Sanjana Chawla, TwoCircles.net
New Delhi: A growing crisis in India’s education system is endangering the dreams of thousands of students from Scheduled Castes (SC), Scheduled Tribes (ST) and economically disadvantaged backgrounds. Recent reports have confirmed a sharp decline in the disbursement of the National Overseas Scholarship (NOS) scheme. For the 2025-26 academic year, less than 40% of selected students, only 40 out of 106, have received their scholarship. This marks a steep fall in the reach of a scheme that once supported every selected candidate.
The Ministry of Social Justice and Empowerment has cited lack of funds as the reason behind this. As a result, 66 students who had worked hard to secure these scholarships now find themselves stuck in uncertainty. In previous years, all selected candidates typically received their provisional letters without delay.
The National Overseas Scholarship was launched in the 1950s to support students from marginalised communities. These include Scheduled Castes, Denotified Nomadic and Semi-Nomadic Tribes, Landless Agricultural Labourers and Traditional Artisans.
The scholarship is designed to help students pursue Master’s or Ph.D. degrees abroad, but only in universities ranked among the top 500 globally as per QS rankings. It covers tuition fees, visa expenses, medical insurance, air travel and a maintenance allowance for up to three years for Master’s and four years for Ph.D. students. The total number of scholarships is 125 per year, with no more than 10% allotted to students from any single state.
The ministry officials have reportedly linked the delay to a lack of clearance from the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi. According to sources, funds are technically available but cannot be disbursed until approval is granted from higher authorities. This bureaucratic roadblock has left many students, some of whom have secured admissions to top foreign universities, at risk of losing their opportunities.
This situation is not new. Over the past few years, there have been repeated interruptions in key scholarship schemes, including the Maulana Azad National Fellowship (MANF) and the National Fellowship for Scheduled Castes (NFSC). These disruptions are beginning to expose deep-rooted systemic issues and are making educational equity harder to achieve.
A Disturbing Pattern of Disruption
The NOS crisis is part of a much wider trend. Disruptions in major scholarship programmes have become alarmingly frequent. Aimed at students from six notified minority communities, Muslim, Christian, Sikh, Buddhist, Jain and Parsi, the MANF has seen major delays and funding cuts.
Initially, the MANF supported 1,000 M.Phil. and Ph.D. students annually. But the government discontinued it in 2022, stating financial constraints and overlap with other schemes. Although beneficiaries were promised continued support, the release of funds has become inconsistent.
Available data paints a worrying picture. MANF scholars have faced delays in fellowship disbursements, with funds coming up to eight months late in 2022 and six months late in 2023.
The NFSC also faced similar problems. In March 2025, the National Testing Agency (NTA) released a list of 865 selected candidates for the June 2024 cycle. But a revised list brought this number down to 805, eliminating over 60 students who had already been selected.
These delays have caused significant financial, mental and emotional stress for scholars. Unable to meet basic expenses or continue their research, some students have even considered dropping out of their Ph.D. programmes.
Systemic Flaws Crush Dreams
Faraan Safwi, member of the District Development Committee and National Vice President of the Samajwadi Youth Brigade, spoke about how these programmes are allegedly gradually being altered. “Schemes such as the pre-matric scholarship for Scheduled Castes have transitioned from complete central funding to a shared responsibility between central and state governments, potentially creating funding gaps,” he said.
These delays and reductions go far beyond paperwork. For students from marginalised communities, these scholarships are often the only route to quality education and a better life. When that route closes, the impact is devastating.
A Comptroller and Auditor General of India (CAG) report covering the years 2017-21 showed that 10-12% of SC students and 4-20% of ST students did not receive their pre-matric scholarships during that time. A 2023 audit further revealed delays of up to five years in payment, as well as payments made to ghost or ineligible beneficiaries. It also showed a sharp drop in the pre-matric scholarships for SC students from Rs 843 crore in 2015–16 to Rs 355 crore in 2019-20, a decline of 58%. During the same time, dropout rates among SC and OBC students in Grades IX and X increased.
Safwi added that this erosion of support harms the entire country apart from hurting individuals. “This not only perpetuates poverty and inequality, but also hinders social mobility – leading to social instability and unrest. This also leads to increased discrimination and prejudice – a significant loss of human talent and ultimately, a weakened democracy and social cohesion as the parity grows manifold,” he said.
Jahnavi, an industrial-organisational psychologist based in Delhi, explained the emotional toll this takes on students. “At first, when someone gets a scholarship, it brings pride and a sense of achievement. But when it does not come through due to whatever reason, it can cause immense emotional distress, disappointment and self-doubt. This also impacts mental health, leading to feelings of anxiety and sadness,” she said.
She added that over time, such setbacks can reduce trust in institutions and make students more cautious and uncertain about future opportunities.
BJP’s Budgetary & Ideological Blow
On July 12, the Students’ Federation of India (SFI) issued a statement – criticising the underfunding of the National Overseas Scholarship. The organisation called it a discriminatory move and blamed the Cabinet Committee on Economic Affairs for the cut.
“The BJP-led central government is notorious for its measures to privatise and communalise the education sector of India. Over the past few years, there has been a selective cut down in the scholarships and fellowships, targeting the students from Dalit, Adivasi and minority communities,” said the SFI.
The Communist Party of India (Maxist)-affiliated student wing added that this pattern aligns with what they describe as a “Manuwadi agenda” aimed at keeping marginalised communities away from educational progress. Safwi echoed this concern. “This (stoppage of funds) serves as a stark example of the deep involvement of right-wing organisations like the RSS and BJP in the principles of Manusmriti, with their primary objective being the re-establishment of the Varna system,” it said.
Past data also points to a political pattern. In February 2025, Congress President Mallikarjun Kharge accused the BJP government of deliberately reducing scholarships for SC, ST, OBC and minority students. He cited official figures that showed an average annual cut of 25% in allocated funds. The number of Dalit students receiving pre-matric scholarships had dropped by 57% in the last nine years, and those for OBC students had declined by 77% in just the past five years.
Defiance Rises as Voices Unite
As education becomes increasingly privatised and government funding shrinks, the doors of opportunity are slowly closing for many. This shift does not only reinforce privilege, it deepens the divide – locking out communities that have long struggled for a fair chance.
The worst impact is felt by those with the least ability to absorb it. Reduced scholarships limit access to higher education, increase dropout rates and shrink employment prospects for thousands of capable students.
Opposition parties have raised their voices on this issue. The Congress and the Samajwadi Party have repeatedly spoken about the financial crisis students face. Leader of Opposition in Lok Sabha Rahul Gandhi wrote a letter to Prime Minister Modi in June 2025 wherein, he said, “The number of Dalit students receiving scholarships fell by nearly half – from 1.36 lakh in FY23 to a mere 69,000 in FY24.”
This deepening scholarship crisis strikes at the foundation of equal opportunity and justice. The hopes of thousands of young students are on hold. Their futures hang in uncertainty. The promises written into India’s Constitution are being tested.
If the government is serious about inclusive education and social progress, it must act now. This demands accountability, transparency and above all, the will to ensure that a student’s dream is not dismissed simply because they were born without wealth. The very idea of an equitable and educated India depends on this.