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Why investing in early childhood education should be a priority in the upcoming Budget

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Just 0.1% of the GDP was spent in 2020-21 for early childhood education, thinktank analysis suggests 1.5%-2.5% of GDP expenditure

The presentation for the Union Budget 2023-24 is right around the corner. The state budgets will be announced soon after. One critical expectation would be a substantial commitment to the early childhood education (ECE) of children aged 3-6.

Earlier this month, Union Finance Minister Nirmala Sitharaman indicated the new Budget would “set the template” for the next 25 years. Since education is a key development sector, there are huge expectations about the Budget proposals for this sector.

With growing scientific evidence, it is now a well-known fact that early learning environments help children not only improve their overall development but also create a strong base for school preparedness.


Read more: How much loss have we seen in child education during the pandemic?


ECE is both a right and a profitable investment in human resources and social capital of communities, according to United Nations Children’s Fund 2007 report Education for All Global Monitoring Report.

While the critical importance of ECE is undisputed — this has been recognised by parents as well as policymakers — its provision in India remains uneven in terms of coverage and quality.

India is home to 99 million children aged 3-6 years. However, only around two-thirds of them receive ECE, either through government or non-profits and private entities.

As of March 2022, 28 million children in the 3-6 age group were being provided preschool education in Anganwadi Centres and 1.5 million children in government and government-aided schools, respectively, largely through the Samagra Shiksha Abhiyan (SmSA).

Despite a range of ECE service providers, around 37 million children do not avail of any such service, found the National Sample Survey 75th round report.

Due to varying service providers, funding streams and quality standards, there is also a variation in household spending towards ECE, as average out-of-pocket spending per child per year varies from Rs 1,030 in government institutions to Rs 12,834 in private institutions.

Therefore, good-quality early education is not equally accessible to all. This situation needs to be addressed on priority and scaling up public provisioning of ECE services can help minimise this unevenness.

The discourse on ECE in India received a fillip with the release of the new National Education Policy (NEP) in 2020. The NEP probably is the first education policy that recommended the inclusion of children aged 3-6 within the structure of the school system.

The policy also suggests strengthening Anganwadi Centres with access to high-quality infrastructure and well-trained teachers/workers.

In line with United Nations-mandated Sustainable Development Goal 4.2, the policy has recommended universal provisioning of ECE by 2030. This important policy initiative by the central government needs to be backed by adequate resource support, both from the Union Budget and in state budgets.

A recent study by thinktank Centre for Budget and Governance Accountability (CBGA) and non-profit Save the Children attempted to estimate the cost of universal public provisioning of quality ECE in India through three different models.


Read more: New education policy to shrink India’s school system: GN Devy


It looked at stand-alone preschool-cum-day-care centres, stand-alone Anganwadi centres and pre-primary sections in primary schools. The models are aligned with the suggestions made in NEP 2020.

An approximate total resource requirement estimated by CBGA is in the range of 1.5—2.5 per cent of the country’s GDP (around Rs 3,23,318 crore—Rs 5,59,854 crore based on the GDP figure for 2021-22), depending on the model chosen for universalisation of public sector provisioning of ECE.

In practice, provisioning of ECE to all 3-6 year children will involve the private sector and NGOs to a varying extent across states. However, the resource estimation exercise refers to the public sector provisioning of ECE for all in order to create a benchmark.

India’s current spending on ECE is way below the requirement. In 2020-21, the total budgetary provision for ECE in India by the Centre and states stood at around Rs 25,000 crore or about 0.1 per cent of the GDP.

In contrast, the average spending by countries part of the international agency Organization for Economic Cooperation and Development was about 0.7 per cent of their GDP.

In 2021-22, the NIPUN Bharat programme was launched for children aged 3-9 years to ensure that every child in the country necessarily attains foundational literacy and numeracy by Grade III. An approval of Rs 2,688 crore was made under SmSA.

There was an allocation of Rs 37,383 crore for SmSA in Union Budget 2022-23, the share for ECE was not known in public domain. Moreover, only Rs 18,987 crore (51 per cent) was released under the scheme until December 2022.

In the 2022-23 Budget speech, there was also a mention of upgrading two lakh Anganwadi centres under the Saksham Anganwadi and Poshan 2.0 schemes. However, the budgetary allocation increased marginally, by 0.79 per cent, from the 2021-22 Budget estimates.

This could be a concern for the ECE programme. An extension of the mid-day meal scheme to preschool students under the PM POSHAN scheme, as recommended in the NEP, was another policy intervention made in 2022-23.

But there was no additional budget for that; rather the outlay has been reduced from the previous year. Likewise, there has been no progress so far on the NEP’s other recommendation to start offering breakfast to preschool students.

An immediate target for the Centre and states under the NIPUN Bharat Mission is to ensure that every child in the country attains foundational literacy and numeracy at the end of Grade 3 by 2026-27. This needs a strong foundation for ECE to be built up.

‘Ensuring foundational literacy and numeracy’ is also one of the priority areas highlighted by the government in the upcoming 2023 G20 Summit, for which India holds the presidency.


Read more: National Education Policy: Why education must be anchored in quality and equity


Clearly, good quality ECE is pivotal for reducing educational inequality. It is also critical to ensure that India develops high-quality human resources and becomes a global economic powerhouse.

Therefore, the finance minister needs to earmark substantial financial resources in Budget 2023-24 to make that dream a reality. The state budgets should also step up their support (matching shares) for ECE significantly, starting with financial year 2023-24.

Protiva Kundu is the thematic Lead – Social Sectors at Centre for Budget and Governance Accountability

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth

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