The Union Budget identifies education as one of the key pillars of its agenda. The budget offers support on three dimensions. This article discusses these three dimensions in the sphere of higher education.

Extend reach:  The budget aims to extend the reach of education. At the post-secondary level, it focuses on expanding skill development (by scaling up the Pradhan Mantri Kaushal Vikas Yojana through setting up of 1,500 Multi-Skill Training Institutes) and entrepreneurship education (by offering online courses in entrepreneurship to 2,200 colleges, 300 schools, 500 ITIs, and 50 vocational training centers).

Strengthen educational infrastructure: The budget commits investments in educational infrastructure. For higher education, this would include establishment of a digital depository for certificates and mark-sheets, development of massive open online courses (MOOCs) in entrepreneurship, and formation of Higher Education Financing Authority (HEFA) with an initial capital base of Rs. 1,000 crore for financing improvements in infrastructure of top institutions.

Improving quality: The budget emphasizes ensuring quality, beyond extending reach. For post secondary education, this would include establishment of a National Board for Skill Development Certification, and identification and support of 20 institutions through implementation of an enabling regulatory architecture to help them emerge as world-class institutions.

Given India’s size, demography, and state of economic development, extending educational reach is an ongoing and important concern. What is novel is that the budget explicitly recognizes that along with increasing reach, attention must also be paid to improving quality. If education is truly to build capacity of our nation and its populace, it has to be available and affordable, but also impactful. Simply focusing on expanding reach may increase enrollment numbers, but it does not ensure improvement in the quality of learning. In fact, intensive focus on reach often leads to decline in average quality.

Additionally, although investment in infrastructure does not bring immediate and visible gains, strong infrastructure significantly improves the effectiveness of other initiatives, such as push for reach or quality. Several of our institutions of higher learning have cumulated a history of academic excellence, but their physical facilities are crumbling. HEFA investment will facilitate improved quality of education by making the physical environment in those institutions more conducive to learning.

Thus, the budget gets it right by paying attention to all three dimensions—reach, infrastructure, and quality. Such an approach is likely to have more significant and positive impact than exclusive focus on any one dimension.

However, the budget raises three questions as well. How those concerns are addressed will significantly influence how successful the budget’s various initiatives eventually are.

Making the right choices:  To be impactful, the budget makes choices on where to focus. If the choices are made well, results will be positive; if the choices are made poorly, investments will be wasted. For instance, the budget emphasizes entrepreneurship training through MOOCs. One could argue that entrepreneurship courses don’t develop entrepreneurs; students are nurtured into entrepreneurs by providing them a rich ecosystem of angel investors, venture funds, and mentors. If that be true, entrepreneurship would be encouraged by emphasizing ecosystem development over course delivery.

Another potentially consequential choice is the proposal to support 10 public and 10 private institutions. If the number of high quality institutions that are vying for recognition are not equal in the two sectors, then the equal quota approach privileges the sector that has fewer high quality institutions. For instance, if there are 30 public and 20 private institutions in the consideration set, then the approach offers better access to resources to private institutions rather than public institutions. Unless differentially nurturing high quality private institutions over high quality public institutions is a policy imperative, the approach of holding 10 spots each for private and public institutions then leads to an unanticipated consequence of favoring private institutions. A better approach would be to support a particular number of institutions, say 20, irrespective of whether they are public or private. This approach would offer equal opportunities to both sectors.

Interpreting and implementing initiatives:  The Union budget provides a roadmap. But God is in the details. How the various initiatives are implemented will largely determine their efficaciousness. For instance, if the various investment decisions (such as which institutions get what share of HEFA funding) are made in a transparent and meritocratic manner, educational institutions will vie for investments by trying to excel and developing plans to utilize the investments effectively. If the investment decisions are made in a way that carry even hints of capriciousness or nepotism, educational institutions will vie for investments by seeking favors and peddling influence.

Another example of interpretation being the key to implementation of plans is the current uncertainty as to the nature of enabling regulatory architecture proposed to help high quality institutions become world class. “Enabling regulation” might appear an oxymoron to some. A distinguishing characteristic of world-class academic institutions is that they have considerable latitude in operations. Our academic institutions might need “enabling deregulation” to set them operationally free. Perhaps, that is what the phrase “enabling regulation” implies: replacing a regime of administrative state control with a regime of administrative freedom with regulatory oversight. However, the proof of this pudding—how enabling regulation will make our high quality institutions become globally competitive—lies in the eating. We have to wait to see the shape these enabling regulations take.

Complementary plans for building “soft” assets: Finance budget has to speak the language of “hard” financial investments. In the education sector, even more than other sectors, the effectiveness of these investments depends acutely on complementary “soft” investments in human capital. To get meaningful results, financial investments must be blended with human capital investments that strengthen skills and culture. Thus, the Finance budget must be coupled with a complementary Ministry of Human Resources and Development plan on development of human capital in academic institutions, such as plans to develop faculty capabilities and nurture vibrant academic cultures.

In conclusion, the budget offers a robust way forward by paying attention to all three aspects of educational investment: extending reach, strengthening infrastructure, and ensuring quality. However, its effectiveness depends on how the three major concerns are addressed: making the right choices, appropriate implementation, and making complementary investments in human capital.