Education Financing in India: Navigating the Neo-Liberal Shift

Abstract: The focus of this paper is on analysing the changing nature of sources of education finance in India. The onset of a wave of liberalisation and privatisation in the last quarter of 20th century has shifted the policy orientation of developed and developing countries wherein more importance is accorded to private sector while the state’s role is shrinking in every economic activity including education. In line with the global trends, India has progressively been withdrawing its funding in social sector including education and providing more space to private service provider since the 1980s. Using various indicators related to different sources of educational financing, it is observed that privatisation wave is taking place at all levels of education- elementary, secondary and higher. The pace is fastest in case of higher education. Further, inter-state comparison of the increasing role of household level financing of education indicates that, in general, economically well-off states are leading the poor states in this trend. The shift in the sources of education finance (from public to private) may have far reaching implications for the economic development and smooth social transformation especially in a heterogeneous society like India.