Pre-election budget disappoints with cuts to higher education

India’s higher education sector is set to experience financial constraints in the coming year, with a dramatic decline in government funding to institutions. The grant of the higher education regulator, the University Grants Commission (UGC), will be slashed by over 60% under the government’s interim budget for 2024 to 2025, released this month.

The overall allocation for higher education has been reduced from US$6.8 billion to US$5.73 billion. The cuts come ahead of general elections scheduled for May-June this year.

Presenting the country’s interim budget 2024 to 2025 on 1 February, Finance Minister Nirmala Sitharaman said the UGC’s funding had been cut to about US$301 million from the previous year’s ‘revised estimate’ of about $772 million – a substantial 61% reduction.

The UGC provides recognition to universities in India and disburses funds to recognised universities and colleges. Any reduction in UGC funding means institutions face cuts in grants. Critics argue that this, in turn, could affect students from weaker financial backgrounds.

Winners and losers

Sitharaman revealed that the country’s top business schools, the Indian Institutes of Management (IIMs), will face a decline in budgetary allocation for the second consecutive year.

Last year, the budget for the 21 IIMs was more than halved from about US$73 million to about US$36 million. This year, the budget has been further reduced to around US$25 million, part of a government drive to make them more financially self-reliant.

According to many academics, the cuts will have a greater impact on newer IIMs compared to more established ones – a dozen IIMs were established after 2010.

The biggest beneficiaries under the budget were central universities, with a 38.16% jump in their grants. Many of these universities come under the government’s ambitious ‘world class’ scheme under which they receive additional funds.

But the budget for the country’s prestigious Indian Institutes of Technology has also seen a slight decline from the previous year, reduced from about US$1.25 billion to about US$1.24 billion for the 23 institutes.

Disappointment over cuts

Students and academics expressed disappointment over the cuts, which they see as putting more of the burden on self-financing, including from tuition fees, rather than reliance on government grants.

“The budget shows higher education is not a priority sector for the government, and the budget provision and the cuts in grants could push higher education institutions towards relying on loans,” said the All India Students’ Association (AISA) in a statement.

Anand Prakash, a member of the Delhi University Teachers Association executive, said: “The budget cut affects higher education in a big way. On one side, it reduces research grants, and on the other it affects infrastructure development. Besides, other facilities which are provided to the students are curtailed.”

Under India’s National Education Policy, undergraduate studies will be four years instead of three, with a focus on research in the final year.

“While the National Education Policy has been put into action, there is a provision for inclusion of a research curriculum in the fourth year of undergraduate studies. But student research is not possible due to insufficient funding. Mere theoretical frameworks should not suffice,” Prakash said.

“This is an attempt to close down public funded institutions and promote private institutions,” Prakash claimed.

Effect on disadvantaged students

Prakash told University World News: “Colleges want to start new courses but due to inadequate funding they are forced to resort to self-financing.

“This shift to self-financing basically means students belonging to economically disadvantaged backgrounds are deprived of education,” he added. While UGC funded courses are available for INR10,000 to INR15,000 (US$120 to US$181) in tuition fees, self-financed courses are available for INR50,000 to INR80,000 (US$602 to US$964).

“This poses a financial challenge for middle class students who may find them unaffordable.”

In addition, Prakash pointed out that the government had earlier discontinued student research grants, and grants to support libraries. “Many paid journals are not coming in due to lack of funds,” he said.

AISA also said the cuts would severely impact upon students, putting higher education out of reach for those from weaker financial backgrounds and who depend on scholarships and funding to continue higher studies. “Those who would not be able to afford it could be forced to discontinue their studies,” AISA said in its statement.

Budget welcomed by some

However Ravneet Pawha, vice-president of global alliances and CEO for South Asia of Deakin University – which established a branch campus in Gandhinagar, Gujarat, last month – differed in her assessment of the interim budget.

“India’s growth as a tech-enhanced, knowledge economy is set to be achieved through inclusive, accessible and quality education and skilled empowerment from the grassroots level upwards, shored by wider research and innovation. The Education Budget (Interim) 2024 is a clear enabler of this and I welcome it,” said Pawha.

She told University World News: “The announcement of women making up 43% of total enrolment in STEM courses and a 28% increase in female enrolment in higher education is a matter of pride, as also the upskilling and reskilling of 540,000 youth and establishment of 3,000 new industrial training institutes,” she said, pointing to recent government announcements.

“It shows the scope of successfully implementing government initiatives with far reaching benefits to the community and the nation.”

Pawha added: “An increased allocation to the domain of research and innovation will boost development in strategic areas enhancing India’s global stance as a knowledge powerhouse.

“Collaboration between academia, industry and government will maximise the impact of research and development and attract increased international collaboration and investment.”

No mention of NRF in Budget

Many people in the research and science sectors were disappointed that the National Research Foundation (NRF) was not mentioned in the budget.

The NRF, a new research funding agency, was conceived to promote research and development (R&D) and foster a culture of research and innovation throughout India’s universities, colleges, research institutions and R&D laboratories. In June last year, the government introduced the National Research Foundation (NRF) Bill 2023 in Parliament. It was passed in August without debate.

According to academics and scientists, there has been little headway since then on its establishment and operations. In the interim budget the government maintained its silence on the allocation for the NRF or its progress.

According to Prakash: “No progress has been made towards establishing the NRF.”

A large proportion of the NRF’s funding is to be raised from the private sector, the government said last year.

Pawha said: “I firmly believe in positive outcomes that can be achieved through collaboration and NRF will be instrumental in forging academia, industry and government collaborations [and] boosting private sector investment in India’s R&D.

“I look forward to the long-term benefits, both qualitative and quantitative, that will surely accrue through the NRF by sharing of knowledge, expertise and resources from all stakeholders. It will successfully harness the development potential of the country in emerging [and] sunrise domains,” Pawha added.