Without getting into the political recipe of the budget halwa, an academic’s recipe contains lots of sweets that require few toppings for better serving. Academics who keep stating the unachievable six per cent of GDP spend on education as a budget barometer need to travel in a path less taken. The finance minister has provided the route map for higher education institutions in providing leaders of higher-ed a triple bonanza.
The UN population projection of India’s working-age population (15 to 59 years) is in an upward trend till 2044. The Economic Survey of 2023-24 calls for an annual addition of almost 80 lakh people in the non-farm sector. Services sector employment has been contributing significantly to this workforce increase, but does not have the capacity to absorb such a rising workforce requirement in the years to come.
Prime Minister Modi’s focus on manufacturing through various PLIs emphasises India’s need to create jobs and skilled workforce in manufacturing and construction sectors. From that perspective, the budget signals a fresh wave for non-farm employment generation which is a key message for higher education institutions which are swayed by the IT/computer popularity wave that marginalises core engineering education.
Three schemes aiming to enrich the youthful skill and knowledge capital of India have far reaching impacts. Skilling two million people over five years and providing guaranteed loans up to Rs 7.5 lakh for 25,000 skilled persons every year shall definitely spur rural entrepreneurship with potential to scale and speed along with the MUDRA loan cap increase up to Rs 2 million. The Employment Linked Incentive (ELI) and internship to around 10 million youth in the next five years in top 500 companies, or their value chain stakeholders, provides employable youth aligned with workplace skills. The success of these lies in the areas of implementation.
This trio of ELI, Internship and Skilling, if predominantly aligned with the manufacturing industry, can leverage India’s much-spoken demographic dividend effectively. Ranked seven in the global services export, a country of India’s size having a share of 1.6 per cent in global manufacturing exports is an issue to seriously ponder. Even a small country like Vietnam has a share of 2 per cent. Finance Secretary TV Somanthan’s justification that the budget’s job-generating schemes nudges industry to adopt less automation and more labour seems to be in order.
This doesn’t mean that manufacturing output will be compromised. It only means that high-quality labour-intensive skills need to be infused in the youthful and skilled workforce, to fully leverage India’s globally competitive demographic dividend. With manufacturing and construction being the largest employer outside agriculture dwarfing services sector employment, more employment in construction and manufacturing sectors will make India an attractive manufacturing destination in the context of global supply chain.
Ensuring the right mix of students and institutions in implementing the ELI, skilling, internship and loans for higher education is one of the most important requirements. From the student side, emphasis should be given to girls, socio-economically challenged, first-generation graduates, etc. On the institution side, focus should be on non-IITs/NITs and should include other public and private institutions who have the capacity to deliver with their existing infrastructure and are among the top institutions based on government’s own NIRF ranking or other empirical metrics.
The focus on research and development through the Anusandhan National Research fund and financial pool of Rs 1 lakh crore for private sector research and innovation is a huge opportunity for public and private universities. It requires competitive and transparent research funding mechanism to maximise research outcome and not polarised funding that minimises it. Domestic higher education loans of up to Rs 1 million with interest subvention through e-vouchers for one lakh students every year is a big push towards achieving gross enrolment ratio targets.
Budget’s three parts—speech that generates instantaneous friction, text that generates mixed reaction and context that generates empirical justification—have to be seen as a whole. An academic’s viewpoint of the budget as a sum of its parts demonstrates the emerging role of higher education institutions—both in teaching and skilling and in research.
With a lurking fear of polarised degree programmes towards popular streams and the hanging GST sword on research grants, I end this article with the hope that the review of the Income Tax Act provides much-needed relief to deserving charitable trusts running top-ranked educational and research institutions in advancing this budget’s noble ideals of creating jobs and adding new to an existing body of knowledge. In short: Sweet budget halwa requires sweeter toppings.
S Vaidhyasubramaniam
Vice-Chancellor, SASTRA Deemed University
vaidhya@sastra.edu