The first budget post demonetisation measures no further concessions or provisions for students aspiring for Education Loan.
The Finance Minister, Arun Jaitley in Lok Sabha on February 1, 2017, has announced the most awaited budget for the financial year 2017-18. Since it was the first budget post demonetization, the expectations were comparatively high for all the sectors.
Considered as one of the 9 pillars of growth, the Minister of Finance, Arun Jaitley stated about the need of reforming the Indian education system and pegged an outlay of Rs79, 685.95 crores, with a rise of 9.9%, for the education sector for the financial year 2017-18. However, this leads to no relief for the students willing to apply for education loans. In a country like India, where a large number of youths relies on education loan for their higher studies, no further concessions or provisions were introduced in terms of education loan.
As per the Section 80E, which covers education loan taken for higher studies, the deductions are allowed interest education loan. Along with the higher education, Section 80E also covers various vocational courses, which are covered under the skill development initiative of the government.
The Central Scheme
The Ministry of Human Resources Development has set up the Central Scheme in collaboration with Indian Banks’ Association with an aim to provide the concession in interest on the education loan to the students belonging to the economically weaker categories of the society. This scheme provides subsidy in the interest charged by the banks for the moratorium period i.e. one year after completing the course or six months after getting the job, whichever is earlier.
Only those students whose parents’ income from all the sources is under INR 4.5 lacs per annum are eligible for the scheme. Students can avail the benefits of the scheme only once during under-graduation and post-graduation. Moreover, in the case of the student being expelled by the institute or leaves the course in mid-semester cannot avail the benefits of the scheme.
Some of the other corporations that provide education loan for individual beneficiaries are:
Corporations That Provide Education Loans
- National Minorities Development and Finance Corporation (NMDFC)
- National Backward Classes Finance and Development Corporation (NBCFDC)
- The National Safai Karamcharis Finance and Development Corporation (NSKFDC)
- National Handicapped Finance and Development Corporation (NHFDC)
- National Scheduled Castes Finance and Development Corporation (NSCFDC)
However, the government has introduced some major provisions to reform the Indian Education systems.
Some of the highlights in the Union Budget 2017-18 for education sector were as follows:
Key Highlights of Budget 2017
The Finance Minister, Arun Jaitley has proposed to established two new AIIMS institutes in Jharkhand and Gujarat.
There would be special emphasis on Science education and make the curriculum more flexible.
A system of measuring learning in schools will be launched to measure the annual outcome of the schools.
An Innovation Fund will be set up in Secondary Education that will specially focus on 3,479 educationally backwards blocks. “To create innovative fund for secondary education for ensuring universal access, gender parity and quality improvement.” the Finance Minister said.
The budget proposed to establish a National Testing Agency to conduct all entrance exams for higher education. This will free the existing exam conducting bodies such as CBSE and AICTE from their responsibilities to conduct the exams so that they can focus on improving the quality of education.
The Finance Minister also proposed to introduce a national ranking and accreditation system basis, which the colleges will be identified. “The colleges will be identified based on accreditation and ranking, and given autonomous status.” the Finance Minister, Arun Jaitley said.
In addition to this, Arun Jaitley also proposed to introduce 5000 new seats for postgraduate medical science courses, MD/ MS annually.
Also, take a look at Important Reforms in the Education Sector in Budget 2017