Higher education and subsidies

The ongoing student movement in Jawaharlal Nehru University (JNU) over the proposed increase in the fees of residential hostels has once again made the issue of higher education and its subsidies a topic of general discussion in the country. Much controversy has arisen over whether subsidy should be given for higher education in the country. It should be noted that according to the 2011-12 census, 25.7 percent of the total population living in rural areas of India is living below the poverty line, while in urban areas this figure is around 13.7 percent. Although there has been a decrease in this number in the last few years, it cannot be denied that the roots of poverty and economic inequality are still strong and deep in Indian society even today. In this context, many analysts believe that subsidy on education can be seen as a good option if we want to provide quality education to all citizens by eliminating economic inequality in the country. On the contrary, some people believe that the subsidy given on basic facilities like education puts some kind of pressure on the economy.

Why is subsidy required in higher education?


  • Amartya Sen, eminent economist and Nobel laureate of the country wrote in his book that education contributes greatly to the development and economic progress of the country. Education gives us a new way of living and also improves the standard of living.
  • A Bangladesh researcher on the relation between economic development and education found in his study that public spending in education has a positive and significant effect on economic growth in the long run. According to the study, if the government of a country spends 1 percent more on education, then the per capita GDP of that country can increase by about 0.34 percent.
  • Subsidies in higher education provide an opportunity to all economically and socially backward people at the margins of society to get quality education.
  • Subsidized education plays an important role in accelerating the economic development of the country. Students engaged in higher education participate in various research and research and try to contribute to the economy at their own level.
  • It is noteworthy that higher education promotes innovation and creative thinking.
  • Many experts see subsidized education as a future investment in the economy and believe that if we are not providing subsidies on education, we are clearly neglecting the future of the country.
  • Significantly, inclusiveness and legitimacy are key features of any good public institution and inclusiveness and legitimacy cannot be ensured without public funding in higher education.

quality education

  • India has a large young population, but many studies suggest that the educational and skills proficiency of most Indian youth is not compatible with market requirements. Therefore, it can be said that subsidized education can play an important role in achieving demographic benefits in the country.
  • Earlier it was believed that only elite class has the right to higher education, due to which most socially and economically backward poor were deprived of higher education. But now due to the efforts made by the government in the form of subsidy and other benefits in higher education, many such people are also reaching the higher educational institutions today, who have been continuously fighting for their daily needs.
  • However, in the last few years, there has been a decrease in such efforts.

The challenges

  • The main objective of providing subsidy on education is to connect the mainstream of the society by giving economic benefits to the people present at the margins of the society. However, it is sometimes seen that even those people who do not need this kind of subsidy take advantage of it, due to which the needy people do not get the benefit.
  • Many analysts argue that quality education cannot be ensured only through subsidies and in the absence of quality education, education is of no importance.
  • Inequal distribution of subsidies in education is also a major problem. Statistics show that most of the education subsidy in the country goes to only a few large institutions, while Liberal Arts-related institutions get very little of it.
  • The data released by the Ministry of Human Resource Development in relation to the subsidy of higher education last year shows that more than 50 percent of the central government money given for higher education between the years 2016 to 2018 is IITs, IIMs and NITs. Only 3 percent of the students studying in IIT found
  • While 97 percent of the students studying in 865 higher educational institutions got less than half the money.
  • Privatization of higher education is also a major problem, as private institutions are not responsible for providing access to affordable and quality education to the common people. Their only aim is to make profit through it.
higher educational institutions

Status of other countries

  • Denmark spends about 0.6 percent of its total GDP on subsidies to higher education students. It is worth noting that a total of 55 percent of the youth study there.
  • Finland also gives various scholarships and grants to its students for their education and other expenses. About 69 percent of the youth are registered in universities there.
  • Ireland has been paying tuition fees for most of its full-time undergraduate students since 1995.
  • The Icelandic government spends an average of $ 10,429 annually on its students and around 77 percent of youth are registered for higher education.
  • It is important to note that Norway spends 1.3 percent of its GDP for subsidies on higher education, which is the highest expenditure on education in the world. Here also about 77 percent of the students are registered in higher education.

Higher Education in India


  • It is noteworthy that the present system of higher education begins with the report of Mountstuart Elphinstone of 1823, which stressed the need to establish schools to teach English and European science.
  • Later Lord Macaulay, in his 1835 report, advocated efforts to make the original inhabitants of the country a good English scholar.
  • Sir Charles Wood’s Dispatch of 1854, known as the ‘Magna Carta of English Education in India’, recommended proper planning from primary school to university education.
  • It planned to encourage indigenous education and formulate a coherent policy of education. Subsequently, the University of Calcutta, Bombay (now Mumbai) and Madras were established in 1857 and later the University of Allahabad in 1887.
  • As of present time, according to MHRD statistics, at present more than 2 crore students are registered in higher educational institutions of the country.
  • However, it would probably be unfair to assess the state of higher education in the country with this big data, as only the MHRD’s All India Higher Education Survey shows that only 25.8 percent of students aged 18-23 are registered for higher education.
  • Only seven Indian universities were ranked in the top 400 universities in the 2019 QS World University Rankings.

Road ahead

  • According to a study conducted by an institute, in the absence of proper regulation, there may be hindrance in reaching benefits to the needy. Therefore, there is a need for proper regulation in this context to prevent those who do not need it from availing subsidy.
  • University administration should be encouraged to collect funds from other sources.
  • The recommendations of the Punnayya Committee (1992-93) set up by the University Grants Commission can be implemented, according to which only 20 percent of the total expenditure should be recovered from the students in higher education.

The conclusion

Education is the key to a better future, it not only contributes to our personal development but also has an important role in the development of the country. Be aware that getting quality education is the privilege of every citizen of the country. This gives us an understanding of our legal rights and helps in ending social evils like class division and non-equality. Therefore, it is necessary to increase higher education in the country so that investment can be ensured on the country’s better future.

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