The Union Budget attracts a lot of media attention, as it sets the mood of the people as they prepare to enter the new financial year. In the higher education sector, the overall sentiment post Budget 2023-24 has been positive.
However, it appears to some that when compared to the allocation of ₹653.92 crore the previous year, financial support for the Indian Institutes of Management (IIMs) has been reduced to almost ₹300 crore. IIMs receive financial assistance under the capital head for the development of infrastructure (buildings and other physical property) with Cabinet approval. For a limited period, recurring funds are also made available. No more funds are awarded to the IIMs under that head after the project is finished (as approved by the Cabinet) and because of this, the IIMs’ budget provisions are limited to a bare minimum, sufficient to pay the remaining grants’ balances with the permission of the Cabinet.
Likewise, some commentators argue that there is no mention of allocation for the Higher Education Funding Agency (HEFA) in the Budget document. As of now, the government has invested ₹48,12.50 crore as equity in HEFA. Canara Bank, the HEFA’s banking partner, has also contributed ₹481.25 crore in equity. Loans of up to ₹52,937 crore can be awarded to various higher education institutions by using this equity of ₹5,293.75 crore. There is no requirement for further fresh equity until this equity is completely leveraged. Because of this, the HEFA equity provision for FY 2023–2024 has been left at zero and can be increased when needed.
Some quarters spoke about the lack of provision for IMPRESS (Impactful Policy Research in Social Science) scheme and MOOCs (Massive Open Online Courses) in the Budget. To begin with, the IMPRESS scheme was approved for use up to March 31, 2021, and it has since been implemented to promote social science research in higher education institutions. Unless a third-party evaluation is done to assess its effectiveness, there is no point in further provisioning. Further, MOOCs and e-Shodh Sindhu (e-SS) are no longer distinct programmes. They are combined as separate elements of the NMEICT and have been adequately provided for.
Has allocation declined?
Finally, some are of the view that there has been a decline in the allocation for higher education to ₹50,094 crores in 2023-24 from ₹55,078 crores in 2022-23. To understand the actual context, we will have to go into the accounting of it.
In line with the prevailing mechanism, Cess Funds are included twice in the Gross Budget Allocation. The “Transfer to Reserve Fund” amount is subtracted once from the Gross Budgetary Allocation to arrive at the Net Budget Allocation, also known as the Actual Budget Allocation.
Only the Education Cess (MUSK) has decreased and, as a result, it appears that the Gross Budget Allocation has decreased as well. The Actual Budget Allocation increased from ₹40,828.35 crore (FY 2022-23) to ₹44,094.62 crore (FY 2023-24) and this is the actual budget that will be made available to the Department of Higher Education for use during the fiscal year 2023–24.
In conclusion, an increase in the allocation every year is a common expectation of almost every industry or sector but a lot more goes into the art of effective budgeting, which also aims to optimise the development opportunities within the existing constraints, thus requiring the use of dynamic reallocation techniques as well, while still aiming for as much expansion of the allocation of funds to the key sector, as is possible.
The Union Budget and its impact on the education sector is definitely a step in the right direction and checks the right boxes.
The writer is Director, IIM Indore