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In the past few months, retail prices of petrol and diesel have consistently increased to all-time high levels. On October 16, 2021, the retail price of petrol in Delhi was Rs 105.5 per litre, and that of diesel was Rs 94.2 per litre. In Mumbai, these prices were even higher at Rs 111.7 per litre and Rs 102.5 per litre, respectively.
The difference in fuel retail prices in the two cities is due to the different tax rates levied by the respective state governments on the same products. In this blog post, we look at the tax components in the price structure of petrol and diesel, the variation in these across states, and the major changes in taxation of these products in the recent years. We also discuss changes in the retail prices over the past few years and how it compares vis-à-vis the global crude oil prices.
Taxes make up around 50% of the retail price
Public sector Oil Marketing Companies (OMCs) revise the retail prices of petrol and diesel in India on a daily basis, according to changes in the price of global crude oil. The price charged to dealers includes the base price set by OMCs and the freight price. As on October 16, 2021, the price charged to dealers makes up 42% of the retail price in the case of petrol, and 49% of the retail price in the case of diesel (Table 1).
The break-up of retail prices of petrol and diesel in Delhi (as on October 16, 2021), shows that around 54% of the retail price of petrol comprises central and states taxes. In the case of diesel, this is close to 49%. The central government taxes the production of petroleum products, while states tax their sale. The central government levies an excise duty of Rs 32.9 per litre on petrol and Rs 31.8 per litre on diesel. These make up 31% and 34% of the current retail prices of petrol and diesel, respectively.
Table 1: Break-up of petrol and diesel retail prices in Delhi (as on October 16, 2021)
Component |
Petrol |
Diesel |
||
Rs/litre |
% of retail price |
Rs/litre |
% of retail price |
|
Price Charged to Dealers |
44.4 |
42% |
46.0 |
49% |
Excise Duty (levied by centre) |
32.9 |
31% |
31.8 |
34% |
Dealer Commission (average) |
3.9 |
4% |
2.6 |
3% |
Sales Tax/ VAT (levied by state) |
24.3 |
23% |
13.8 |
15% |
Retail Price |
105.5 |
100% |
94.2 |
100% |
Note: Delhi levies 30% VAT on petrol and 16.75% VAT on diesel.
Sources: Indian Oil Corporation Limited; PRS.
While excise duty rates are uniform across the country, states levy sales tax/ Value Added Tax (VAT) which varies across states. For instance, Odisha levies 32% VAT on petrol, while Uttar Pradesh levies 26.8% VAT or Rs 18.74 per litre, whichever is higher. Refer to the table 3 in annexure for sales taxes/VAT levied across the country. The figure below shows the different tax rates levied by states on petrol and diesel. In addition to the tax rates shown in the graph, many state governments, such as Tamil Nadu, also levy certain additional levies such as cess (Rs 11.5 per litre).
Figure 1: Sales tax/VAT rates levied by states on petrol and diesel (as on October 1, 2021)
Note: The rates shown for Maharashtra are averages of the rates levied in the Mumbai-Thane region and in the rest of the state. Only percentages are being shown in this graph.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
Note that unlike excise duty, sales tax is an ad valorem tax, i.e., it does not have a fixed value, and is charged as a percentage of the price of the product. This implies that while the value of excise duty component of the price structure is fixed, the value of the sales tax component is dependent on the other three components, i.e., price charged to dealers, dealer commission, and excise duty.
Retail prices in India compared to global crude oil price
India’s dependence on imports for consumption of petroleum products has increased over the years. For instance, in 1998-99, net imports of petroleum products were 69% of the total consumption, which increased to around 95% in 2020-21. Because of a large share of imports in the domestic consumption, any change in the global price of crude oil has a significant impact on the domestic prices of petroleum products. The two figures below show the trend in the price of global crude oil and retail prices of petrol and diesel in India, over the last nine years.
Figure 2: Trend of the global crude oil price vis-à-vis retail prices of petrol and diesel (in Delhi)
Note: Global Crude Oil Price is for the Indian basket. Petrol and diesel retail prices are for Delhi. Figures reflect average monthly price.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
Between June 2014 and October 2018, the retail selling prices did not adhere to change in global crude oil prices. The global prices fell sharply between June 2014 and January 2016, and then subsequently increased between February 2016 and October 2018. However, the retail selling prices remained stable during the entire period. This disparity in the change in global and Indian retail prices was because of the subsequent changes in taxes. For instance, central taxes were increased by Rs 11 and 13 between June 2014 and January 2016 on petrol and diesel respectively. Subsequently, taxes were decreased by four rupees between February 2016 and October 2018 for petrol and diesel. Similarly, during January-April 2020, following a sharp decline of 69% in the global crude oil prices, the central government increased the excise duty on petrol and diesel by Rs 10 per litre and Rs 13 per litre, respectively in May 2020.
Sharp increase in excise duty collections
As a result of the increase in excise duty in May 2020, the excise duty collection increased sharply from Rs 2.38 lakh crore in 2019-20 to Rs 3.84 lakh crore in 2020-21. The year-on-year growth rate of excise duty collection increased from 4% in 2019-20 to 67% in 2020-21. However, sales tax collections (from petroleum products) during that period remained more or less constant (Figure 3).
Figure 3: Excise duty and sales tax/ VAT collection from petroleum products (in Rs lakh crore)
Note: The excise duty component in the figure includes cess on crude oil.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
Share of states in excise duty has decreased over the years
Though central taxes (such as excise duty) are levied by the centre, it has only 59% of the revenue from these taxes. The remaining 41% of the revenue is required to be devolved to the state governments as per the recommendations of the 15th Finance Commission. These devolved taxes are un-tied in nature, states can spend them according to their own discretion. The excise duty levied on petrol and diesel consists of two broad components: (i) tax component (i.e., basic excise duty), and (ii) cess and surcharge component. Of this, only the revenue generated from the tax component is devolved to states. Revenue generated by the centre from any cess or surcharge is not devolved to states. Currently, the Agriculture Infrastructure and Development Cess, and the Road and Infrastructure Cess are levied on the sale of petrol and diesel in addition to the surcharge.
In the Union Budget 2021-22, the Agriculture Infrastructure and Development cess on petrol and diesel was announced at Rs 2.5 per litre and Rs 4 per litre, respectively. However, simultaneously, the basic excise duty and surcharge were reduced by equal amounts, so that the overall rate remains the same. Essentially, this provision shifted a revenue of Rs 1.5 per litre of petrol and Rs 3 per litre of diesel from the states’ divisible pool of taxes to the cess and surcharge revenue, which is entirely with the centre. Similarly, over the last four years, the share of tax component in the excise duty has decreased by 40% in petrol and 59% in diesel (table 2). At present, majority of the excise duty levied on petrol (96%) and diesel (94%) is in the form of cess and surcharge, due to which it is entirely under the centre’s share (Table 2).
Table 2: Break up of excise duty (Rs per litre)
Excise duty |
Petrol |
Diesel |
||||||
Apr-17 |
% share of total |
Feb-21 |
% share |
Apr-17 |
% share of total |
Feb-21 |
% share |
|
Tax (devolved to states) |
9.48 |
44% |
1.4 |
4% |
11.33 |
65% |
1.8 |
6% |
Cess and surcharge (centre) |
12 |
56% |
31.5 |
96% |
6 |
35% |
30 |
94% |
Total |
21.48 |
100% |
32.9 |
100% |
17.33 |
100% |
31.8 |
100% |
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS
As a result, the devolution to states out of the excise duty has declined over the last four years. Even though the excise duty collections have increased sharply between 2019-20 and 2020-21, the devolved component has declined from Rs 26,464 to Rs 19,578 (revised estimate) in the same period.
Annexure
Table 3: Sales taxes/VAT rates levied on petrol and diesel across states (as on October 1, 2021)
State/UT |
Petrol |
Diesel |
Andaman & Nicobar Islands |
6% |
6% |
Andhra Pradesh |
31% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess an d Vat thereon |
22.25% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess and Vat thereon |
Arunachal Pradesh |
20% |
13% |
Assam |
32.66% or Rs.22.63 per litre whichever is higher as VAT minus Rebate of Rs.5 per Litre |
23.66% or Rs.17.45 per litre whichever is higher as VAT minus Rebate of Rs.5 per Litre |
Bihar |
26% or Rs 16.65/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax) |
19% or Rs 12.33/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax) |
Chandigarh |
Rs.10/KL cess +22.45% or Rs.12.58/Litre whichever is higher |
Rs.10/KL cess + 14.02% or Rs.7.63/Litre whichever is higher |
Chhattisgarh |
25% VAT + Rs.2/litre VAT |
25% VAT + Rs.1/litre VAT |
Dadra and Nagar Haveli and Daman and Diu |
20% VAT |
20% VAT |
Delhi |
30% VAT |
Rs.250/KL air ambience charges + 16.75% VAT |
Goa |
27% VAT + 0.5% Green cess |
23% VAT + 0.5% Green cess |
Gujarat |
20.1% VAT+ 4% Cess on Town Rate & VAT |
20.2% VAT + 4 % Cess on Town Rate & VAT |
Haryana |
25% or Rs.15.62/litre whichever is higher as VAT+5% additional tax on VAT |
16.40% VAT or Rs.10.08/litre whichever is higher as VAT+5% additional tax on VAT |
Himachal Pradesh |
25% or Rs 15.50/Litre- whichever is higher |
14% or Rs 9.00/Litre- whichever is higher |
Jammu & Kashmir |
24% MST+ Rs.5/Litre employment cess, Reduction of Rs.0.50/Litre |
16% MST+ Rs.1.50/Litre employment cess |
Jharkhand |
22% on the sale price or Rs. 17.00 per litre , which ever is higher + Cess of Rs 1.00 per Ltr |
22% on the sale price or Rs. 12.50 per litre , which ever is higher + Cess of Rs 1.00 per Ltr |
Karnataka |
35% sales tax |
24% sales tax |
Kerala |
30.08% sales tax+ Rs.1/litre additional sales tax + 1% cess |
22.76% sales tax+ Rs.1/litre additional sales tax + 1% cess |
Ladakh |
24% MST+ Rs.5/Litre employment cess, Reduction of Rs.2.5/Litre |
16% MST+ Rs.1/Litre employment cess , Reduction of Rs.0.50/Litre |
Lakshadweep |
Nil |
Nil |
Madhya Pradesh |
33 % VAT + Rs.4.5/litre VAT+1%Cess |
23% VAT+ Rs.3/litre VAT+1% Cess |
Maharashtra – Mumbai, Thane , Navi Mumbai, Amravati & Aurangabad |
26% VAT+ Rs.10.12/Litre additional tax |
24% VAT+ Rs.3.00/Litre additional tax |
Maharashtra (Rest of State) |
25% VAT+ Rs.10.12/Litre additional tax |
21% VAT+ Rs.3.00/Litre additional tax |
Manipur |
32% VAT |
18% VAT |
Meghalaya |
20% or Rs15.00/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge) |
12% or Rs9.00/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge) |
Mizoram |
25% VAT |
14.5% VAT |
Nagaland |
25% VAT or Rs. 16.04/litre whichever is higher +5% surcharge + Rs.2.00/Litre as road maintenance cess |
16.50% VAT or Rs. 10.51/litre whichever is higher +5% surcharge + Rs.2.00/Litre as road maintenance cess |
Odisha |
32% VAT |
28% VAT |
Puducherry |
23% VAT |
17.75% VAT |
Punjab |
Rs.2050/KL (cess)+ Rs.0.10 per Litre (Urban Transport Fund) + 0.25 per Litre (Special Infrastructure Development Fee)+24.79% VAT+10% additional tax on VAT |
Rs.1050/KL (cess) + Rs.0.10 per Litre (Urban Transport Fund) +0.25 per Litre (Special Infrastructure Development Fee) + 15.94% VAT+10% additional tax on VAT |
Rajasthan |
36% VAT+Rs 1500/KL road development cess |
26% VAT+ Rs.1750/KL road development cess |
Sikkim |
25.25% VAT+ Rs.3000/KL cess |
14.75% VAT + Rs.2500/KL cess |
Tamil Nadu |
13% + Rs.11.52 per litre |
11% + Rs.9.62 per litre |
Telangana |
35.20% VAT |
27% VAT |
Tripura |
25% VAT+ 3% Tripura Road Development Cess |
16.50% VAT+ 3% Tripura Road Development Cess |
Uttar Pradesh |
26.80% or Rs 18.74/Litre whichever is higher |
17.48% or Rs 10.41/Litre whichever is higher |
Uttarakhand |
25% or Rs 19 Per Ltr whichever is greater |
17.48% or Rs Rs 10.41 Per Ltr whichever is greater |
West Bengal |
25% or Rs.13.12/litre whichever is higher as sales tax+ Rs.1000/KL cess – Rs 1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax) |
17% or Rs.7.70/litre whichever is higher as sales tax + Rs 1000/KL cess – Rs 1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax) |
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
The National Education Policy (NEP) 2020 was released on July 30, 2020. It will replace the National Policy on Education, 1986. Key recommendations of the NEP include: (i) redesigning the structure of school curriculum to incorporate early childhood care and education, (ii) curtailing dropouts for ensuring universal access to education, (iii) increasing gross enrolment in higher education to 50% by 2035, and (iv) improving research in higher education institutes by setting up a Research Foundation. In this blog, we examine the current status of education in the country in view of some of these recommendations made by the NEP.
Universal access to Education
The NEP states that the Right to Education Act, 2009 has been successful in achieving near universal enrolment in elementary education, however retaining children remains a challenge for the schooling system. As of 2015-16, Gross Enrolment Ratio was 56.2% at senior secondary level as compared to 99.2% at primary level. GER denotes enrolment as a percent of the population of corresponding age group. Further, it noted that the decline in GER is higher for certain socio-economically disadvantaged groups, based on: (i) gender identities (female, transgender persons), (ii) socio-cultural identities (scheduled castes, scheduled tribes), (iii) geographical identities (students from small villages and small towns), (iv) socio-economic identities (migrant communities and low income households), and (v) disabilities. In the table below, we detail the GER in school education across: (i) gender, and (ii) socio-cultural identities.
Table 1: GER in school education for different gender and social groups (2015-16)
Level |
Male |
Female |
SC |
ST |
All |
Primary (I-V) |
97.9% |
100.7% |
110.9% |
106.7% |
99.2% |
Upper Primary (VI-VIII) |
88.7% |
97.6% |
102.4% |
96.7% |
92.8% |
Secondary (IX-X) |
79.2% |
81% |
85.3% |
74.5% |
80% |
Senior Secondary (XI-XII) |
56% |
56.4% |
56.8% |
43.1% |
56.2% |
Sources: Educational Statistics at Glance 2018, MHRD; PRS.
Data for all groups indicates decline in GER as we move from primary to senior secondary for all groups. This decline is particularly high in case of Scheduled Tribes. Further, we analyse the reason for dropping out from school education. Data suggests that the most prominent reason for dropping out was: engagement in domestic activities (for girls) and engagement in economic activities (for boys).
Table 2: Major reasons for dropping out (Class 1-12) for 2015-16
Reason for dropping out |
Male |
Female |
Child not interested in studies |
23.8% |
15.6% |
Financial Constraints |
23.7% |
15.2% |
Engage in Domestic Activities |
4.8% |
29.7% |
Engage in Economic Activities |
31.0% |
4.9% |
School is far off |
0.5% |
3.4% |
Unable to cop-up with studies |
5.4% |
4.6% |
Completed desired level/ Class |
5.7% |
6.5% |
Marriage |
|
13.9% |
Other reasons |
5.1% |
6.2% |
Note: Other reasons include: (i) timings of educational Institution not suitable, (ii) language/medium of Instruction used unfamiliar, (iii) inadequate number of teachers, (iv) quality of teachers not satisfactory, (v) unfriendly atmosphere at school. For girl students, other reasons also include: (i) non-availability of female teachers, (ii) non-availability of girl’s toilet.
Sources: Educational Statistics at Glance 2018, MHRD; PRS.
The NEP recommends strengthening of existing schemes and policies which are targeted for such socio-economically disadvantaged groups (for instance, schemes for free bicycles for girls or scholarships) to tackle dropouts. Further, it recommends setting up special education zones in areas with significant proportion of such disadvantaged groups. A gender inclusion fund should also be setup to assist female and transgender students in getting access to education.
Increasing GER in Higher Education to 50% by 2035
The NEP aims to increase the GER in higher education to 50% by 2035. As of 2018-19, the GER in higher education in the country stood at 26.3%. Figure 2 shows the trend of GER in higher education over the last few years. Note that the annual growth rate of GER in higher education in the last few years has been around 2%.
Figure 1: GER in Higher Education (2014-15 to 2018-19)
Sources: All India Survey on Higher Education, MHRD; PRS.
Table 3: Comparison of GER (higher education) with other countries
Country |
GER (2017-18) |
India |
25% |
Brazil |
51% |
China |
49% |
Indonesia |
36% |
South Africa |
22% |
Pakistan |
9% |
Germany |
70% |
France |
66% |
United Kingdom |
60% |
Sources: UNESCO; PRS.
The NEP recommends that for increasing GER, capacity of existing higher education institutes will have to be improved by restructuring and expanding existing institutes. It recommends that all institutes should aim to be large multidisciplinary institutes (with enrolments in thousands), and there should be one such institution in or near every district by 2030. Further, institutions should have the option to run open distance learning and online programmes to improve access to higher education.
Foundational literacy and numeracy
The NEP states that a large proportion of the students currently enrolled in elementary school have not attained foundational literacy and numeracy (the ability to read and understand basic text, and carry out basic addition and subtraction). It recommends that every child should attain foundational literacy and numeracy by grade three.
Table 4 highlights the results of the National Achievement Survey 2017 on the learning levels of students at Grade 3 in language and mathematics. The results of the survey suggest that only 57% students in Grade 3 are able to solve basic numeracy skills related to addition and subtraction.
Table 4: NAS results on learning level of Grade-3 students
Learning level (Grade 3) |
Percentage of students |
Ability to read small texts with comprehension (Language) |
68% |
Ability to read printed scripts on classroom walls such as poems, posters (Language) |
65% |
Solving simple daily life addition and subtraction problems with 3 digits (Mathematics) |
57% |
Analyses and applies the appropriate number operation in a situation (Mathematics) |
59% |
Sources: National Achievement Survey (2017) dashboard, NCERT; PRS.
To achieve universal foundational literacy and numeracy, the Policy recommends setting up a National Mission on Foundational Literacy and Numeracy under the MHRD. All state governments must prepare implementation plans to achieve these goals by 2025. A national repository of high-quality resources on foundational literacy and numeracy will be made available on government’s e-learning platform (DIKSHA). Other measures to be taken in this regard include: (i) filling teacher vacancies at the earliest, (ii) ensuring a pupil to teacher ratio of 30:1 for effective teaching, and (iii) training teachers to impart foundational literacy and numeracy.
Effective governance of schools
The Policy states that establishing primary schools in every habitation across the country has helped increase access to education. However, it has led to the development of schools with low number of students. The small size of schools makes it operationally and economically challenging to deploy teachers and critical physical resources (such as library books, sports equipment).
With respect to this observation, the distribution of schools by enrolment size can be seen in the table below. Note that, as of September 2016, more than 55% of primary schools in the country had an enrolment below 60 students.
Table 5: Distribution of schools by enrolment size
Strength (Grade) |
Below 30 |
31-60 |
61-90 |
91-120 |
121-150 |
151-200 |
More than 200 |
Primary schools (Class 1-5) |
28.0% |
27.5% |
16.0% |
10.3% |
6.3% |
5.6% |
6.4% |
Upper primary schools (Class 6-8) |
14.8% |
27.9% |
18.7% |
15.0% |
8.4% |
7.2% |
8.0% |
Upper primary schools (Class 1-8) |
5.7% |
11.6% |
13.0% |
12.1% |
10.4% |
13.4% |
33.8% |
Sources: Flash Statistics on School Education 2016-17, UDISE; PRS.
While nearly 80% primary schools had a library, only 1.5% schools had a librarian (as of September 2016). The availability of facilities is better in higher senior secondary schools as compared to primary or upper primary schools.
Table 6: Distribution of schools with access to physical facilities
Facilities |
Primary schools (Class 1-5) |
Upper primary schools (Class 1-8) |
Higher senior secondary |
Library |
79.8% |
88.0% |
94.4% |
Librarian |
1.5% |
4.5% |
34.4% |
Playground |
54.9% |
65.5% |
84.3% |
Functional computer |
4.4% |
25.2% |
46.0% |
Internet connection |
0.9% |
4.2% |
67.9% |
Sources: Flash Statistics on School Education 2016-17, UDISE; PRS.
To overcome the challenges associated with development of small schools, the NEP recommends grouping schools together to form a school complex. The school complex will consist of one secondary school and other schools, aanganwadis in a 5-10 km radius. This will ensure: (i) adequate number of teachers for all subjects in a school complex, (ii) adequate infrastructural resources, and (iii) effective governance of schools.
Restructuring of Higher Education Institutes
The NEP notes that the higher education ecosystem in the country is severely fragmented. The present complex nomenclature of higher education institutes (HEIs) in the country such as ‘deemed to be university’, ‘affiliating university’, ‘affiliating technical university', ‘unitary university’ shall be replaced simply by 'university'.
According to the All India Survey on Higher Education 2018-19, India has 993 universities, 39,931 colleges, and 10,725 stand-alone institutions (technical institutes such as polytechnics or teacher training institutes).
Table 7: Number of Universities in India according to different categories
Type of university |
Number of universities |
Central University |
46 |
Central Open University |
1 |
Institutes of National Importance |
127 |
State Public University |
371 |
Institution Under State Legislature Act |
5 |
State Open University |
14 |
State Private University |
304 |
State Private Open University |
1 |
Deemed University- Government |
34 |
Deemed University- Government Aided |
10 |
Deemed University- Private |
80 |
Total |
993 |
Sources: All India Survey on Higher Education 2018-19; PRS.
The NEP recommends that all HEIs should be restructured into three categories: (i) research universities focusing equally on research and teaching, (ii) teaching universities focusing primarily on teaching, and (iii) degree granting colleges primarily focused on undergraduate teaching. All such institutions will gradually move towards full autonomy - academic, administrative, and financial.
Setting up a National Research Foundation to boost research
The NEP states that investment on research and innovation in India, at only 0.69% of GDP, lags behind several other countries. India’s expenditure on research and development (R&D) in the last few years can be seen in the figure below. Note that the total investment on R&D in India as a proportion of GDP has been stagnant at around 0.7% of GDP. In 2018-19, the total expenditure on R&D in India was Rs 1,23,848 crore. Of this, Rs 72,732 crore (58%) of expenditure was by government, and the remaining (42%) was by private industry.
Figure 2: R&D Expenditure in India (2011-12 to 2018-19)
Sources: S&T Indicators Table 2019-20, Ministry of Science and Technology, March 2020; PRS.
Figure 3: Comparison of R&D expenditure in India with other countries (2017)
Sources: S&T Indicators Table 2019-20, Ministry of Science and Technology, March 2020; PRS.
To boost research, the NEP recommends setting up an independent National Research Foundation (NRF) for funding and facilitating quality research in India. The Foundation will act as a liaison between researchers and relevant branches of government as well as industry. Specialised institutions which currently fund research, such as the Department of Science and Technology, and the Indian Council of Medical Research, will continue to fund independent projects. The Foundation will collaborate with such agencies to avoid duplication.
Digital education
The NEP states that alternative modes of quality education should be developed when in-person education is not possible, as observed during the recent pandemic. Several interventions must be taken to ensure inclusive digital education such as: (i) developing two-way audio and video interfaces for holding online classes, and (ii) use of other channels such as television, radio, mass media in multiple languages to ensure reach of digital content where digital infrastructure is lacking.
In this context, we analyse: (i) the availability of computer and internet across households in India, and (ii) ability to use computer or internet by persons in the age group of 5-14. As of 2017-18, the access to internet and computer was relatively poor in rural areas. Only 4.4% of rural households have access to a computer (excludes smartphones), and nearly 15% have access to internet facility. Amongst urban households, 42% have access to internet.
Table 8: Access to Computer and Internet across households (2017-18)
Access to ICT |
Rural |
Urban |
Overall |
Households having computer |
4.4% |
23.4% |
10.7% |
Households having internet facility |
14.9% |
42.0% |
23.8% |
Note: Computer includes desktop, laptop, notebook, tablet. It does not include smartphone.
Sources: Household Social Consumption on Education (2017-18), Ministry of Statistics and Programme Implementation, July 2020; PRS.
Table 9: Ability to use Computer and Internet across persons in the age group 5-14 (2017-18)
Ability to use ICT |
Rural |
Urban |
Overall |
Ability to use computer |
5.1% |
21.3% |
9.1% |
Ability to use internet |
5.1% |
19.7% |
8.8% |
Note: Ability to use computer means to be able to carry out any of the tasks such as: (i) copying or moving a file/folder, (ii) sending emails, (iii) transferring files between a computer and other devices, among others. Ability to use internet means to be able to use the internet browser for website navigation, using e-mail or social networking applications.
Sources: Household Social Consumption on Education (2017-18), Ministry of Statistics and Programme Implementation, July 2020; PRS.
Public spending on education to be increased to 6% of GDP
The recommendation of increasing public spending on Education to 6% of GDP was first made by the National Policy on Education 1968 and reiterated by the 1986 Policy. NEP 2020 reaffirms the recommendation of increasing public spending on education to 6% of GDP. In 2017-18, the public spending on education (includes spending by centre and states) was budgeted at 4.43% of GDP.
Table 10: Public spending on Education (2013-2018)
Year |
Public expenditure (Rs crore) |
% of GDP |
2013-14 |
4,30,879 |
3.84% |
2014-15 |
5,06,849 |
4.07% |
2015-16 |
5,77,793 |
4.20% |
2016-17 |
6,64,265 |
4.32% |
2017-18 |
7,56,945 |
4.43% |
Sources: 312th Report, Standing Committee on Human Resource Development, March 2020; PRS.
Figure 4: Comparison of public spending on Education in India with other countries as % of GDP (2015)
Sources: Educational Statistics at Glance 2018, MHRD; PRS.
In the figure below, we look at the disparities within states in education spending. In 2020-21, states in India have allocated 15.7% of their budgeted expenditure towards education. States such as Delhi, Rajasthan, and Maharashtra have allocated more than 18% of their expenditure on Education for the year 2020-21. On the other hand, Telangana (7.4%), Andhra Pradesh (12.1%) and Punjab (12.3%) lack in spending on education, as compared to the average of states.
Figure 5: Budgeted allocation on Education (2020-21) by states in India
Note: AP is Andhra Pradesh, UP is Uttar Pradesh, HP is Himachal Pradesh and WB is West Bengal.
Sources: Analysis of various state budget documents; PRS.
For a detailed summary of the National Education Policy, see here.