Public Funding of Higher Education in India: Issues and Implications

Abstract

The National Education Policy (NEP) 2020 committed to a significant enhancement of public funding for higher education in India, pledging to raise educational investment to 6% of GDP. This paper critically examines whether that commitment has translated into reality. Drawing on data from Economic Surveys, the Analysis of Budgeted Expenditure published by the Ministry of Education, and University Grants Commission annual reports covering the period 2010–11 to 2023–24, the study presents a comprehensive picture of public funding trends across central and state governments. The findings reveal a deeply concerning decline: overall expenditure on education by education departments fell from 3.1% of GDP in 2010–11 to 2.7% in 2023–24, while public expenditure specifically on higher education dropped from 0.86% to 0.63% of GDP between 2010–11 and 2020–21. State government spending on higher education declined sharply, while per--student expenditure grew at a negligible rate insufficient to offset inflation or rising enrolment. The paper examines the structural shifts in funding mechanisms—from grants in aid to performance--linked and loan--based models and their implications for equity, access, and excellence. It concludes that the widening gap between policy rhetoric and fiscal reality risks accelerating the de facto privatisation of public higher education in India.