Impact of Union Budget 2011 on Education

Sector

The budget can have a positive impact on the employment

generation potential of education, health care, real estate and housing, infrastructure
development, logistics, telecom and the manufacturing sectors.India plans to raise its expenditure
in the education sector by about a quarter to Rs 520.6 billion (USD 11.50 billion) in the next
financial year, Finance Minister Pranab Mukherjee said on Monday in his budget speech,
reinforcing the country’s push to create a skilled workforce to keep up with fast-paced growth.
Education companies cheered the announcement and stocks of Aptech Ltd, Everonn
Education, Edserv Softsystems, NIIT Ltd rose 3 to 5% in intra-day trade immediately after the
announcement. India’s $86 billion education sector is increasingly joined by private players in its
rapid expansion, while increased government spending and fresh interest from foreigners and
large funds who are pumping in money in services, technology and infrastructure play the
catalyst.

Blended growth rate in Indian education services firms is seen at 21% this year, according to
Thomson Reuters StarMine smart estimates, outstripping the 18% growth forecast in the
information technology sector.Blended growth rate is the average of expected growth in earnings
per share from last year to this year and from this year to next year along with the expected long-
term growth rate.

The government will also infuse as much as Rs 2 billion each in Indian Institute of Technology,
Kharagpur, the nation’s premium engineering institute, and Maulana Azad Education
Foundation, apart from other grants to various institutions.

One of the prime challenges for India’s surging growth is severe skills shortage — spanning all
levels, from management to frontline operations, and all sectors, from IT to fast food– , which
along with inadequate infrastructure and poor governance could mar the India story.

The government will also invest as much as Rs 210 billion in Sarva Shiksha Abhiyan, its
elementary education programme.
he Union Finance Minister, Mr Pranab Mukherjee, has allocated Rs 52,057 crore for education
sector in union budget 2011 -12. This amount will be used for some very ambitious projects like
universalising secondary education and ensuring growth in number of students pursuing
professional education.

Mukherjee announced this while presenting the union budget in Lok Sabha, "I propose an
allocation of Rs. 52,057 crore, which is an increase of 24% over the current year.".

Scholarship for SC/ST Students

Government has also planned a special scholarship program for the students of class 9th and 10th
belonging to SC/ST category. Mukherjee said, "In 2011-12, I propose to introduce a scholarship
scheme for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in
classes ninth and tenth. It would benefit about 40 lakh Scheduled Caste and Scheduled Tribe
students.". Central Government already run several scholarship programs for SC/ST students at
higher education level, but this project for school students will ensure a growth in professional
education.

Government has raised fund for Sarva Shiksha Abhiyan by 40% as compared with the current
year, and around Rs 21,000 crore will be allocated for it.

To harness the country's " demographic dividend" , finance minister Pranab Mukherjee has announced a
substantial increase of 24 per cent in the education sector .

He also kept the upcoming assembly polls in mind, doling out " special grants"  for educational
institutions in West Bengal, Kerala and Tamil Nadu - Rs 200 crore for IIT-Kharagpur, Rs 20 crore for IIM-
Calcutta, Rs 100 crore for Kerala Veterinary University, Rs 20 crore for Rajiv Gandhi National Institute of
Youth Development are some of the prominent sops.

Allocations to achieve the objectives of the Right to Education (RTE), which has been aligned with the
Sarva Shiksha Abhiyan, were hiked from Rs 15,000 crore to Rs 21,000 crore. While this is targeted at
strengthening elementary education, the Centre is now focusing on " vocationalisation " of secondary
education, which will enable students to pursue job-oriented courses at the plus two level.

Even as the overall social sector funding has seen a hike of 17 per cent, the human resource
development (HRD) ministry's allocations have gone up to Rs 52,057 crore from last year's Rs 43,836
crore.

Mukherjee has also taken steps to increase retention of SC and ST students in Classes IX and X by
introducing a prematriculation scholarship.

With HRD minister Kapil Sibal ushering in major reforms in higher education, an allocation of Rs 50 crore
has been made to this end. The UGC's allocation has gone up by 26 per cent as its budget rose from Rs
3,626 crore to Rs 4,556 crore. The government has made a separate allocation of Rs 10 crore to set up
374 " model degree " colleges in the states. Investment in technical education has been hiked by 32 per
cent.

Funding for the eight new IITs was hiked by 100 per cent to Rs 500 crore from Rs 250 crore last year.

Investment in the seven new IIMs has more than doubled from Rs 25 crore to Rs 60 crore. But most of
last year's funds could not be spent by the new management institutes and was later scaled down to Rs
13 crore.

Mukherjee also announced setting up of a centre of Wardha's international Hindi university in Kolkata at
a cost of Rs 10 crore.

Murshidabad, Pranab's home district, gets Rs 50 crore to set up a centre of Aligarh Muslim University.
With the UPA government stressing on skill development to equip the 70 per cent population that will
constitute the labour force by 2025, Mukherjee promised to pump in Rs 500 crore to the National Skill
Development Fund.

" Hike in real terms for RTE is marginal, not 40 per cent. Rs 4,000 crore was pumped in after last year's
Budget... it has gone up by only Rs 2,000 crore,"  an HRD ministry official said.

24 % increase in the budgetary allocation for the education sector interest poll

Blackboard to ballot

West Bengal

Rs 200 crore one-time grant to IIT-Kharagpur

Rs 50 crore for Aligarh Muslim University centre at Murshidabad

Rs 20 crore for IIM-Calcutta to set up its Financial Research and Trading Laboratory

Rs 10 crore for the Kolkata centre of the Mahatma Gandhi Antarrashtriya Hindi Vishwavidyalaya.

Kerala

Rs 100 crore one-time grant to Kerala Veterinary and Animal Sciences University at Pookode

Rs 50 crore for Aligarh Muslim University centre at Malappuram

Tamil Nadu

Rs 20 crore for Rajiv Gandhi National Institute of Youth Development