“It is high time the Union Budget specifically incentivized the higher education sector. Giving tax incentives and easier funding can be a small but useful beginning…”
The common refrain among Indians is that our education system is outdated due to an over reliance on the Macaulay model. But the more practical problem is that India needs a smart and actionable plan for encouraging education. Easy funding, tax breaks, securitization of loans etc can be some of the solutions. A start needs to be made in this budget.
In the US, Sallie Mae, is a government sponsored institution that focuses on easy education funding, both for under graduate and post graduate education. Sallie Mae not only ensures that students get the required funding but also that such loans can be securitized, packaged and sold. This budget should make a serious attempt on these lines to set up a central institution which will handle risk sharing of student loans. Currently, donations made to R&D are given exemption. We hope that this budget will make an attempt to cover donations to approved higher educational institutions also under this category and the weighted deduction can be at 150-200% as an additional incentive.
Education costs have gone through the roof. Today tuition fees are included as a part of the Section 80C exemption. That needs to be separated as a separate section with a dedicated exemption limit of at least Rs.150,000 per annum, so that it is in tune with current costs. And lastly, this budget is expected to encourage companies to help its employees to re-skill. That can also be offered as a deductible expense for companies. All in all, it is hoped that this Union Budget 2015 will offer a major boost for education with a number of tax breaks. Investing in education needs to be made a priority.