Since the rollout of the National Education Policy (NEP) 2020, the Union government has repeatedly described the current phase as a transformational moment for India’s education system.
From Parliament to public rallies, ministers have framed the policy as a structural overhaul, promising multi-disciplinary universities, expanded access, digital classrooms, global rankings, and a Gross Enrolment Ratio (GER) of 50 per cent in higher education by 2035.
Budget speeches have highlighted record allocations, new IIT infrastructure, AI Centres of Excellence, university townships, and expanded flagship schemes. The ministry of education’s allocation has risen from Rs 93,224 crore in 2021-22 to Rs 1,39,289 crore in 2026-27, an increase the government has presented as evidence of sustained public investment.
But expenditure data placed before Parliament shows a less publicised trend: persistent underspending.
Persistent underspending
According to a Rajya Sabha reply dated February 11 to Trinamool Congress MP Derek O’Brien, the ministry of education has fallen short of its own revised estimates every year from 2019-20 to 2024-25.
In 2019-20, Rs 5,324 crore remained unspent. In 2021-22, the gap widened to Rs 7,171 crore. In 2023-24 and 2024-25, despite allocations exceeding Rs 1 lakh crore, the ministry underspent by Rs 5,809 crore and Rs 3,709 crore, respectively.
Underspending in government departments is not uncommon, particularly in a federal system where implementation depends on states and utilisation certificates. However, the year-on-year quantum becomes politically and fiscally significant in the context of the NEP’s expansion narrative, especially when education spending as a share of GDP has remained well below the long-promised 6 per cent benchmark, first articulated in 1968 and reiterated in 1986, 1992 and again in 2020.
Over the same period, the Centre announced Rs 11,828 crore for expanding five newer IITs, Rs 990 crore for three AI Centres of Excellence, and a Rs 500 crore Centre of Excellence in Education.
Cuts in scholarships
The contrast becomes sharper when viewed alongside cuts to scholarship programmes.
Minority scholarship schemes such as pre-matric, post-matric and merit-cum-means, which saw near-total utilisation in 2020-21, were not approved beyond 2021-22. Allocations were sharply reduced, and utilisation, which once hovered close to 100 per cent, has plunged below 10 per cent in recent years.
The government cited “overlaps” with other schemes and emphasised easier access to loans as a rationale for discontinuation.
At a time, when thousands of crores within the broader education budget remain unspent annually, the rollback of direct scholarship schemes raises questions about prioritisation rather than fiscal constraint, experts say.
The shift also aligns with a broader policy emphasis on credit-based access, including expansion of education loans, rather than grant-based support.
The effects, faculty members argue, are visible on campuses.
“There is what is on paper, and then there is what we are actually experiencing. Our experience is that fees are continuously being increased, and students are being pushed towards loans that they have to repay,” said Abha Dev Habib, a teacher at Delhi University’s Miranda House.
No fresh allocation
Delhi University was the first to roll out the four-year undergraduate programme under the NEP and is among the institutions navigating the financial implications of reform-led expansion.
“Any new course that is being introduced now is largely in self-financing mode. Earlier, the UGC would provide grants to start new courses, but there is no fresh budget allocation coming to universities for expansion. Institutions are being asked to manage on their own,” said Habib.
“The fourth year has been implemented without the government providing additional funds. The EWS expansion was also rolled out without giving universities any extra money. So, the question is, where is the funding supposed to come from?” she said.
Education remains in the Concurrent List, and implementation of central schemes depends significantly on states and institutions. The parliamentary reply does not specify reasons for the underspending.
Taken together, rising headline allocations, ambitious structural reforms, recurring expenditure gaps, and shrinking direct scholarship support reveal a tension at the heart of India’s education policy moment: the promise of transformation on paper versus the reality of limited spending and shifting priorities.
