New Delhi: Substantial reduction in the education budget over the last five years has reduced allocations for scholarships given to students from marginalised communities, affecting their ability to stay in the education system, shows an analysis of government data between 2015-16 and 2019-20.

The need to improve the education budget becomes critical at a time when institutions across the country are increasing their fees to deal with funding cuts, which have been met with widespread agitations. Underprivileged communities such as Scheduled Castes (SC) and Scheduled Tribes (ST), for example, make for 25.2% of the country’s population but constitute only 20% of those who are educated, as per Census 2011. Fee hikes would make education even more inaccessible for them.

In August 2019, the Central Board of Secondary Education (CBSE) increased the board exam fees for Classes X and XII--for general category students, from Rs 750 to Rs 1,500, a 100% increase; and for SC and ST students, from Rs 50 to Rs 1,200, a 2,300% hike. Institutions of higher education such as the Indian Institutes of Technology, Indian Institutes of Mass Communication, All India Institutes of Medical Sciences, and central universities such as Jawaharlal Nehru University too have raised their fees.

Between 2014-15 (actuals, A) and 2019-20 (budget estimates, BE), the share of education expenditure in the total Union budget fell from 4.1% to 3.4%. The dearth of funds is reflected in both the amount allocated for scholarships as well as a decline in the number of beneficiaries across categories of scholarships, our analysis shows.

There are two types of scholarships made available to students from marginalised communities--pre- and post-matric--and there have been cuts in both types across SC, ST and Other Backward Classes (OBC) and minority categories, as the tables below show. But here are some snapshots from our analysis drawn from various reports:

  • The pre-matric scholarship for the SC category continuously fell between 2015-16 and 2019-20; for OBCs, it either stayed stagnant or increased marginally. The number of students availing fell from 2.4 million in 2015-16 to 2.2 million in 2017-18, an 8.3% fall.
  • Despite increased demand, the post-matric scholarship scheme for SC students saw a decrease in the number of beneficiaries from 5.8 million in 2016-17 to 3.3 million in 2018-19, a 43% reduction.
  • The budget allocation for pre-matric and post-matric scholarships for the ST category stayed stagnant year after year. Between 2015-16 and 2017-18, the number of post-matric beneficiaries fell from 2.03 million to 1.86 million, an 8.4% cutback.
  • For the academic year 2018-19, the Ministry of Minority Affairs received 7.3 million fresh applications and 3.5 million applications for the renewal of existing pre-matric scholarships from students belonging to minority communities. Scholarship was disbursed to 2.9 million fresh applicants (40%) and 2.7 million (77%) renewals.

The Constitution, in Article 46, has directed the state “to promote with special care the educational and economic interests of the weaker sections of the people, in particular, of the Scheduled Castes and the Scheduled Tribes”.

Despite affirmative action, the proportion of disadvantaged communities in Indian institutions of higher education is smaller than their population shares, IndiaSpend had reported in a special series on reservation. If parity existed between the share of SCs and STs in the general population and participation in higher education, SCs would occupy a third more seats than they do now, while STs would occupy close to double the seats, we reported.

Falling allocation for pre-matric scholarships for SC and OBC

The Ministry of Social Justice and Empowerment (MSJE) is the nodal ministry for providing financial assistance to students from the SC and OBC categories while those from STs are provided for by the Ministry of Tribal Affairs. Two major schemes for all categories of disadvantaged students are pre-matric and post-matric scholarships, as we mentioned earlier.

The pre-matric scholarship scheme for SC, ST and OBC students was aimed at increasing enrolment from these sections and cutting the increasing drop-out numbers for Classes IX and X. The post-matric scholarship for SC, ST and OBC students was meant to enable them to complete their education.

The pre-matric scholarship for SC and OBC categories of students is ‘funds-limited’, that is, it depends on the budget and is not driven by demand. Between 2015-16 and 2019-20, the scholarship allocation for SCs fell continuously from Rs 843 crore to Rs 355 crore, a decline of 58%; and for OBCs, spending on scholarships either stayed stagnant or increased marginally. The number of students availing of the scholarship fell from 2.4 million to 2.2 million in the same period, a decline of 8.3%.

This trend coincided with an increased number of drops-out in Classes IX and X for SC and OBC categories: While the transition rate from secondary to higher secondary for general category students is 75.91%, for SC and OBC it is 63.05% and 63.57% respectively, as per the District Information System for Education or DISE.

The 12th Five Year Plan (2012-17) had recommended that the pre-matric scholarship for SCs be extended to classes I - VIII. But no budget was allocated, so the scheme was not upgraded.

Pre-matric scholarships are also provided for the children of those in occupations involving cleaning and prone to health hazards. But here the government has not fully utilised the funds allocated because states did not send proposals in time, as per the Parliamentary Standing Committee on Social Justice and Empowerment. As a result, the number of beneficiaries under the scheme fell from 340,000 in 2015-16 to 20,000 in 2017-18.

From its inception, the pre-matric scholarship for SCs was run as a central scheme with 100% funding coming from the Centre. However, with a change in the guidelines for fund-sharing, from 2019-20 onwards, the total funds demanded under the scheme would be shared between the Centre and the respective state in a 60:40 ratio, or there would be a notional allocation by the Centre based on the SC population of the state, whichever is lower.

As per the circular dated September 6, 2019, the union government has allocated Rs 300 crore notionally under this scheme, which means the central release is below the proposed budget of Rs 355 crore for 2019-20 (BE).

Post-matric aid remains underfunded

Similar trends emerge for post-matric scholarship schemes run by the MSJE. Introduced in 1944, this scholarship for SCs has long been the economic spine for students pursuing higher education. In 2006-07, the post-matric scholarship for OBCs was introduced, with the central government paying out 100% of the cost to state governments.

Despite increased demand, the post-matric scholarship scheme for SC students has been consistently underfunded. This reflects a decrease in the number of beneficiaries under the scheme from 5.8 million in 2016-17 to 3.3 million in 2018-19.

The inadequate budget allocation under these schemes is because of the gap between the funds demanded by the Department of Social Justice and Empowerment and those approved by the Ministry of Finance. In 2019-20 (BE), the department asked for Rs 7,125 crore ($1 billion) but got an allocation of Rs 2,927 crore ($410 million), a shortfall of Rs 4,198 crore ($590 million or 59%), according to the Standing Committee report

For OBC students, the demand was for Rs 2,500 crore ($350 million) while the allocation approved was of Rs 1,360 crore ($190 million), 54% less. As a result of this consistent budget cut, the department is using allocated funds to clear the backlog of pending scholarship but huge arrears remain to be cleared, said the report.

Stagnant allocation for STs

In 2016-17, the gross enrolment ratio (GER) for STs students at the elementary level was 99.57% against the all-India average of 93.55%. This falls to 17.2% at the higher education level, compared to the overall national GER of 26.3%, according to the All India Survey on Higher Education, 2018-19. ST students frequently drop out--of 100 children, only 57 continued from secondary to higher secondary level, DISE 2016-17 shows.

However, the government has not offered more financial assistance to encourage ST students to stay in school--the budgetary allocation for pre- and post-matric scholarship for the category has remained stagnant year after year.

Between 2015-16 and 2017-18, the beneficiaries under post-matric scholarship fell from 2.03 million to 1.86 million (8.4%). In 2019, a public interest litigation was filed in the Madras High Court against the government’s policy of not allowing SC/ST students to avail of post-matric scholarships while joining courses under the management quota in self-financing educational institutions.

In December 2019, the amount of pre-matric scholarship was revised from Rs 150 to Rs 225 per month for day scholars and from Rs 350 to Rs 525 per month for hostelers. However, the allocation fell from Rs 350 crore in 2018-19 (BE) to Rs 340 crore in 2019-20 (BE).

Minority scholarships far fewer than needed

The Ministry of Minority Affairs (MOMA) provides financial aid to minority students under three major scholarships schemes--pre-matric, post-matric and merit-cum-means. Under these, around 7 million scholarships can be disbursed to poor students from six notified minority communities--Muslims, Christians, Sikhs, Buddhists, Jains and Parsis.

For the academic year 2018-19, the ministry received 7.3 million fresh applications and 3.5 million applications for renewal of pre-matric scholarships. Of these, scholarship has been disbursed to 2.9 million fresh applicants (40%) and 2.7 million applications for renewal (77%). In the case of post-matric scholarships, fresh and renewal combined, the number of minority applicants was 2 million, but only 680,000 (34%) received the money.

Under the merit cum means scholarship, provided for professional and technical courses, the ministry has approved scholarships to 120,000 students in 2018-19, which is only 36% of the total applications.

In spite of increased demand for scholarships, the budgetary allocation for all three schemes has not increased significantly. The allocation in 2019-20 has actually declined in comparison to last year’s budget estimates or revised estimates.

(Kundu works with Centre for Budget and Governance Accountability (CBGA), New Delhi. She can be reached at

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