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Will This Union Budget Push India as the New Destination for Foreign Students?

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The overall budget allocation in FY 2022-23 for higher education was Rs 40828.35 crore. School education and literacy saw an overall budget allocation Rs 63449.37 crore in FY 2022-23.

As the education sector is among the prime sectors for the economy, the upcoming union budget 2023 too is expected to focus on various areas. The government has already brought the National Education Policy 2020 (NEP), which proposes various reforms in school education as well as higher education including technical education.

Different stakeholders of the education space have expectations from Finance Minister Nirmala Sitharaman. From reduction of GST on electronic books to more funding for skill development and technical education, particularly for semi-employed youth.

Experts feel that more reforms and initiatives are needed to boost the sector in order to create more jobs. They said India can achieve the goals of NEP, harness demographic dividend and achieve a 5 trillion dollar economy only through proper allocation of resources and their effective utilisation.

Prof. Y.S.R. Murthy, founding vice chancellor, RV University said that the growing economy requires skilled manpower.

“We need to get our priorities right as we move towards a higher growth trajectory in the 25-year window during Amrit Kaal till 2047. There is a need to prioritise the education sector and allocate 6% of GDP to it in the interests of human resource development,” Murthy said.

In the last budget, a slew of measures were announced for the Digital DESH, Digital University initiative, One-Class-One channel through PM eVidya initiative.

“While these are welcome, we need to do a lot more if India has to become a truly digital hub of the world, just as it has become a pharmacy hub of the world,” Murthy stated.

Murthy added that as two thirds of the higher education sector is in the hands of the private sector, it is time to encourage private corporate philanthropy in a big way through fiscal and other incentives.

Citing N.R. Narayana Murthy Committee recommendations (2012), Murthy suggested contributions made by a corporate or a foundation or any other grant-making entity to a university or to a research centre or a centre of excellence (being part of a university or higher education institution) or a new university approved by the government or an approved program under a university-industry partnership, should be eligible for deduction from taxable income to the extent of 300% of such contribution.

Some experts felt that ‘Internationalisation’ of the sector is key to achieve certain milestones.

Lejo Sam Oommen, MD, ETS India, (ETS is the owner of TOEFL & GRE General Test), said, “Driven by a young demographic, India is fast becoming a talent pool for the world. The government aspires to have 25% of the global workforce to be Indian by 2047 and therefore early-stage exposure to internationalisation is key to meeting this objective.”

Oommen urged that the budget outlay must provide for ‘Internationalisation’ at state and central government universities, while also making India a destination for foreign students. Exchange programmes between global institutions and Indian universities will augur well for learners who are presently devoid of international exposure.

Some experts underlined the GST on e-books and demanded a reduction to increase the adoption and reach.

Monica Malhotra Kandhari, MD, MBD group, suggested GST on e-books to be reduced to 5%. The idea of promotion of e-books is welcome along with a concern, the input credit availed for input, capital goods and input services are charged at higher rate, resulting in excess credit lying in the books which will remain un-adjustable all the time. “It is suggested to create a mechanism to make corresponding input chargeable at the same rate,” Malhotra added.

The GST on education books are exempted with an idea to promote and make education economical, but on the other hand GST paid for input, capital goods and input services are increasing the cost of manufacturing.

“It is suggested to create a mechanism to make corresponding input/ input services/capital goods etc. either exempt from GST or start levying the GST on sale of education books to enable the manufacturer to claim Input credit.”

For technical education, K. A. Alagarsamy, director, Consortium for Technical Education (CTE), said that the budget is expected to boost funding for skill development and technical education, particularly for semi-employed youth, in order to support these efforts.

Puneet K , President, The Narayana Group, too hoped that the government will increase allocation for higher education in the budget. In 2022, the overall budgetary allocation for education is 3.1% of the GDP. We hope to see it increase to 6% as per the recommendations of the NEP.

Puneet added that the increase in funding should facilitate better infrastructure, financial aid, higher grants for research, and an investment in technologies such as AI and machine learning to improve overall quality of higher education.

The NEP aims to bring about comprehensive reforms in the education sector, including higher education. The main objective of the NEP is to ensure that everyone has access to education. A major obstacle to achieving this goal is the lack of physical and digital resources, as well as qualified teachers, particularly in rural and semi-urban areas.

“One way the government can address this issue is by encouraging private institutions to establish and operate in these regions, which would help fill the current gaps in government infrastructure. However, building physical infrastructure requires significant financial investment. To address this, the government could offer incentives such as easier access to loans, lower interest rates, and longer repayment periods,” Puneet said.

Overall, the Indian education private sector has several expectations from the government in the upcoming budget. An increase in budget allocation, the implementation of the NEP, and a pathway to a closer partnership between private industry and the government are among the key demands.

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