India, Feb. 3 -- Flagging a decade-long stagnation in public spending on education, the 16th Finance Commission (FC-16) has warned that education expenditure has remained on a "relatively stable trajectory", stuck at around 2.5% of gross domestic product (GDP) over the last decade from 2011-12 to 2023-24, as rising subsidies and committed expenditures have reduced states' "discretionary spending space" for investment in human capital.

The commission has called on states to review their spending priorities to protect growth-enhancing sectors such as education from fiscal compression amid rising subsidies and committed expenditures on pensions and salaries.

The report of the 16th Finance Commission was tabled by Union finance minister Nir...