Why Scholarships Are Important For Education

While there are a series of issues that the Indian education system is experiencing, the major one is poor quality of education in government schools and colleges, where a majority of underprivileged children of our society go for education. With an allocation of Rs. 94,800 crores for the education sector in the previous Union budget, and Rs. 99,300 crores in budget 2020-21, we haven't been able to prevent the high level of dropout rate in the schools, especially post class 10th. 

Apart from financial constraints, one of the major reasons for students dropout is poor quality of education in government institutes. This makes students weigh their options and opt for a job in the informal sector, so they can bring a salary home sooner than expected. The students must be enabled to pursue their education in quality private institutions to ensure that they continue their education post 10th standard. To achieve such a purpose, scholarships become an important tool. 

At a time when all levels of educational institutions across the country are increasing their fees to overcome funding cuts, there is an urgent need to improve the allocation to scholarships. 

As per an assessment by IndiaSpend, in August 2019, there was an increase in the board exam fees for Classes X and XII in all CBSE schools. 

While for general category students, the fee hiked from Rs 750 to Rs 1,500 (a 100% increase), for SC and ST students, it hiked from Rs 50 to Rs 1,200 (a 2,300% hike). 

Institutions of higher education such as the IIT, IIMC, AIIMS, and central universities such as JNU too have raised their fees. 

On the other hand, between 2014-15 and 2019-20, the share of education expenditure in the total Union budget fell from 4.1% to 3.4%. 

Hence, the government needs to seriously improve in all dimensions of scholarship allocation - awareness, transparency, simplification of application process and timely disbursals.

This shortage of funds is visible in the amount allocated for scholarships as well as the decreasing number of beneficiaries across categories of scholarships.

Given the fiscal constraint being faced by the Indian government, the situation cannot improve much in coming years as well. 

At present, both central and state governments are offering scholarships of more than Rs. 10,000 crores annually for pre matric, post matric and higher education. However, this  has still not impacted the Gross Enrolment Ratio (GER) in a meaningful way.  To make matters worse, we continue to come across news stories of corruption and scandals surrounding scholarship distribution.

Apart from government, private sector CSR funding in the education sector (which was Rs 15,742 crore during between 2014 and 2019) can also be directed towards scholarships or education wallets. 

The education wallets gives the students the flexibility to utilize their scholarship fund the way they want - whether its for settling an education loan, buying stationary, uniform and books or paying off the admission fee or coaching fee. 

Students will also have flexibility to pursue higher education in their institute of choice without worrying about financial implications. In this way, education wallets or scholarships will not only improve the Gross Enrollment Ratio but also improve the quality of education received by students. In the long run, such measures are expected to help us tackle the problem of workforce participation in the formal sector effectively.