Economic Survey Highlights: India is spending just 2.7% of GDP on education

NEW DELHI: The combined education budget of both central and state governments only amounted to 2.7% of the gross domestic product (GDP) in 2023-24, data in the Economic Survey of India 2024 revealed. This is a far cry from the recommended 6% of GDP that academics and educationists have been asking for ever since the Kothari Commission recommendation in the 1960s.

The Kothari Commission, tasked to assess the Indian education system and recommend reforms, arrived at 6% after comparing with countries such as the US, Japan and erstwhile USSR, which spent considerably more than 6% on education. However, the Economic Survey 2024 shows that India has never been close to achieving this recommended percentage of GDP.

As per the economic survey, India spent 2.8% of GDP on education in 2017-28 and 2018-19; 2.9% in 2019-20 and 2020-21, and only 2.7% in 2021-22, showing a declining trend in terms of actual budget allocation as a percentage of GDP.

Although the survey does show an increase in 2022-23, in which 2.9% of GDP is allocated, this is a revised estimate and not the actual expenditure. Moreover, the budget estimate for 2023-24 showed a decline again to 2.7% of the GDP.

Careers360 had earlier reported that the Narendra Modi-led central government has been reducing allocations to higher educational institutions and nudging institutions, such as the IITs and IIMs, to increase fees or rely on loans. Budget analysis over the years have also shown that this has affected scholarships and fellowships too.

Education budget

The economic survey also revealed that education has seen a declining trend in terms of allocation as compared to other social sector budgets. In 2017-18, 10.7% of the social service budget went to education but in 2021-22 it fell to just 9%. It was also similar in the revised estimates of 2022-23 and the budget estimate of 2023-24 in which it was just given 9.2% of the social sector budget. Citing somewhat dated figures – provisional data from 2022-23 for school education, for example – the economic survey shows that less than half the schools in India have computers or internet access but enrolment, in absolute terms, of students from marginalised communities is growing.

The survey also mentioned that education will be part of a six-pronged growth strategy to grow India’s GDP at 7% every year.

“India’s education policies and skill policies should adopt a laserlike focus on learning and skilling outcomes and need to be aligned with each other, as well. We can draw lessons from global experiences on how this could be achieved, such as the EU Cohesion Policy,” the report said.

Finance minister Nirmala Sitharaman will present the budget for 2024-25 on Tuesday.