Tuesday, July 7, 2009

Higher education: thrust area in India Finance Budget 2009

The newly elected United Progressive Alliance (UPA) government has made higher education its thrust area with a view to increasing the gross enrollment ratio to 15 per cent by the end of the 11th Five Year Plan.

The key announcement in this regard was made by the Union Finance Minister Pranab Mukherjee in his budget speech on Monday, in the form of a student loan for economically weaker sections. Under this scheme, eligible students will be provided full interest subsidy during the period of moratorium. It will cover loans taken by such students from scheduled banks to pursue any of the approved courses of study, in technical and professional streams, from recognised institutions in the country. An estimated 0.5 million students would benefit from this scheme.

He also extended the scope of Section 80E of the Income-tax Act — providing tax exemptions for educational loans to pursue higher studies in specific areas — to cover all sectors including vocational studies after school.

While the Plan outlay for higher education has been raised from Indian Rs. 6,8000 million in 2008-09 to Rs. 9,5960 million, the allocation for school education and literacy remains static at Rs. 26,8000 million. However, the non-Plan outlay in both departments has gone up sizeably; primarily owing to the increase in salaries following the implementation of the Sixth Pay Commission recommendations.

Ref: Hindu Daily, Tuesday, 7 July 2009

Full interest subsidy on educational loans for poor students

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