Role of RBI in Promoting Inclusive Education in India: A Macroeconomic Policy Perspective

Abstract

The Reserve Bank of India (RBI), as the apex monetary authority and financial sector regulator, has progressively assumed a role that extends beyond macroeconomic stabilisation towards catalysing socio-economic equity. This study examines how RBI can promote inclusive education, including students with disabilities, in India. Employing a qualitative document analysis of publicly available RBI circulars, master directions, and statutory instruments, alongside a thematic review of disability-studies and financial-inclusion literature, this study maps the regulatory instruments deployed by RBI, including Priority Sector Lending (PSL) guidelines, against the imperatives of disability-inclusive tertiary education as mandated by the RPwD Act, 2016, and the NEP 2020. The study indicates that while credit to the education sector has expanded in absolute terms over time, its relative share in both total credit supply and priority sector lending has declined significantly. Therefore, to promote inclusive education in India, the study recommends that the RBI should enhance the availability and affordability of educational credit by reducing interest rates on education loans. Additionally, the PSL targets for educational loans should be enhanced, encouraging banks to allocate a larger share of their credit portfolio toward higher education, vocational training, skill development, and digital learning programs. For students with disability, RBI should introduce dedicated sub-targets within the priority sector lending framework for special and inclusive education. Additionally, RBI can mandate commercial banks to allocate a specific proportion of their educational loan portfolio to students with disabilities and set minimum credit allocation limits for special education institutions.