India promised 6% of GDP for education. Six years after NEP 2020, spending is still stuck

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In its June 2026 action-taken report on education, a Parliamentary Standing Committee expressed concern that total education expenditure as a percentage of GDP is far lower than the level the nation committed to in 1968 and has repeatedly reiterated. The committee also underscored that allocation for higher education was ‘underwhelmed’.

The National Education Policy (NEP 2020) reiterated that public spending on education would climb to 6% of India’s GDP, a target first set in 1968 and dutifully reiterated since. Six years on, education expenditure as a percentage of GDP has stubbornly remained stagnant at 2.7%. In 2020-21, education expenditure was 2.9%, lower than in 2010-11, when it was 3.1% of GDP.

The Ministry of Education, which aggregates education-related expenditure from the Centre and the states, estimated education expenditure at 4.04% of GDP in 2019-20. The budget estimates for 2022-23, the latest year for which data is available, pegged this figure at 4.06%. The combined expenditure on education by the centre and states, as a percentage of their total expenditure, has declined from 11.6% in 2012-13 to 9.1% in 2024-25. In 2025-26, it is budgeted at 9.8%.

With the Union government, the trend has been one of retreat. It is hard to defend, as the government's revenue receipts in 2011-12 were Rs 7.5 lakh crore, which by 2022-23 had risen to Rs 22 lakh crore. The 2026-27 Union Budget estimates revenue receipts at 35.33 lakh crore. Clearly, education spending has not kept pace with the growing revenue receipts. Apparently, it was more a matter of deliberate choice than of the compulsion of circumstances, not to allocate a proportionate share to education, year after year, budget after budget.

Counter-intuitively, state governments, which are often accused of dragging their feet in popular education policy narratives, have actually been spending more on education than the Centre has. In 2022-23, for example, the Centre’s allocation for education was just about 1.09% of GDP, whereas the states’ was 2.97%.

Critically, however, 80-85% of states' educational spending goes to school education, leaving only a little for higher education. The Union government spends 60% of its education budget on school education. Consequently, higher education has been receiving far less than it ought to receive. Higher education spending, as a percentage of GDP, had actually declined from 0.86% in 2010-11 to 0.52% in 2019-20.

Following the announcement of the NEP 2020, higher education spending marginally increased to 0.57% of GDP by 2021-22, but has since slipped to 0.53%. If a policy's success is measured by whether it moved the needle in the direction it promised, this is a story to be worried about.

More perturbing is that the Centre’s allocation for higher education has consistently declined from 0.33% of GDP in 2010-11 to 0.18% in 2022-23, the latest year for which data is available in the Analysis of Budgeted Expenditure brought out by the Ministry of Education. In contrast, states were spending a significantly higher proportion, but their allocation for higher education has also declined from 0.53% of GDP to 0.35%.

The result is a growing mismatch. The Centre tightly regulates higher education but mainly funds the central universities, their constituent colleges, and institutions of national importance. The vast majority of colleges and state universities, where most of India's students study, are funded by state governments.

According to the enrolment data reported by the All India Survey of Higher Education (AISHE), the central government’s per-student spending on higher education declined from Rs 8,781 in 2010-11 to Rs 7,470 in 2020-21. The per-student spending by the Union government has since then increased to Rs 10,913 in 2022-23. In comparison, the per-student expenditure on higher education by the states has increased consistently from Rs 13,996 in 2010-11 to Rs 21,022 in 2022-23.

The policy aims to raise the Gross Enrolment Ratio from 27% in 2019-20 to 50% by 2035, which would require adding about 35 million more students to the system over the next decade. Yet the per-student public support is barely holding its value in real terms.

Policy mismatch

Expansion without proportionate funding does not produce more educated citizens. At best, it may produce more crowded, poorly resourced institutions awarding degrees of increasingly uncertain value. How could it be possible to do twice as much with roughly the same per-head resources in real terms? That arithmetic does not work, and no amount of policy-language shifts will change it.

Indeed, the private sector can enhance capacity without demanding public resources. Public institutions can also pitch in by increasing cost recovery and introducing self-financing programmes. Governments can make higher education look affordable by resorting to deferred cost recovery. But they all have a limit, and it has already begun to show in the official data.

The rate of growth in higher education enrolment has begun to slow. The higher cost of higher education affects those very sections of students whom the NEP 2020 claims to protect: the first-generation learners, students from reserved categories, the Muslim minorities, and those from low-income households, for whom even a "concessional" fee at a public university is often an insurmountable barrier.

India does not lack the resources to finance its universities at the level its own policy documents demand. What is needed is the will to spend it that way. Until that changes, the gap between what our education policy promises and what our education budgets deliver will keep widening, much to the detriment of equity and equal employment opportunity.

The writer is Vice Chancellor of Integral University, Lucknow. He has served as Education Advisor in the Planning Commission and the Secretary General of the Association of Indian Universities.

(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.)

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