Students appear for class 12th Board exams in a school at Agartala. (Photo: PTI)

Need Faster Growth? Spend More on Educating India's Children

(Bloomberg) -- More than 100 million people are expected to enter India’s workforce by 2022, yet a lack of investment in education has put the South Asian nation in danger of wasting the demographic dividend that could fuel its economic growth.

Thursday’s budget was an opportunity to allocate more on education -- the most powerful instrument for reducing poverty and inequality in one of the youngest nations in the world.

But while Finance Minister Arun Jaitley announced measures to boost education infrastructure out to 2022, he was not that generous in allocating resources in the near term.

Need Faster Growth? Spend More on Educating India's Children

India has made progress on access to schooling in recent years, although dropout rates and low levels of learning remain a key challenge. “We have managed to get children to school but the quality of education is still a cause of serious concern,” said Jaitley in his budget speech. “We propose to increase the digital intensity in education and move gradually from ‘black board’ to ‘digital board’.”

Even though overall spending of state and federal governments has been increasing, as a percentage of GDP it’s decreasing. Spending on education was 2.7 percent of GDP for the financial year 2018, down from 3.1 percent in FY13.

Need Faster Growth? Spend More on Educating India's Children

India’s public education spend as a percentage of GDP is the lowest among its peers, according to BRICS Joint Statistical Publication 2017.

Country2008 20112014
Brazil4.655.7
Russia43.73.8
India2.93.12.6
China3.33.94.1
South Africa5.86.86.9

Still, there have been some advances. India has implemented free compulsory education for children, spent more on infrastructure and made progress on enrollment, building class rooms, providing drinking water and toilets, and appointment of teachers. Yet girls continue to experience discrimination in accessing higher education.

Need Faster Growth? Spend More on Educating India's Children

One of the most worrying factors is the declining in quality of education. Students in India aged 14-18 years show a lack of basic skills despite spending years in school, according to ASER Centre.

Need Faster Growth? Spend More on Educating India's Children

"Even though the government has increased the allocation for education sector, it’s still below expectations," said Shuchi Gautam, associate professor at Thakur Institute of Management Studies and Research in Mumbai. "This budget is a moderate one with more focus on consolidation and strengthening of existing initiatives."

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