Though on the first view, the budget appears to be great for education, a closer look shows a bunch more. To start with, the process of education and procuring of material to support a student's studies is just about to become costlier.
Notebooks and exercise books, earlier exempted from excise duty, will now attract 1% duty without CENVAT credit facility. Also, a general effective rate of 5% has been prescribed for these items and facilities and this includes items such as fountain pen ink, ball pen ink, geometry boxes, colour boxes and pencil sharpeners. This implies that the MRP of each of these items is just about to increase. Paper will also not be exempt from excise duty anymore, thus eventually make text books costlier as well.
Most of the direct sops to educational institutions have been provided to institutes in poll bound states.
The increase for RTE is actually an effective Rs 2,000 Cr only, since the budget had been increased by Rs 4,000 Cr last year.
More importantly, the increase in outlay for primary education is just a Rs 3,000 Cr which effectively is a mere adjustment for inflation. The much larger and disturbing trend is that of this total amount of Rs 29,000 Cr, Rs 18,000 Cr comes from Prathamik Shiksha Kosh - the non-lapsable fund where 2% education cess is collected. The ASER report that we talked about earlier shows in fact exactly the correct trend and perhaps is also a forecast (in a manner ) of the way elementary education will continue to be treated in our country.