Introduction
In India, both the central and state governments are responsible for education.[i] Both central and state governments operate schools and higher education institutions (HEIs). In 2023-24, 53% of school enrolment was in government schools, 99% of which was in schools run by the state government.[ii] In 2021-22, 35% of college enrolment was in government-run colleges. [iii]
In 2013-14, combined expenditure on education by states and the centre was 3.8% of GDP.[iv] In 2020-21, this is estimated to rise to 4.64% of GDP.4 This is still short of the long term policy target of 6%, set by the National Education Policy, 2020 (NEP).[v]
The Union Ministry of Education has two departments: (i) the Department of School Education and Literacy, and (ii) the Department of Higher Education. The Department of School Education funds certain schemes implemented by states such as Samagra Shiksha Abhiyan and PM-POSHAN. It is also responsible for schools such as Kendriya Vidyalayas, and Navodaya Vidyalayas. The Department of Higher Education funds central universities such as IITs, NITs, IISERs, and IIMs, among others. It also funds the higher education regulators, UGC, and AICTE. It provides scholarship for higher education and also supports research in higher education.
This note examines the allocation to the Ministry in 2024-25, and discusses key issues in education.
Overview of Finances
In 2025-26, the Ministry of Education has been allocated Rs 1,28,650 crore.[vi] This is an increase of 13% over revised estimates of 2024-25. In 2024-25, the Ministry’s expenditure is estimated to be 5% lower than budgeted. This is due to underspending in school education by 7%, and higher education by 2%.
The Department of School Education and Literacy has been allocated Rs 78,572 crore (61% of the Ministry’s Budget).6 This is a 16% increase over the revised estimates of 2024-25. The Department of Higher Education has been allocated Rs 50,078 crore (39% of the Ministry’s Budget).6 This is an 8% increase over the revised estimates of 2024-25.
Spending in 2023-24 was higher than 2024-25 due to additional allocation to the reserve fund called the Madhyamik and Ucchatar Shiksha Kosh (MUSK).[vii] MUSK is a non-lapsable fund created to receive proceeds from the Health and Education Cess. It is used for schemes in education.