Financing for equity in pre-primary education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
Key financing indicators (UIS Data)
The official entrance age to pre-primary education is 3 (UIS 2024 estimates). No data is found regarding the number of years of free pre-primary education granted in legal frameworks and the number of years of compulsory pre-primary education granted in legal frameworks. The net enrolment rate for pre-primary for both sexes is 56.69% (UIS 2024 estimates).
Governance
Pre-primary education financing in India is split across two central ministries: the Ministry of Women and Child Development, which traditionally funded early childhood services through the Integrated Child Development Scheme (ICDS) (now restructured as Saksham Anganwadi and POSHAN 2.0) for delivery via Anganwadi Centres. The Ministry of Education, through its Department of School Education and Literacy, finances pre-primary classes integrated in government primary schools mainly through Samagra Shiksha and, in some states (for example, Himachal Pradesh, Maharashtra, Odisha, Rajasthan, Madhya Pradesh, and Kerala), the Strengthening Teaching-Learning and Results for States (STARS) Project, with overall budget allocation approved through the Union Budget and co-funded and implemented by state governments.
Tuition-free status
Pre-primary education is not guaranteed to be free by national policy.
1. Education resources to subnational governments
Centre-to-state public financing for pre-primary education is routed mainly through centrally sponsored schemes (CSS), with the largest channel being Anganwadi Services under Saksham Anganwadi and POSHAN 2.0. The Centre transfers funds to states/union territories (UTs) using explicit cost-sharing ratios that differ by component and by state category: for “general” components the ratio is 60:40 for states and UTs with a legislature (90:10 for North-Eastern and Himalayan states and including Jammu and Kashmir; and 100:0 for UTs without a legislature). For salaries and honoraria, the cost share is more state-heavy in general-category states (25:75) and for supplementary nutrition the sharing pattern is split differently again (commonly 50:50 in general-category states).
More recently, the Ministry of Finance has strengthened centrally sponsored schemes (CSS) fund-flow controls by requiring monitoring of releases and utilisation through the Public Finance Management System (PFMS) and by pushing a Single Nodal Account (SNA) architecture to reduce parked balances and enable tighter end-to-end tracking of central releases to states under centrally sponsored schemes (CSS).
Alongside the above channel, some early-learning inputs also flow from the Centre to states via the education-sector Samagra Shiksha scheme (for example, early-years initiatives aligned to the 2020 National Education Policy (NEP)), where the standard centre-state sharing pattern is also similar to Saksham Anganwadi and POSHAN 2.0.
This centre-to-state architecture overwhelmingly finances public provision (Anganwadi centres and, where applicable, government-school-linked pre-primary initiatives), while private pre-primary education is only weakly integrated into public financing: most private pre-schools rely primarily on household fees, with any public support usually limited to state-specific partnerships/pilots or indirect support.
2. Education resources to institutions
As mentioned above, Anganwadi centres and government schools offering pre-primary classes receive government subsidies, but these subsidies are not provided as autonomous block grants or per-child institutional transfers. Instead, funding is input-based and norm-driven, with the central government financing specific components such as supplementary nutrition, learning materials, training, and infrastructure through centrally sponsored schemes, and states and districts acting as intermediaries in the fund-flow chain.
The 2009 Right of Children to Free and Compulsory Education Act requires private unaided schools and certain special category schools to reserve at least 25% of seats for children from disadvantaged groups and economically weaker sections at the entry level, including Grade 1 or pre-primary classes, and to provide free education to these students. The government reimburses these schools for the per-child expenditure incurred in providing such education. Subsequent clarifications have specified that residential private unaided schools that do not offer Grade 1 as an entry point are not obligated to reserve 25% of seats for disadvantaged children.
3. Education resources to students and families
The Department of School Education and Literacy of the Ministry of Education does not provide direct financial support mechanisms to parents or children for pre-primary education, such as subsidies, vouchers, cash transfers, or tax benefits.
However, parents may claim an income-tax deduction under the 1961 Income Tax Act (amended in 2025) (Section 80C) for tuition fees paid to recognised institutions, including pre-nursery and nursery classes, within the overall deduction ceiling of INR 150000 per year for up to two children. This mechanism constitutes an indirect demand-side fiscal incentive administered by the Ministry of Finance. From an equity perspective, the benefit is regressive, as it accrues primarily to middle- and higher-income households within the tax net and does not target disadvantaged children or low-income families, who are less likely to pay income tax.
4. Social policies and family support programmes
PM CARES for Children Scheme
With the Ministry of Women and Child Development as the nodal ministry, it is a targeted child social protection programme that supports a narrowly defined vulnerable population - children who lost one or both parents or their legal guardian due to the COVID-19 pandemic - and provides assistance spanning the educational life cycle from pre-primary through higher education. For pre-primary-age children (below six years), beneficiaries are linked to Anganwadi-based early childhood care and education services, including pre-school education alongside nutrition and health support. The scheme provides direct financial transfers through a dedicated corpus and stipends, positioning it as a targeted demand-side education support mechanism embedded within a broader child protection and welfare package.
Mission Vatsalya (formerly Child Protection Services)
With the Ministry of Women and Child Development as the nodal ministry, it is a structural child welfare and social protection programme that targets children in need of care and protection, including orphans, abandoned children, children in institutional or foster care, and other vulnerable groups identified under the Juvenile Justice framework. Education is explicitly incorporated into the programme’s mandate through individualized care and rehabilitation plans, with maintenance and sponsorship grants intended to cover schooling-related costs such as fees, learning materials, and other educational needs for children under protection systems.
This profile was reviewed by Dr. Pradeep Kumar Choudhury, Assistant Professor at Jawaharlal Nehru University; and M.R. Narayana, Professorial Consultant (Academic & Research) at the Fiscal Policy Institute of the Government of Karnataka.
