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Explain the News

Discussing Budget 2016-17 | Education

In this section, we will deal with the sector which will determine how well we use our demographic dividend – Education Sector.

Take a look at basic statistics, which will give you a larger picture about govt.’s approach towards Education, Skills and Job Creation, where the emphasis is to make India a knowledge based and productive society:

  • Allocation for education sector – Rs 68,968 cr
  • Higher Education Financing Agency to be set-up with initial capital base of Rs 1000 Crores
  • Digital Depository to be set-up for certificates, mark sheets, etc
  • Initiative to make world-class teaching and research institutions


Focus Areas

#1. School Education 

Govt. will allocate increasing share for quality improvement under Sarva Shiksha Abhiyan. 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years

#2. Higher Education

Govt. will ensure an enabling regulatory architecture to empower 10 public and 10 private institutions to emerge as world-class Teaching and Research Institutions. This will enhance affordable access to high quality education for ordinary Indians.

Benefits: Govt. seeks to stress on the importance of teaching along with recognising the role of private sector in the education sector – not all world-class institutions that emerge from India need to be publicly funded.

Read more about The State Of Affairs In Higher Education

New Initiative


Govt. will setup a Higher Education Financing Agency with an initial capital base of Rs. 1,000 crores. It will be a not-for-profit organisation that will leverage funds from the market and supplement them with donations and CSR funds. These funds will be used to finance improvement in infrastructure in the top institutions.

According to ministry of corporate affairs, education and skill development attracted 23% of the CSR spending for FY15.

Benefits: Since Banks are finding it difficult to manage the NPAs from the education loans, a dedicated agency would give the much needed thrust.

Digital Depository

Govt. will establish a Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets, on the pattern of a Securities Depository. This will help validate authenticity, safe storage and easy retrieval of these documents.

Read more about Digital India Initiatives


  • There is little to offer in terms of any concrete steps to improve the quality of elementary education
  • Teachers training does not figure in this year’s budget
  • The whole purpose of CSR is defeated if the govt lays down the agenda on what the priority areas for companies should be. It also shifts the accountability for CSR from the company to the govt
  • It seems that the Rs.1000 crore fund will be mostly used for redressal of the problems of students seeking educational loan. Also, the current outstanding educational loans are around Rs.50,000 crore, how a fund of Rs.1,000 crore will resolve the massive requirements of educational loans


There is group of secretaries proposal to phase out Sarva Shiksha Abhiyan as it currently exists and replace it with an outcome-based financing program that links 20% of the education budget to performance on outcomes

Read more about Ministry of Human Resource Development : Important Updates

PS: Please click on the green hyperlinked text to read more about the concepts. Revise and revise & feel free to ask pertinent questions.

Published with inputs from Pushpendra | Image: Finmin

Questions, suggestions and comments

  1. Palash Luthra

    You have mentioned in beginning that funds from HEFA will be used for improving infra. Then, under criticism you have said that it will be used for educational loans?

    1. Pushpendra Rana

      The fund has multifold objectives and it is argued that by experts that this fund may be cornered by education loans , thus less funding for infrastructure…

  2. Siddhartha Singh

    Please explain the outcome-based financing program.

    1. Pushpendra Rana

      Outcome based financing program means first you need to show improvement or achieve a particular target, then only finances will be provided.

      This was also recently in news with respect to World Bank finances to various state govt to various projects.

    2. Simran Bains

      Yes, someone please throw some light 😛

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