More financial assistance sought in Indian budget

Published 12/02/2024

India has increased its education budget for this year to Rs1.2 trillion (£11.4 billion), compared with last year’s Rs1.13tn, the finance minister Nirmala Sitharaman announced last week.

However, international education stakeholders say outbound Indian students should have been addressed.

“Unfortunately, the interim budget 2024 didn’t address issues related to interest rates on education loans or Tax Collected at Source for remittances for overseas education,” said Saurabh Arora, CEO of University Living, a global student accommodation platform.

“These aspects significantly impact the affordability of international education for Indian students and their families.

“We hope that the full-fledged budget post the general elections in India will consider this aspect to some extent,” he added.

Another budget is expected after the elections in April and May.

According to the Reserve Bank of India’s updated rules if the remittance amount exceeds INR 700,000 (approx. £6,700), it is subjected to a TCS of 0.5% but only if the education is funded through a loan from a financial institution.

As for those pursuing their higher education without the support of a loan, the TCS rate stands at 5%.

ETS’s country manager for India and South Asia, Sachin Jain, had hoped for increased funding for scholarships, research collaborations and exchange programs, “alongside incentives for universities to welcome international talent in the interim budget 2024 to support outbound Indian students”.

“Such funding is crucial for enabling access to high-quality education globally, fostering academic excellence, and facilitating cultural exchanges,” Jain noted.

Founder and director of OneStep Global, Aritra Ghosal, emphasised the budget’s “unwavering commitment to providing equitable and quality education for all”, as well as the government’s vision of nurturing globally competitive professionals.

In total, Sitharaman outlined an 11% rise in spend in the next financial year, reaching Rs11.11tn, with record infrastructure investments the big headline.

“The emphasis on quality education through PM Schools for Rising India and the Skill India Mission’s success in training 14 million youth underscore India’s commitment to preparing its students for global opportunities,” stated Manisha Zaveri, joint managing director, Career Mosaic.

The PM SHRI – outlined in the 2020 National Education Policy – aims to upgrade existing schools to provide a high-quality education in an “equitable, inclusive and joyful” environment. The initiative’s budget rose by some 6.1% this year.

Zaveri added that the establishment of new higher education institutions, including IITs, IIMs and universities, alongside the inaugural international university campus in GIFT City, “signals a robust move towards internationalising education”.

“Measures aimed at enhancing educational quality and accessibility offer students a solid foundation”

“These measures, aimed at enhancing educational quality and accessibility, offer Indian students a solid foundation as they seek international study opportunities,” Zaveri said.

Strengthening partnerships with global universities could further open doors for Indian students in accessing academic and work opportunities, she added.

Minister of state for education Subhas Sarkar told parliament in the past week that the University Grants Commission had received an application from Lincoln University College, Malaysia, to set up a campus in the state of Telangana.

UGC saw a 50% cut in the latest interim budget, falling from Rs5.3m last year to Rs2.5m in the 2024/25 financial year.

Head of Strategic Communications at MPOWER Financing, Madhushri Verma, suggested that the next budget provide “better incentives” and “more financial assistance/allocation” for higher inclusivity of international education.

“[That would] help extensively in the upskilling of students from tier 2 and tier 3 cities, thus aligning with the core skilling objectives of the government,” Verma said.

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