Agency for student finance a good move by Jaitley

There was one thing that was top of my wish list for education: An agency for student finance. The details are awaited, but of all the things where education meets the budget, this was one that has been overdue for decades. This budget has delivered. 

The statement in parliament that no student would lose out on higher education due to a paucity of funds has to be one of the foundation stones of a humane and ambitious country. Yes, a lot needs to be understood - is this merely an administrative agency for consolidating schemes and scholarships? If just that, I would be disappointed but it could redeem itself by at least building accessibility and outreach for students. 

Even if just a single window for accessing student finance, this would be a step forward. 

But it could be so much more - a refinance (loan insurance) agency for banks for easier student loans, an incentive scheme to improve retention and improve the Gross Enrolment Ratio in higher education, and more. This is a budget that has delivered on the first step to enable education for each student who wants to progress and was constrained by circumstances.

The budget is not meant to be a statement of accounts for the education sector, nor is it meant to announce new education schemes. What it does is to announce and allocate funds so that schemes can be implemented successfully. 

Regular operations, as well as the MHRD’s list of new schemes (announced recently upon its 200 days of operation) needs to be funded within this allocation, or via state budgets. The spend on education has nominally been cut to just over Rs. 68,000 cr. from last year’s estimate revised to just over Rs. 72,500 cr. with school funding being reduced and higher education budgets raised.  

Meanwhile the recent Finance commission’s devolution of more monies to the states puts the onus of spend on education, especially schooling, back on to the states, given that education is a concurrent subject. Subsuming the 2% education cess is a strong signal about the shareable pool of resources and its uses.

This is going to be an interesting negotiation during the year, since state budgets in education are already stretched and the Centre has been a strong input into local funding of education. For example, many state governments have been negligent in making the payments for the 25% quota arrogated to the weaker sections under the RTE Act while others have quietly being protesting this imposition.

This budget is now clearly putting the new model of federalism to the test via funding of education. 

The new IIMs and IITs are going to be a challenge - there is neither funding nor the regulatory regime that allows for good quality faculty to be grown, imported, and retained. Each of these institutions will take over a decade to seed, and while it is good to be able to serve a larger population by spreading out over more states, it also comes at a time when recruitment numbers for both engineering and management courses are falling in many states.

Both these institutes stand for quality education that deliver globally employable cadres. But this quality was established at a time when their leaders had autonomy and the faculty engaged in seminal research of global standards if not impact. They are underserved in every respect which makes it easy to anticipate a dilution in quality. 

Skills have been the good news story of this budget. Digital vouchers for the rural training and employment scheme are a significant step forward and put the power of choice and chance squarely in the hands of learners while holding them to an employability goal. This must be scaled up sooner rather than later.

The National Skills Mission is finally in place, ready to cut through bureaucratic and inter ministerial red tape to get to the real issues in skilling. The challenges there are manifold but this is key to the Make in India ambition of the current government. To link this to entrepreneurship, and to simultaneously support small businesses via the Rs. 20,000 cr.

MUDRA Bank, the Rs. 1000 crore SETU (Self Employment and Talent Utilisation) mechanism and the Rs. 150 cr Atal Innovation Mission clearly shows the ability to connect the dots and steer towards a clearly focused goal. Education is best served in creating opportunities to apply it, and to earn. Each of these creates stronger incentives to learn than merely increasing lecture room capacity. 

Upgrades have been announced across the board - 80,000 secondary schools and another 75,000 junior/middle schools; Indian School of Mines in Dhanbad to become an IIT and more. This is essential to a culture of continuous improvement that must form the bedrock of progressive education. The University of Disability studies in Kerala is a welcome upgrade - hopefully a serious effort to be inclusive. 

The promises made in this budget are measured and reasonable, even as they seem to be a bit less ambitious than they could have been. There is little recognition or incentive given to the private sector despite excellence in schools and professional education, nor is there mention of PPPs or partnership agencies for foreign investors in education.

There is little about Digital India and inclusive education - a vital tool to scale and reach for India. Again, almost nothing about Community Colleges, Further and Lifelong Education - essential for an ambitious nation that looks beyond the lower echelons of employability.

This is a budget that speaks for the achievers and doers in education, creating opportunities for those who are willing to try - but does it create room for those of us who need a second chance for success? As ever, the test of a budget is going to be in its impact and its ability to deliver what was promised. By promising the basics, by keeping the new promises realistic, the Finance Minister has delivered a nearly risk free budget for education.