Panel: Hike education spend to 20% of public expenditure in 10 years

NEW DELHI: Rooting for higher investment on education, the draft National Education Policy (NEP) proposes incremental increase in spending till it reaches 20% of the total public expenditure on education in next ten years. Public expenditure (Centre and state) on education in India was just 2.7% of GDP in 2017-18, which is about 10% of the total government spending.
Citing countries across the spectrum of economic development, the NEP panel suggests that “central government expenditure on education has to double,” and the states expenditure will also have to increase significantly to achieve the 20% of their overall spending on education.While reiterating past proposals of increasing spend on education to 6% of GDP, the policy document also observes that public and private activities are not at odds and central and state governments will develop mechanisms to support philanthropy.

“It is more effective (and actionable) in the short-to-medium term to consider goals of public investment in education as a proportion of overall public expenditure. On this count, the policy envisions that the overall public expenditure on education must increase to 20% of all public expenditure for the appropriate policy actions to be undertaken,” says the NEP, 2019.
It says that even “viewed with the narrow lens of economic returns”, the return on investment on education “could measure up to 3-4 times higher than private returns”. “In other words, they yield 25%-30% rates of social returns over and above the 6%-12% private rates of return. It is important to note again that this estimated return does not include the many other social goods being created, which cannot be monetised,” it says. The document says what could back increased spending are the growing size of economy and measures which have increased the tax-to-GDP ratio in the last four years.