Budget 2023: Reduction in taxes, Investment in academic databases, expect management institutes

As the day of unveiling Union Budget 2023 is approaching Budget expectations from all corners are pouring in. Education experts demand an increase in Gross Enrolment Ratio in higher education to 50% by 2035, a significant reduction in taxes on educational programmes, and more. Let us look at some of the major Pre-budget expectations shared by education experts.

Union Budget 2023 Expectations: Finance minister Nirmala Sitharaman will present the Union Budget 2023 on February 1. Considering last year’s allocations for higher education institutions, particularly ones offering MBA, Indian Institutes of Management (IIMs) received an allocation of INR 653.92 crore. Budget 2022 recorded an approximate upward inclination of 37 per cent as compared to Budget 2021’s INR 476 crore. With the allotment of over INR 1 lakh crore to the two departments of the education ministry, the budgetary allocation witnessed 11.86 per cent jump, i.e. INR 11,053.41 crore, last year.

In 2022, IIMs’ Gross Budgetary Support (GBS) received INR 323 crore, more than double of 2021 financial budget allotment. However, the ministry has decreased interest under HEFA Loan by 44 per cent, i.e. INR 50 crore.

As the day of unveiling Union Budget 2023 is approaching Budget expectations from all corners are pouring in. Education experts demand an increase in Gross Enrolment Ratio in higher education to 50% by 2035, significant reduction in taxes on educational programmes, and more. Let us look at some of the major Pre-budget expectations shared by education experts.

50% Gross Enrolment Ratio by 2035

Dr V P Singh, Professor of Economics, Great Lakes Institute of Management, Gurgaon said, "One can’t expect much from the Union Budget for the higher education sector. It lacks the financial muscle to make any significant change. Total receipts of the government, excluding borrowings, for 2022-23 is estimated to be around INR 23 lakh crore and expenditure around INR 39 lakh crore. Spending over 35 crore Indian households spreads it too thin. However, the government does have intent to make significant change.”

He further added, “This adequately reflects through the policy changes and the rapid increases in the number of seats for admission. The major spending has to come from the private sector and there is huge demand. Good B-Schools generally receive not less than 5,000 applications against say 240 seats availability, implying a demand of more than 20 times the available supply. With such supply the higher education market is certainly a sellers' market. Add to this the fact that last year 11 lakh Indian students travelled abroad for higher education. A rough estimate of the expenditure comes out to be INR 2.4 lakh crores. By 2024, this expense is expected to reach INR 6.4 lakh crore. Indian B-schools keep cribbing about the quality of students they get.”

Dr Singh went on to state that why do not Indian B-Schools get these students? This represents a huge market. Are these students who travel abroad inferior? Should not be. Government has to increase the Gross Enrolment Ratio in higher education to 50% by 2035. That is why it is giving approvals of higher intake in both offline as well as online courses. Are Indian institutions ready to absorb this demand? Government does not feel so and that’s why it is letting foreign universities open their centres in India. Instead of waiting for the government to do something it is time that the private sector gears for capturing the huge demand."

Investment in academic databases, journals and books

Sharing his views on Pre-budget expectations, Sri Bharat Mathukumilli, President of GITAM and founder of Kautilya School of Public Policy said, “In the Union Budget 2023-24, we expect a budgetary fillip to be provided to all areas within India's education sector. The Budget committed last year to the education sector was 2.6%.

The expectation is that at least 3-3.5% of the budget will be allocated to be spent on education, if not 6%. There is an urgent and important need to transform the education system. The government has the desire to increase the gross enrollment ratio (GER) in higher education to 50%. However, the institutions that are fueling this growth are largely private institutions. On the contrary, the support they get is very limited.”

"Speaking of intellectual capital, such as access to academic databases, journals and books, if India could invest in them at a national scale and make them available to institutions, it will go a long way in transforming the ecosystem. In addition to this, if low-cost funds could be made available to institutions committed to excellence, by the government, the institutions will be able to grow much faster,” he added.

More allocation for infrastructure, integrated learning

Dr. Netra Neelam, Director, Symbiosis Centre for Management and Human Resource Development talked about her Pre-budget expectation. Dr Neelam said, “Management graduates should be enabled to create jobs rather than seek jobs by venturing into startups. Thus, increasing support through conducive policies to encourage the startup ecosystem can be a positive step in this direction. Moreover, tax reduction on education loans will enable in reduction of NPAs due to default in loan re-payments by students. Also, an increase in the budget for education infrastructure with an emphasis on integrated learning will help implement the new education policy in a robust manner.”

Reduction in taxes on educational programmes

Anish Srikrishna, CEO, TimesPro shared his Pre-budget expectations stating, “The year 2023 will be a watershed moment for India's EdTech and Education sectors, and a progressive education budget can propel the country's growth and development. However, this must be drafted with the critical aspects of Accessibility and Affordability in mind. As a result, we anticipate two outcomes in this year's budget - 1.) Significant reduction in taxes on educational programmes from the current 18%. It will ease the burden of millions of learners seeking a better future through skilling and upskilling programmes, thereby influencing employability and employment. 2.) A budgetary incentive for NIRF 100 and the Institutes of Excellence to run high-quality online learning courses with the help of the private sector and through optimal utilization of the recently launched 5G mobile services.”

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