Rethinking the Flow of Funds: The National Education Policy and Direct Benefit Transfers

Summary: In India, the National Education Policy (NEP) 2020 aims for all primary children to achieve basic reading and math skills by 2025. Despite increased funding in the Union Budget 2024-25, many Indian children are still overlooked. Discover how direct benefit transfers can transform education and ensure every child’s success. Join Vagmi Sharma and Nitesh Anand as they uncover surprising insights and bold solutions.

Union Budget, NEP, and FLN targets: How are we Faring? 

Today marks four years since the National Education Policy (NEP) 2020 came into existence. It emphasizes achieving universal foundational literacy and numeracy (FLN) skills at the primary level by 2025. Aligning with Goal 4 of the 2030 Agenda for Sustainable Development, the policy aims to develop essential cognitive skills, making FLN in primary schools crucial. Over 5 crore Indian elementary school students currently struggle with basic reading, addition, and subtraction. This underscores the urgency of achieving FLN by 2025.

The 2024-2025 Annual Budget reflects this urgency. Indian Finance Minister Ms. Nirmala Sitharaman allocated Rs 1,20,627.87 crore to the education ministry. Of this, Rs 73,008.1 crore is for school education and literacy, and Rs 47,000 crore is for higher education. The NEP highlights that achieving FLN is vital for educational reform. It relies on the effective functioning of the school education and literacy department. Despite the increased budget from Rs 68,804.85 crore in 2023-2024 and the higher allocation to school education over higher education, a cautious approach is necessary.

Reducing bureaucratic control and fostering private sector solutions could enhance educational outcomes more effectively than excessive government spending and intervention. Policymakers must recognize the urgency and significance of FLN. They need to act decisively to support this fundamental goal, ensuring every child in India has the basic skills needed to succeed. Empowering the students, their parents and communities to take charge of their educational needs is key. It is also imperative to note that the budgetary allocations have historically been directed towards Indian children enrolled in government schools, while the 46% of Indian school going children, who attend private schools (majority of them at low-fee budget private schools) are often overlooked. The critical question for FLN targets would remain evasive if the budgetary allocations continue to exclude this significant group of Indian children. Unfortunately, the Union Budget for FY 2024-2025 continues to disappoint.

The Case of NMMSS: A Missed Opportunity in Educational Funding 

The current approach to supporting the Department of School Education and Literacy, particularly through the National Means-cum-Merit Scholarship Scheme (NMMSS) and the PM POSHAN scheme, desperately needs a compassionate overhaul. While these programs aim to support economically disadvantaged students, their execution, riddled with stringent eligibility criteria and academic benchmarks, is leaving many deserving children behind.

Picture a bright young student with dreams of a brighter future, only to see those dreams shattered because they fall short of an arbitrary academic threshold. These conditions, while intended to ensure merit, create significant barriers for the very children who need the most support. Those already struggling due to systemic failures in the education system are further penalized by rigid performance thresholds and income caps. The bureaucratic red tape is not just a financial burden but a moral one. The substantial administrative costs, annual state-specific exams, creation of Technical Support Groups, super checks, physical verifications, third-party audits, and regular trend identification systems drain resources and foster corruption and inefficiency. These layers of bureaucracy stifle the potential of our nation’s children.

The average per capita expenditure on education by states in India for the fiscal year 2022-2023 was approximately Rs 5,300. These funds were transferred directly to schools, leaving students and parents as passive recipients of educational services. This system makes schools accountable only to the government, not to the people they are supposed to serve. It’s a system that undermines the very essence of education—to empower and uplift. If our funding model were effective, there would be no need for NMMSS, which will continue until at least fiscal year 2025-2026. This reliance on direct benefit transfer schemes underscores the urgent need for a funding model that puts children and their families at the center. Imagine a system where financial transfers go directly to beneficiaries, creating a direct accountability relationship between schools and parents. This would ensure better use of resources and improved educational outcomes, fostering a dynamic and inclusive educational landscape.

A direct benefit transfer-centric system would transform the lives of millions of children by:

1. Increasing parental involvement and choice, allowing parents to select the best educational option for their children.
2. Enhancing market competition, incentivizing schools to improve services to attract enrollments.

Moreover, we must recognize that the majority of private school-going students attend low-fee budget private schools. These students often come from middle and lower-middle-class families, where the investment in education is a significant financial burden. The costs associated with these budget private schools, though lower than elite private institutions, are still substantial for these families. By excluding these students from schemes like NMMSS, we are ignoring the financial struggles of families who make tremendous sacrifices to ensure their children receive a quality education. Universal foundational literacy and numeracy cannot be achieved by denying support to students in private schools. The Department of Education must recognize its responsibility to every child in India, regardless of the type of school they attend.

Indian policymakers must recognize the critical need for a shift towards a more efficient, inclusive, and compassionate funding model. By prioritizing direct benefit transfers to students and their families, we can ensure that every child in India has the opportunity to pursue their dreams and reach their full potential. This approach will not only address current inefficiencies but also lay the foundation for a more equitable and dynamic education system in India. It is time to put our children first and create an educational system that truly serves them. A direct benefit transfer model that empowers parents and fosters competition among schools is essential for creating a vibrant and effective educational landscape. The government’s role should be to facilitate this model, ensuring that every child, regardless of their socio-economic background, receives the quality education they deserve.

Every child deserves a chance to dream, to learn, and to thrive. Let us not bind their potential with unnecessary constraints. Instead, let’s empower them with the freedom to choose, the support to succeed, and the opportunity to shine. It is our moral duty to create an education system that recognizes and nurtures every child’s potential, regardless of their background. The future of our nation depends on it.

An Urgent Appeal: Empower Every Child through Direct Benefit Transfers to Achieve NEP Goals

In conclusion, while the increased budget allocation for 2024-2025 is a step in the right direction, achieving the NEP 2020’s goal of universal foundational literacy and numeracy demands a more inclusive and heartfelt approach. We must adopt a funding model centered on direct benefit transfers (DBT) for all children in India, regardless of whether they attend government or private schools. Every child deserves the chance to dream, learn, and thrive without the chains of financial barriers and bureaucratic red tape.

Imagine the transformative power of empowering parents to choose the best educational options for their children, fostering a competitive environment that drives schools to excel. Picture a future where no child is left behind, where every young mind can flourish and reach their full potential. This vision can become a reality if we take decisive action now.

We urge our policymakers to embrace this compassionate and practical solution. Let us tear down the barriers that hold our children back and build a foundation of hope, opportunity, and equality. It is time to put our children first, ensuring that every child, no matter their background, receives the quality education they deserve. Let us act with urgency and unwavering commitment to create an educational landscape that truly serves all of India’s children. The future of our nation depends on it.