to Derive Effectiveness of COVID-19-Lockdown-Induced Emergency Online Learning at Undergraduate Level: Evidence from Assam, India,” Higher Education for the Future, Vol 8, No 1, pp 71–89.

Tilak, J B G (2008): “Education in 2008–09 Union Budget,” Economic & Political Weekly, Vol 43, No 20, pp 49–56.

— (2021): “COVID-19 and Education in ­India: A New Education Crisis in the Making,” Social Change, Vol 51, No 4, pp 493–513.

Tilak, J B G and Pradeep Kumar Choudhury (2018): “Inequality in Access to Higher Education in India Between the Poor and the Rich,” India Social Development Report 2018: Rising Inequalities in India, T Haque and D N Reddy (eds), New Delhi: Oxford University Press, pp 187–202.

World Bank (2021): “The State of Global Education Crisis: A Path to Recovery,” A Joint UNESCO, UNICEF and World Bank Report, Washington, DC.


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Updated On : 19th Jun, 2022
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