Education Budget 2024 Updates – Paid internships, schemes to benefit women; other takeaways
The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, has introduced significant changes and initiatives in the education and employment sectors.
With a substantial allocation of Rs 1.48 lakh crore for education, employment, and skill development, the government aims to address key challenges and create new opportunities for India’s youth.
Higher Education and Financial Support:
One of the most notable announcements is the provision of financial support for higher education loans up to Rs 10 lakh for studies in domestic institutions. This move is expected to ease the financial burden on students and their families, making quality education more accessible. Additionally, the government plans to provide paid internships in top companies, offering valuable work experience to students and recent graduates.
Skill Development Initiatives:
The budget introduces a new centrally-sponsored scheme for skilling, to be implemented in collaboration with state governments and industries. The ambitious goal is to skill about 20 lakh youth over a five-year period. This initiative aims to bridge the gap between education and employability, ensuring that young Indians are better prepared for the job market.
To further enhance skill development, the government has announced plans to upgrade 1,000 Industrial Training Institutes (ITIs). The course content and design of these ITIs will be aligned with the skill needs of industries, ensuring that the training provided is relevant and up-to-date with market demands.
Internship Program:
A major highlight of the budget is the government’s plan to provide internships to one crore youth. These interns will receive a stipend of Rs 5,000 and a one-time assistance of Rs 6,000. Interestingly, the cost of this internship scheme will be borne by companies from their Corporate Social Responsibility (CSR) funds, creating a unique public-private partnership model for youth empowerment.
Women in STEM:
The Finance Minister highlighted the increase in women’s participation in Science, Technology, Engineering, and Mathematics (STEM) courses over the last decade. This positive trend is attributed to the implementation of the National Education Policy (NEP) 2020, which has focused on promoting gender equality in education.
Budget Allocations:
While the overall education budget has seen an increase, there have been some surprising changes in fund allocation. The University Grants Commission (UGC) saw a significant reduction in funding, with its allocation brought down by 60.99% to Rs 2,500 crore from the previous year’s revised estimate of Rs 6,409 crore. On the other hand, grants for central universities have increased by over Rs 4,000 crore, with Rs 15,928 crore allocated for the financial year 2024-25.
Reactions from Students and Aspirants:
The budget has received mixed reactions from students, particularly those preparing for competitive exams like NEET (National Eligibility cum Entrance Test). Many expressed disappointment that no relief was announced on the 18% GST on coaching fees. Students argued that education is a right and should not be taxed, calling for interest-free education loans.
However, the reduction in interest rates on education loans was welcomed by some students, who believe it will help those from financially disadvantaged backgrounds. There were also expectations for funds to be allocated to strengthen examination agencies to ensure fair and scam-free exams, but this was not addressed in the budget.
Impact on Medical Education and Healthcare:
The budget has introduced some measures that will impact the medical sector. Dr. Laxman Lal Gurjar, a surgeon, appreciated the reduction in prices for cancer drugs and X-ray machines. He also welcomed the increase in the Mudra loan limit to Rs 20 lakh, which could promote entrepreneurship in the healthcare sector. However, he called for a tax-free slab up to Rs 10 lakh and relief for purchasing advanced medical equipment in hospitals to encourage research and development in small and medium-sized healthcare facilities.
Empowering Women:
The budget includes measures to benefit women, such as mandatory reduction of stamp duty for women in all states. This move was praised by Dr. Brijbala Gupta, a member of the state BJP working committee, who saw it as part of the government’s ‘Sab Ka Saath, Sab Ka Vikas’ (Together with all, Development for all) approach.
Impact on Investors:
Young investors, particularly those in the stock market, have expressed some concerns about the budget. Sayam Dadich, a 20-year-old Chartered Accountant Intermediate aspirant and stock market investor, noted that while the relaxation in interest on education loans is helpful, the increase in tax rates for short-term and long-term investments is disappointing for young investors.
Expert Opinions:
Education and technology experts have weighed in on the budget’s implications. Vinay Singh, Executive Director and CEO of Thomson Digital and Q&I, sees the substantial investment in education and skilling as a game-changer. He believes it opens doors for innovative edtech solutions that can transform learning and teaching methods, preparing youth for the future and driving meaningful change.
Sapna Moudgil, CEO of NIIT Foundation, emphasized the importance of collaborative efforts between stakeholders – including governments, the private sector, and non-government organizations – to close the skill gap and ensure robust implementation of the proposed schemes. She points out that India’s skilled workforce currently sits below 5%, compared to 52% in the US and 80% in Japan, highlighting the potential for growth in this area.
Kamlesh Vyas, Partner at Deloitte India, noted that the budget takes a multi-pronged approach to skilling and employment, focusing on outcomes rather than just inputs. He highlighted the balance between encouraging jobs and entrepreneurship, with support for the latter coming through proposals related to angel tax, income tax, and GST interventions.
Challenges and Opportunities:
While the budget presents several opportunities for growth and development in the education and employment sectors, it also faces challenges. The implementation of these ambitious schemes will require efficient coordination between central and state governments, as well as active participation from the private sector.
The reduction in UGC funding raises questions about the impact on higher education institutions and their ability to maintain quality standards. On the other hand, the increased funding for central universities could lead to improved infrastructure and research capabilities.
The focus on skill development and internships is a step in the right direction, but it will be crucial to ensure that the skills imparted are in line with rapidly evolving industry needs. The success of these initiatives will depend on close collaboration between educational institutions and the corporate sector.
Conclusion:
The Union Budget 2024-25 demonstrates a clear focus on education, skill development, and employment generation. By allocating substantial funds and introducing innovative schemes, the government aims to create a more skilled and employable workforce. The emphasis on internships, skill development, and support for higher education loans shows a commitment to addressing the challenges faced by India’s youth in today’s competitive job market.
However, the budget also leaves some concerns unaddressed, particularly regarding the taxation of education services and support for certain segments of the education sector. As these initiatives are implemented, it will be crucial to monitor their effectiveness and make necessary adjustments to ensure they achieve their intended goals.
Ultimately, the success of these measures will depend on efficient implementation, continued engagement with all stakeholders, and the ability to adapt to the changing needs of both students and industries. If executed well, these initiatives have the potential to significantly boost India’s human capital and contribute to the country’s economic growth and development.
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