Credit Potential for Education

1. Introduction:
Education plays a significant and remedial role in balancing the socio-economic fabric and
progress of the country. Since the citizens are the most valuable resource, therefore, our billion-
strong nation needs nourishment and care in the form of basic education to achieve a better
quality of life. Investment in education is investment in human capital as it is central to the
Human Resources Development and empowerment in any country.
Education is having both intrinsic and instrumental value and provides useful services for the
development of nation and enrichment of an individual's life. Therefore, the right to education is
recognized as one of the fundamental human rights and, the drive towards universal elementary
education aims at ensuring its delivery.
Karnataka’s growing economy is also based on the knowledge base of the society. The State has
embarked on significant reforms in the education sector with increased public investment to
ensure access, equity and quality in education. The state has institutions of national importance
viz., Indian Institute of Astrophysics, IISc, IIM Bangalore, NIT, Surathkal and NIMHANS.
The literacy rate in the State during 2001 was 66.64 per cent, which increased to 75.60 per cent
in 2011. Karnataka's overall literacy rate, male and female literacy rates are above the national
average.
While Dakshin Kannada district holds the highest literacy rate in the State, the districts like
Kalburgi (undivided), Bengaluru Rural, Bagalkot, Raichur, Kolar, Chamarajanagar, Vijayapura
and Bidar with a lower literacy rate in 2001 have crossed the State average literacy rate in 2011.
This is attributed to literacy programmes implemented by the Department of Education with a
focus on backward districts/regions of the State. The SSA and RMSA initiatives resulted in good
schooling facilities, attractive incentive schemes to improve learning, quality assurance
measures and increased awareness among the community.
2. Karnataka State Education Policy – Some of the important recommendations are as
follows:
i. Education must remain the primary and uppermost responsibility of the State
government, for preparing the future generation.
ii. Vocational education: Exposure to different vocations during upper primary and
secondary school can be valuable experience for children.
iii. Foreign educational institutions of repute can be allowed to set up campuses in
Karnataka but only after a level playing field for Indian institutions has been created so
that they can compete fairly with the foreign entrants.
iv. Universities should be encouraged to accredit themselves on a regular basis by globally
rated agencies.
v. Existing colleges and universities must take the lead in rolling out skill development
Courses and spelling out pathways into general and technical education in accordance
with the National Skills Qualification Framework (NSQF), since they are best placed to
do so.
vi. Strengthening post-graduate, PhD and post-doctoral programmes in colleges and
universities is the need of the hour.
vii. Educational institutions should be encouraged to incubate companies through their
faculty and students through raising funds and supporting their early stage work
viii. The State needs to work with the Centre to create a framework by which educational
institutions can raise funding from Multilateral International funding agencies (World
Bank, ADB etc.), Private Industry and from society.
ix. The process of fixing fees in autonomous public and private colleges should be a
continuously monitored activity, based on real data on expenses reported by the
institutions. Fees must be allowed to reflect real costs and subsidies should be targeted
towards students who need them.
x. Government should move towards financing students in higher education, and allow
them to choose the colleges and universities of their choice.

3. National Education Policy (NEP), 2020: The State released the state's plan for
implementing the National Education Policy (NEP). Key tasks include:

i. Establishment of an Implementation Mission with specific targets that are mapped

on a quarterly calendar for the next 3 years and a public review of implementation
in every quarter; constitution of an Implementation Task Force (ITF)
ii. Immediate provision made for ‘implementation fund’ in SSK (Samagra Shikshana)
and Karnataka State Higher Education Council (KSHEC).
iii. Establishment of regulatory bodies – the State School Standards Authority (SSSA)
and the Karnataka Higher Education Regulatory Council (KHERC).
iv. The new KSU Act for establishing the proposed Higher Education structure.
v. Separation of powers within the existing bodies in the education department.
vi. Amendments to service rules – tenure-ships in KPS/School Complexes;
delineation of teacher career progression and ensuring vertical career progression.
vii. Establishment of Special Education Zones (SEZs) across identified sections within
the state.
viii. Establishment of gender and disability funds along with other inclusive education
measures for students from socio-economically disadvantaged groups (SEDGs)

4. Digital learning in Karnataka's government colleges

Karnataka Government has implemented learning management system (LMS)-based digital

learning in Government higher educational institutions. It is a platform to revolutionise
teaching and learning, is said to be a novel and a first of its kind initiative of the State
Government, a boon to the students of Government Higher Education Institutions, especially
those from socially and economically disadvantaged sections of society. 'Karnataka LMS' is to be
implemented in 430 government first grade colleges, 87 government polytechnics and 14
government engineering colleges. This would have a progressive impact on the teaching of about
24,000 teachers and learning of about 4.5 lakh students. To promote digital learning in higher
education 5500 smart classrooms to be set up in Govt. colleges based on the LMS system of
learning. These smart classrooms will help students cope with the academic loss due to the
Covid-19 pandemic.

5. Status of Higher & vocational Educational Institutions Network in Karnataka

Status of Pre-University Education:
In order to administer the +2 stage of education, the 'Karnataka Pre University Education
Board' was established in 1971. The Board was abolished in 1988 and it was converted into the
'Directorate of Pre-university Education' in 1992. All colleges imparting PU education in the
State come under the purview of the Directorate. The Directorate looks after the administration,
examination and academic matters of the PU stage. Pre University Education is considered as a
preparatory stage for university courses. Pre-University education is an important milestone
between school education and higher education.
Status of College Education
The Department of Collegiate Education was set up in the year 1960, and has since been striving
to make quality higher education affordable and accessible to all sections of students. The
Department of Collegiate Education oversees the administration of 412 Government First Grade
Colleges and 319 Private aided colleges affiliated to 14 state universities, through its 6 regional
offices located at Bengaluru, Mysuru, Mangaluru, Shivamogga, Dharwad and Kalburgi.
The Rajiv Gandhi loan scholarship scheme is introduced by the Government of Karnataka to
ensure that poverty and financial constraints will not deny higher education to the meritorious
poor students. The objective of the scheme is to increase State’s gross enrolment into higher
education by mainstreaming underprivileged Rural and Urban students. The scheme
will provide interest subsidy for education loans upto the moratorium period on the loans taken
by students belonging to economically weaker section from scheduled banks for pursuing any of
the approved courses of study in Government Colleges and/or aided courses in Private Aided
Degree Colleges.

Status of Technical Education

Technical Education across the globe is gaining importance day by day because of the rapid
advancements in science, technology and innovations. The Department of Technical Education
came into existence as a full-fledged independent department from 1959. Department of
Technical Education is playing a vital role in contributing for the growth of Information
Technology and Industries in Karnataka State by making its products capable of competing
across the globe. There were 57 technical institutes, under Department of Technical Education
initially but now there are a staggering 535 institutes across the state ranging from Degree to
Diploma and Junior Technical Schools.
Status of Medical Education
There are 63 Medical Colleges (MBBS degree) in the State which have a summated intake
capacity of 6786 students. Of them, 20 colleges are run by the Government along with 8 other
Super Specialty Institutions. The Government's presence is visible in nominal strength in other
system. There are 72 Ayurvedic Colleges. There are 294 Nursing Colleges recognized by Indian
Nursing Council.
6.Credit facilities for Education
National and State level policies are framed to ensure that this basic need of the population is
met through appropriate public and private sector initiatives. As per the RBI guidelines, loans to
individuals for educational purposes including vocational courses up to Rs.10 lakh irrespective
of the sanctioned amount will be considered as eligible for priority sector and Rs. 20 lakh for
studies abroad, and do not include those granted to institutions.
GoI has developed a portal known as Vidya Lakshmi (www.vidyalakshmi.co.in) which is a first of
its kind portal for students seeking Education Loan developed by GoI. Students can view, apply
and track the education loan applications to banks anytime, anywhere by accessing the portal.
The portal also provides linkages to National Scholarship Portal for the benefit of deserving
students.
Indian bankers Association (IBA) has formulated a scheme for providing collateral free loans
upto `7.5 lakh under the sector for students belonging to economically weaker sections.

To provide financial support to meritorious students who secure admission in institutes for
pursuing higher education, including vocational courses in India or abroad, education loan is
available from financial institutions.
7. Recent Policy initiatives and Support

 Education: Karnataka has allocated 12.7% of its total expenditure for education in 2021-22.
Rs.2,047 crore has been allocated to Akshardosha scheme for universalisation of primary
education. Rs.247 crore has been allocated towards Samagra Shikshan Abhiyan.

 To promote education for the girl child, the Karnataka government has decided to make
education free for all girls across the state. According to the scheme, the government would
reimburse all fees, except examination fees of girl students of Class 1 to graduation level. The
students will have to pay the fees first at the time of admission and get it reimbursed from
the government later. An important highlight of the scheme is that the entire tuition fee will
be waived even if students opt for esteemed women’s colleges.
 Under “Hobligondu Vasathi Shale” scheme, 270 new residential schools have been started
for education development of SC/ ST children.

 Prabuddha scheme for students from the Schedule Cast/Schedule Tribe (SC/ST)
communities was launched by the Karnataka government in December 2018 to enable them
to get access to the world’s best universities through the scheme at little or no cost. The
scheme will cover the student’s course fees, living expenditure and airfare to the country in
which the student is pursuing their studies. Moreover, there will be a 33 per cent reservation
for scholarships catering to women candidates and a four per cent reservation for differently
abled students every year.

 The Government of India has launched a scheme to provide full interest subsidy during the
period of moratorium i.e., course period plus one year or six months after getting job,
whichever is earlier, on loans taken by students belonging to Economically Weaker Sections
from scheduled banks under the Educational Loan scheme of the Indian Banks’ Association,
for pursuing any of the approved courses of studies in technical and professional streams
from recognized institutions in India.
 The Cabinet Committee on Economic Affairs (CCEA) has approved continuation of the
Credit Guarantee Fund Scheme for Education Loans and continuation and modification of
the Central Sector Interest Subsidy (CSIS) Scheme with a financial outlay of Rs.6600 crore
for the period from 2017-18 to 2019-20. Students with annual gross parental income upto
Rs.4.5 lakh are eligible for the scheme and the loans are disbursed without any collateral
security and third-party guarantee.
 The government is providing free laptops to the students with an income criteria of ` 2.5 lakh
per annum. The government is also having a scheme for providing free bicycles to facilitate
transport for rural and hilly region girl students, who were enrolled to class 8 th in
government and government aided scheme and they belong to BPL family.
8. Ground Level Credit Flow
Keeping in view the credit potential for education in the State, the credit projection for this
sector is indicated by NABARD in SFP. The same is also made by SLBC based on the
projections made in ACPs prepared for all the districts.
The target and achievement under the sector for last 3 years are as under: (Amt.in crore)
2017-18 2018-19 2019-20 2021-22
Target Ach Target Ach Target Ach Target
2915 1639 4604 1179 4971 1291 5970

(CBs Rs.5261 cr. RRBs Rs.608 cr. Coops/others Rs.101 cr.)

9. Action Points
• There is a need to spread awareness on the Central Sector Interest Subsidy scheme for
studies in India by students from the economically weaker sections with parental income of
up to Rs. 4.50 lakh during the moratorium period through the colleges.
• Proper coordination between college management and bankers in the district will help in
guiding /assisting students to enroll for professional courses. This will help students avail
hassle free timely education loan.
• Conducting campus recruitment drives/ensuring maximum placement of students
graduating from specialised/vocational institutions, etc will encourage many students for
availing education.
• Banks may conduct awareness camps in schools and colleges to make students aware of the
facilities available in terms of education loans, subsidies, scholarships etc.
• Institutes/colleges offering professional/specialised courses may assess the employability of
students post completion of the course.
• Banks may assess the employability and expected remuneration attached to the course and
also the institution’s standing in a realistic manner to ensure that repayment of loan is
ensured.
 There is a mismatch between the higher cost of education and the potential income levels of
students after completion of education in some professional courses, which needs to be
addressed.
 Banks are not eager to finance loan up to Rs.4 lakh as it requires no collateral or margin.
This approach affects the Low Income Group customers the most.