1. Overall Education Financing Mechanisms

2. Policies and Programmes to Provide Resources to Schools

3. Education Policies and Programmes to Provide Resources to Sudents and Families

4. Social Policies and Programmes to Provide Resources to Students and their Families


  1. Overall Education Financing Mechanisms

Compulsory and free education last 8 years from age 6 to age 14. Free education means that education is tuition free and supplemented by provision of scholarships, free uniforms, textbooks and other measures that address economic constraints. There is no entitlement to free education in early childhood or secondary education.  

The central and states governments have responsibility in education policymaking. Although the central government plays a key role in providing national policy direction and allocates financial resources for education, nearly 80% of social sector spending comes from the States’ budget. Under this decentralized administration, panchayati raj institutions (system of local self-government institutions) and urban local bodies are primarily responsible for education at the community level. There are 496.5m school aged people and in 2016, the government spent 3.84% of its GDP and 14.05% of its government expenditure in education. 

The India Finance Commission defines the budgetary relationship between the central government and states. It makes recommendations on the distribution of resources by receiving states’ requirements on expenditures. For the year 2020, the commission recommends targeted funding for 7 sectors including pre-primary education for all children. In addition, the funding mechanism seeks to provide resources to states through results-based funding for 6 sectors including education. The indicators for education are learning scores in language and mathematics, and transition rates from upper primary to secondary for girls. Furthermore, for secondary education, the funding ratio between central and state government is 60:40 except for 8 North Eastern and 3 Himalayan states for which the ratio is 90:10.   

Private schools are of two kinds: private-aided (PA) schools, and pure private or private unaided (PUA) schools. More than 95%of their expenditures are covered by the government. The government requires private schools to set aside 25% of their seats for poor students and reimburses the tuition for those students up to the cost of a public school. 


  1. Policies and Programmes to Provide Resources to Schools

Scheme for Infrastructure Development in Minority Institutes (IDMI) 

This program seeks to strengthen school infrastructure in minority institutions to enhance the quality of education of minority students. The program focuses on towns in which at least 20% of the population is from a minority. The program finances private aided and unaided elementary, secondary and senior secondary schools with USD 7,005 (INR 500,000) per school to build additional classrooms, science or computer lab rooms, library rooms, toilets, drinking water facilities and hostel buildings for children especially for girls. In 2014, the program financed 229 institutions or 0.01% of the total number of schools, and spent USD 34,889 (INR 2.49m) or 0.02% of the budget of the Departments of Higher Education and Department of School Education & Literacy.  

Inclusive education

It is an effort to make schools available to the Scheduled Caste (SCs) and Scheduled Tribes (STs), and Muslim children into elementary school. Such efforts include expanding infrastructure and providing uniforms and books. In 2016, 88 Muslim dominated districts or 12% of districts in India were benefited with a budget allocation of USD 2.8bn or 36% of the education budget including: USD 178 million (INR 12.7 billion) or 19% of the SSA budget (The Sarva Shiksha Abhiyan is a program implemented since 2001 to achieve the universalization of elementary education), 109 ST dominated districts or 15% of districts with USD 1.3 billion (INR 99.8 billion) or 13% of the SSA budget allocation, and 61 SC dominated districts or 8.4% of districts with USD 1.37 billion (INR 98.3 billion) or 19% of the SSA budget allocation).   

Children with special needs (CWSN)

It is a program for children with special needs in elementary school age including the identification, assessment, appropriate educational placement, individualized education plan, provision of aids and appliances, teacher training, resource support, and removal of architecture barriers. The allocation provided is of USD 42 (INR 3,000) per child. In 2016, 2.37 million children with special needs (88.4% of children identified as having special needs) were enrolled in school and this program received an allocation of USD 105.4 million (INR 7.5 billion) or 1.34% of the 2016 education budget7.  

Scheme for Inclusive Education for Disabled at Secondary Stage (IEDSS) 

This program provides assistance for the inclusive education of the disabled children in classes IX-XII to continue their education after elementary school. The program covers all children in secondary stage in Government, local body and Government-aided schools, with one or more disabilities. The program provides medical and educational assessment, books, uniforms, transport allowance, lodging facilities among others. The central government provides USD 42 (INR 3000) per student per year and the states provide a scholarship of USD 8.4(INR 6008) per child per year. In the year 2016, 220,500 students or 0.04% of the school-aged population were reached through this program and in the same year USD 9.5m (INR 68 million) or 0.12% of the education budget were assigned to this program.  


  1. Education Policies and Programmes to Provide Resources to Students and Families

National Means-cum-Merit Scholarship Scheme 

This program is part of the Direct Benefit Transfer (DBT), a group of social welfare schemes that transfer subsidies directly to beneficiaries. It awards scholarships to students of economically disadvantaged families studying on class VIII (last year of elementary school) to prevent drop out and encourage them to continue to secondary school in classes IX to XII of State Government, Government aided and local body schools. The award is of USD 84 (INR 6000) per student per year. Eligibility is based on family incomes of not more than USD 2093 (INR 1, 50,000). In 2016, 64,426 scholarships (or 0.01% of the school-aged population) and spent USD 581,076 (INR 41.6m) or 0.007% of the education budget. This program is under the Department of School Education and Literacy.  

National Scheme of Incentive to girls for Secondary Education  

This program is part of the Direct Benefit Transfer (DBT). This program seeks to promote enrolment of girls aged 14-18 in secondary school who pass class VIII and girls who pass class VIII examination in Government, Government-aided or local body schools. Married girls and girls in private un-aided schools and in schools run by Central Government are excluded. USD 42 (INR 3000) are deposited under the girl’s name as a fixed deposit and girls can withdraw it once they reach 18 years of age. In 2016, the program was allocated USD 6.2m (INR 446.5m) or 0.07% of the education budget and served 147,577 girls or 0.029% of the school aged population. This program is under the Department of School Education and Literacy. 

  1. Social Policies and Programmes to Provide Resources to Students and their Families

The targeted public distribution system (TPDS)Mid-Day Meal Scheme 

It is the largest safety net program in India. The program targets nearly 800m people or 59% of the population and in 2011, it cost USD 7bn or 1% of the GDP. In 2013, the scope and mandate of the TPDS expanded through passage of the National Food Security Act (NFSA). The NFSA includes entitlements from 3 programs including: the TPDS, which targets food-insecure households; the Mid-Day Meal Scheme, a school-based feeding program targeting children ages 6–14 years; and Integrated Child Development Services, a supplementary feeding program targeting children between 6 months and 6 years and pregnant and lactating women.  

The mid-day meal scheme covers all children studying in I-VIII classes in government and government-aided schools, special training centers, and madrasas and maqtabs under universal elementary education (Sarva Shiksha Abhuyan (SSA)). The program seeks to encourage poor children from disadvantage groups to enroll and attend school by providing them with a cooked-mid day meal. In 2016, 100.3m children or 20% of the school aged population in 1.15m eligible schools were covered and the program spent USD 1.08bn (INR 77.34bn) or 0.03% of the GDP. 

Chief Minister’s Girl Child Upliftment Cash Transfer (Mukhyamantri Kanya Utthan Yojana) 

In 2018, the government of Bihar launched a state-wide universal cash transfer programme for girls. The program seeks to improve girls’ well-being from birth to 21 years old and to promote the value of girls in society.  

The total amount of the grant is USD 800 disbursed at various stages of life, starting from birth and continuing through completion of secondary school and college graduation. A maximum of two girls can benefit within a family. Bihar has allocated 1.26% of its budget to the programme and aims to benefit 16m girls or 16% of the state’s population.

Last modified:

Thu, 21/01/2021 - 16:50