Union Budget 2024: FM announces education loans of up to Rs 10 lakh for higher education in domestic institutions

The budget allocations for education include financial support for education loans of up to 10 lakh rupees for higher education in domestic institutions, at an interest rate of 3%. Additionally, E-vouchers for the same will be distributed annually to 100,000 students.

Moreover, as per her initial announcements, Sitharaman said that govt to allocate Rs 1.48 lakh cr for education sector, jobs and skill development sectors. 

Jaideep Kewalramani, COO & Head of Employability Business, TeamLease Edtech said, "Encouraging higher education and skill development among females is another critical aspect that requires thrust. Education loan support to individuals who are not eligible for government schemes is a noble initiative. The financial ecosystem will require mechanisms to determine eligibility and ensure maximum inclusion."

In the interim budget released in February, government allocated over Rs 73,000 crore to the Department of School Education and Literacy, representing the largest funding ever designated for this sector. These announcement have not been taken up in the current budget.

This allocation reflected an increase from the revised estimates of Rs 72,473.80 crore from the previous financial year and exceeds last year's budget of Rs 68,804.85 crore for the same department.

Additionally, funding for the PM SHRI initiative, which aims to transform government schools into model institutions, which was from Rs 2,800 crore in the 2023-24 revised estimates to Rs 6,050 crore for the 2024-25 financial year, marking a remarkable rise of Rs 3,250 crore, also failed to make place in the current budget.

Economic survey 2023-24 findings 

Meanwhile, the Economic Survey 2023-24 revealed downward trend in the sector. While expenditure on education in India has increased at a compounded annual growth rate (CAGR) of 9.4 percent from FY18 to FY24, student performance has not kept pace, showing significant declines in performance for students studying class above 3rd grade.

Assessments such as the National Achievement Survey (NAS) highlight critical gaps in student learning, with significant decreases observed from NAS 2017 to NAS 2021. Among the most concerning are a 13.4 percent drop in Class 10 Mathematics scores and a 9.1 percent decrease in Social Science, along with declines in foundational literacy and mathematics among Class 3 students.