Draft Policy Proposes Increased Expenditure On Education

Draft Policy Proposes Increased Expenditure On Education

Draft National Education Policy makes provisions for increased investment in Education


When the Draft Education Policy was released, the suggested three-language formula got all the attention leaving several other major aspects of the policy unattended. The Draft National Education Policy, which had been in the making for quite some time now, is available in the public domain for suggestions and comments. The over 400 pages policy document covers some critical area of education.

One of the salient features of the Draft policy is its inclusion of suggestions made in the NITI Aayog report, “Strategy for New India @ 75”. A key suggestion by NITI Aayog was to increase investment in Education.

Increased Investment In Education

NITI Aayog had said that the Government spending on education by both central and state governments, currently, is close to 3 per cent of GDP which is lesser than the world average (according to World Bank) of 4.7 per cent of GDP. NITI Aayog suggested that the spending on education be increased to at least 6 per cent of GDP by 2022.

The Draft national Policy envisages an increase in public investment in education from the current 10% of overall public expenditure in education to 20%, over a 10-year period.

Two important trends which are expected to support the increased investment is growth of Indian Economy to USD 10 trillion from the current USD 2.8 Trillion, and improvement in tax-to-GDP ratio.

The DNEP suggests an incremental increase in public investment, i.e. 1% increase every year for 10 years until it reaches 20% of total public expenditure.

Apart from the suggestion that Central Government’s expenditure on Education should double, the policy also suggests increase in expenditure on Education on State-level. The policy suggests that all States allocate at least 20% of their overall spends to education.

Allocation and Release Of Funds

Along with the emphasis on increased expenditure on Education, the policy has also highlighted the importance of timely flow of funds – a malady that has affected education and educational institutes for long.

“It is critical that all allocated funds are released on time by the Central and State governments, and disbursed such that the flow of funds aids on-time utilisation. Once the budgets are approved, there should not be any reason for withholding any part of the allocated funds.”

The policy stresses on the utilisation of funds and underlines that the ‘culture of utilisation for utilisation’s sake must be stopped.’

The policy, thus, makes provision for sustainable and adequate investment to develop human and institutional capacity to utilise funds appropriately.

While the provisions for investment in education are well-intended and address the issues highlighted in NITI Aayog’s report, clarity on its success will only be observed in the years to come.