Union Budget 2021: Govt needs to emphasise skill development in education policy to support economy

For India to achieve Sustainable Development Goals (SDGs) by 2030 and to accomplish its vision of becoming a self-reliant $5 trillion economy, one of the fundamental requirements will be to focus and invest in education. In the recent past, the government has made significant strides in this sector, a monumental development being the National Education Policy (NEP) 2020 reforms that are currently underway. Therefore, the upcoming Union Budget 2021 will be key for two reasons; first, it is likely to provide an in-depth view of the implementation of NEP 2020 and secondly, this is the first Budget post-pandemic and hence, will be key about how the government plans to get the education sector back on track from the pandemic impact. Union Budget 2021 must emphasise on the following segments: We need to deepen our focus on skill development, right from the corporate sector to the low-income group youth ensuring Indians are equipped with the necessary skills to support and accelerate the economy. According to a survey report by FICCI, at least 9 percent Indians will be in jobs that do not exist currently and 37 percent of workforce will require radically changed skill sets to meet their employment demands. Another report by McKinsey highlighted the fact that as many as 87 percent of surveyed executives said that their organizations were either experiencing skill gaps or were expecting them to happen within the next few years. The pandemic has emphasized the need to fill this gap and has put a spotlight on the need to re-skill and up-skill citizens across levels and sectors. Hence, there is a need to grant appropriate stimulus to the skill development sector and ensure inclusive growth opportunities for all, as well as create a workforce that is ready to meet the global demands too. Secondly, education infrastructure is another important segment which the Union Budget should focus on. The pandemic forced over 1.5 million schools across India to close overnight, emphasising the necessity for digital education. Although in the post-pandemic ecosystem, digital education has been embraced, India still needs to build capabilities to support blended learning completely. According to a UNICEF report, only 24 percent of Indian households have the internet to access e-education. Therefore, education infrastructure lending is a necessity to aid the development of K12 schools across the country. As India shifts towards blended learning and the usage of technology become paramount, the government must consider granting ‘infrastructure status’ to education institutions to make quality education affordable and accessible for deserving Indian students. The focus from the government and easy availability of capital will induce an environment of innovation in the field of education, which can help bridge the demand and supply challenges in this sector. Budget 2021 should implement reforms such as refinancing of retail education loans for lower ticket size. Such a financing scheme, similar to the one available to housing finance companies (HFCs), can provide a boost to the education loan segment and contribute to liquidity management for non-banking financial companies (NBFCs). This in turn would provide the necessary momentum for NBFCs to create a stronger customer proposition and contribute to building the economy at large. The education sector is undoubtedly at the cusp of an exciting phase with policy push and technological advancements. We are positive about the growing inclination towards equitable and quality education and look forward to the upcoming Union Budget. We hope that the new directions will help bridge the existing educational gaps and secure a sustainable long-term growth structure that will further boost the economy. The writer is CEO, Avanse Financial Services