NEP’s 6% GDP Education Target Still Unmet, Parliament Panel Seeks 8–10% Annual Funding Hike

Parliament’s latest funding warning puts pressure on the Centre and states to spend more on colleges, scholarships, research facilities and student accommodation.

Key Highlights

• India's Parliamentary Education Committee recommended the government fund higher education by 8-10% annually to counter inflation.
   
• In 2021-22, India used 4.12% of its GDP to fund education. With the introduction of the NEP 2020, this figure has aimed to reach 6%.

The 381st Action Taken Report was presented in New Delhi by Digvijaya Singh for the Parliamentary Standing Committee on Education on 16 June 2026. This report assessed actions taken by the government after the committee’s higher education grants report for the year 2025-26, which was the 364th report.

With the current education budget being termed insufficient, the New Indian Express cited the committee’s report to justify an education budget increase of 8-10% to prevent public educational institutions losing financial support.This will hinder appointing enough teachers and building hostels and later hinder upgrading labs, providing scholarships, and offering more educational services.

What Will The Parliamentary Panel Propose?

For 2021-2022, the committee said that 4.12% of GDP on Education stands below the 6% goal of the National Education Policy, 2020.

The panel also relied on educational expenditure of some neighboring states, which was published by The Economic Times on June 17, 2026.

For a student in a district with few public colleges, the effect is fairly direct. More funded seats can reduce travel costs, private tuition fees, and dependence on loans. Better hostels also decide whether many women can study outside their hometowns.

How Could Higher Funding Affect Students and Families?

The committee flagged limited growth in male and female gross enrollment ratios between 2018 and 2023. NEP aims to raise the higher education GER to 50% by 2035, a target that needs more colleges, teachers, and affordable places.

Budget figures show an increase, though higher education received only the bottom end of the panel’s suggested range.

PRS Legislative Research published these figures on 17 February 2026. The numbers point to a familiar problem. An allocation may rise on paper, yet inflation can still leave universities buying fewer books, computers or laboratory supplies.

What Do Experts And The Committee Suggest?

The government told the committee that allocations depend on departmental requirements and availability. Budget limits. The committee wanted a steadier approach, with yearly increases that protect actual purchasing power.

Spending quality also needs attention. Research of the PM-USHA scheme by PRS showed that the average budget utilization for the three years, 2022-2025, was 16% of the approved budget. A reduction in the approval time for projects, implementation of public financial management systems to ensure real-time tracking of funds, and establishing rigid timelines for fund disbursements would most likely eliminate the issue of unutilized funds. 

A LoansJagat report found that 21,967 PM-Vidyalaxmi loans were disbursed from 55,887 applications.

Conclusion

The 6% promise remains unfinished. Larger budgets will help only when grants reach colleges on time and students see the benefit.

FAQs

What Do NEP 2020 Mandates Target Spending On Education To Be?

Under NEP 2020, the target for public education spending will be 6% of GDP.

What Is The Allocation For Higher Education For The Year 2026-27?

The Department of Higher Education was allocated ₹55,727 crore, an increase of 8%.

What Is The Rationale Behind 8-10% Annual Increase?

The allocated amount should increase to keep pace with inflation and the cost of running the institutions.

Why Is Education Budget Still Below The NEP Target Of 6% GDP?

Over budget constraints, competing needs and priorities, poor financial conditions of the states, underutilization of funds all result in lower spending on education.

How To Improve Education Infrastructure Reach To 50% GER By 2035?

Build more colleges and teaching faculty, increase hostel accommodation, invest more in digital education, and improve state public universities.