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Blog / 15 May 2025

Dispute Between Kerala and Centre Over PM SHRI Scheme and Education Funds

Context:

The Kerala government is set to approach the Supreme Court after the Centre withheld ₹1,500 crore allocated for the state's education sector. The dispute centers around Kerala's refusal to implement the Central Government’s PM SHRI (Prime Minister Schools for Rising India) scheme, which is linked to the National Education Policy (NEP) 2020.

What is the PM SHRI Scheme?

Launched by the Union Ministry of Education, the PM SHRI scheme aims to upgrade over 14,500 existing schools across India into model institutions, focusing on improved infrastructure, teaching practices, and learning outcomes in alignment with NEP 2020. Key features of the scheme include:

  • Total cost: ₹27,360 crore (2022–2027)
  • Centre’s share: ₹18,128 crore
  • States’ share: 40% of the total cost
  • Progress: As of now, 12,400 schools across 670 districts have joined the scheme.

To participate, states are required to sign a Memorandum of Understanding (MoU) with the Centre. However, Kerala, Tamil Nadu, and West Bengal have not agreed to the terms.

PM SHRI DASHBOARD

Kerala’s Reasons for Refusal:

Kerala has expressed concerns about the National Education Policy (NEP) 2020, which underpins the PM SHRI scheme. The state government argues that the policy:

  • Increases central control over education, a subject under the Concurrent List shared between the Centre and states.
  • May impose ideological influences on school education.
  • Undermines Kerala’s authority to design and manage its own education system.

Additionally, Kerala believes it does not require the PM SHRI scheme because:

  • It has already made significant improvements to its school education system.
  • The state boasts 40,000 smart classrooms with internet access.
  • Government and aided schools already meet high standards of infrastructure and learning.

Legal Challenge and Constitutional Implications:

Kerala's move to challenge the Centre’s actions in the Supreme Court could set a significant precedent regarding the limits of central authority in the education sector. The petition is expected to address:

  • The constitutional autonomy of states in education, a matter under the Concurrent List.
  • The legality of linking unrelated centrally sponsored schemes to policy compliance.
  • The right to equitable fund allocation without coercion.

Centre’s Stance:

The central government has defended its position, arguing that the PM SHRI scheme promotes standardisation and quality enhancement across states. As of now, 33 states and UTs have agreed to implement the scheme. However, opposition states argue that the MoU’s terms could compromise their fiscal autonomy and operational flexibility, highlighting concerns over central overreach in areas traditionally managed by state education departments.

Conclusion:

The dispute between Kerala and the Centre over the PM SHRI scheme is more than just a financial disagreement—it underscores the ongoing tension between state autonomy and central oversight in India’s education system. The Supreme Court’s ruling could have far-reaching implications for the future of centrally sponsored schemes, influencing how such policies are negotiated and implemented in India’s federal framework.