Public Expenditure for Inclusive Education in India: A Critical Economic Evaluation

 

Dr. Poonam Singh

 

ABSTRACT:

The socio economic landscape of the country is rapidly changing. The Ministry of Human Resource Development is conscious about changing scenario and has been taking the steps to mitigate the adverse impact of growing 'exclusive-ism ' within the society, which would not be in the best interest of the future generation. This study has explored government financing of education in India and across the states of the country. Economic reform has certainly affected public expenditure on social sector in general and that on education sector in particular. The study concluded that state real per capita income, is found to significantly enhance educational expenditure at the aggregate level. Moreover, contrary to general perceptions, education expenditure at all levels has been significantly lower after liberalization in comparison with the pre-economic reform era.

 

 

 

I. INTRODUCTION:

The concept of economic development in modern era is more comprehensive. It includes basic necessities of life, education health, employment and equity in the distribution of income and wealth with economic growth. The focus of the economists of developing economies has been increasingly shifting towards embarking on a twin policy of achieving economic growth with human development. It is felt that economic growth alone is not enough to generate sustainable development because the impact not often percolates down to the weakest section of the society. India has made impressive economic development in the last few decades on the basis of GDP growth but the position of India in world human development index is quite disappointing. About 70 percent of the population is living below poverty line which creates unique challenges for the integrated education movement in India.

 

Education is essential for all and is a fundamental right to the all round development of a child. So the sustainable and more inclusive growth is the main objective of twelfth plan in the country. Inclusive education is a part of inclusive growth. The new development paradigm of inclusive growth cannot be met by incremental increases in individual programme alone. If empowerment through education is to be the way forward then considerable financial resources need to be expended on the educational sector (at least 6% that has been a long standing recommendation).

Hence, policy-makers in India, since independence, have placed an overriding importance on the provision of basic social services like education, health and nutrition to all sections of society and induced substantial increase in social expenditure.

 

The socio economic landscape of the country is rapidly changing. The Ministry of Human Resource Development is conscious about changing scenario and has been taking the steps to mitigate the adverse impact of growing 'exclusive-ism ' within the society, which would not be in the best interest of the future generation. In the past few years, focus on children with disabilities has resulted in greater awareness and increased sensitivity towards these children. The genesis of this movement of Inclusive Education has to take place at the policy level, simply because the Indian Constitution empowers every individual with the 'Right to Education’, irrespective of the caste, religion, economic, physical, and mental stratification. Equitable access to education requires inclusive education to ensure that all students have access to the same standard of education.

 

With this background, the paper discusses trends of public expenditure and government policies on education in India. The paper is organized into four main sections. Section two briefly describes the education policies of the government in the pre and post economic reform period. Patterns of education expenditure by central and state governments are elucidated in the Section three, which shows that there is considerable heterogeneity in expenditure pattern across states. Section four concludes.

I.       Economic Reforms and Change in Educational Policies

The government of India launched a series of economic reform measures in July 1991. These policies had serious implications for social sector, as it led to drastic reduction in public subsidies and development expenditure, particularly on social services. The central government as well as state government expenditure on social sector as a percentage of GDP declined in 1990s.

 

As envisaged in the National Policy on Education-1986 (revised in 1992), development of education is pursued as a ‘meaningful partnership between the Centre and the States’. State Governments also plan and implement programmes of education development keeping in view their specific situations and needs. The goal of Education for All has been high on the agenda of the Government of India since the commencement of development planning since 1951. However substantial progress towards the Education for All goals has been made during the past few years. Before 1976, education was the exclusive responsibility of the States While the role and responsibility of the States in education remained largely unchanged, the Union Government accepted a larger responsibility of strengthening the national and integrated character of education. In order to achieve Universalisation of Elementary Education, the Government of India has initiated a number of programmes and projects. It can be noticed that after economic reform, there is prominent change in the policy frame work of the Indian government, specially since 2001 when Sarva Siksha Abhiayan has been initiated:-

 

Before reform

Year	Policy Framework towards Educational Development
1950	India’s constitution is signed; includes part IX, article 45, which guarantees free and compulsory education for all children (regardless of ability level) between the ages of 6-14
1951-68	Constitution Expansion of the formal schooling system. Indian governments shoulder the responsibility for primary education
1968-86	National Policy on Education1976, GOI and state governments equal responsibility for promoting and managing education.
1986	National Policy on Education 1986 (NPE 1986) adopted.
1987	Several large centrally-assisted schemes/programmes such as ‘Operation Blackboard’ and the ‘scheme for restructuring and reorganization of teacher education’ launched
1988	National literacy Mission (NLM) launched

 

After reform

Year	Policy Framework towards Educational Development
1992	National Policy on Education 1986 revised
1994	District Primary Education Programme (DPEP) launched to universalize primary education.
1995	Centrally-assisted National Programme of Nutritional Support to Primary Education, Mid-Day Meal Scheme (MDMS) launched.
1999	A separate Department of School Education and Literacy created within the Ministry of Human Resource Development, Government of India.
2001	(i) Sarva Shiksha Abhiyan, the flagship programme for universalisation of elementary education, launched;(ii) Adoption of the National Policy on Empowerment of Women.
2002	The Constitution (Eighty-sixth Amendment) Act, 2002 inserted Article 21-A in the Constitution of India to provide free and compulsory education for all children in the age group of six to fourteen years as a Fundamental Right;
2003	National Youth Policy, 2003 formulated.
2004	(i) Education Cess introduced for raising financial resources to universalize elementary education; (ii) EDUSAT, a satellite exclusively dedicated to education launched
2005	National Curriculum Framework (NCF-2005) for school education formulated
2009	(i) The Right of Children to Free and Compulsory Education Act, 2009 enacted. The Act makes it incumbent on Governments to provide for free and compulsory education to all children of the age of six to fourteen years. (ii) The National Literacy Mission (NLM) recast with a special focus on female literacy and the “Sakshar Bharat” (Literate India) programme launched as the national adult education programme on 8 September 2009; (iii) The revised National Curriculum Framework for teacher Education formulated; (iv) The Rashtriya Madhyamik Shiksha Abhiyan (RMSA) launched in March 2009, with the vision of making secondary education of good quality available, accessible and affordable to all young persons in the age group 15-16 years; (v) Revised Centrally-sponsored Scheme of Inclusive Education for the Disabled at Secondary Stage approved;
2010	(i) The Right of Children to Free and Compulsory Education (RTE) Act 2009 came into force from 1 April 2010; (ii) The Sarva Shiksha Abhiyan (SSA) Framework aligned to RTE Act; (iv) Revised Centrally- Sponsored Scheme of ICT@ Schools approved
	2011 The revised Centrally-Sponsored Scheme “Vocationalisation of Higher Secondary Education” approved.
2013	(i) National Early Childhood Care and Education (ECCE) Policy adopted; (ii) The Integrated Child Development Services, the flagship programme of Government of India for ECCE restructured and strengthened
2014	National Youth Policy, 2014 adopted

Source: Report on Education for All -Towards Quality with Equity, 2014, MHRD

 

 

Literature Review

As pointed out by Tilak (1995), if the state income is low, then very low amount of spending on education will also give the impression that higher proportion of GSDP has been spent on education. States with a higher proportion of population belonging to SC, ST and with higher female to male ratio are any case found to incur significantly lower expenditure on education. The study of Rani, (2004) concluded that the variable reform displays a negative and significant coefficient irrespective of level of education. These results endorse the view that allocation of resources in favour of social sectors, such as education, has significantly declined in the post-reform era. Govinda and Biswal(2006) pointed out that from 1999-2002, the share of expenditure on elementary education increased by a little more than four per cent, taking the Centre and the States together. Several Centrally Sponsored Schemes (CSS) were launched as a follow-up of the NPE in the area of elementary education throughout the country. But the initiative for utilizing the resources was with the state governments.

 

Chakrabarti and Joglekar (2006) examines patterns and changes in the allocation of government funds for education, particularly higher education, over a span of two decades, before and after the introduction of the new economic policies. The study concluded that state real per capita income, is found to significantly enhance educational expenditure at the aggregate, elementary, secondary and higher levels. Moreover, contrary to general perceptions, education expenditure at all levels has been significantly lower after liberalization in comparison with the pre-economic reform era.

 

The study of Mukherjee (2007) provides a comprehensive assessment of the allocations made by the Government of India through its budgetary provision in the education sector over the 9th Plan period. The study concluded that India is unique among other developing countries in its use of earmarked taxes for financing public expenditure on education. It is extremely important, therefore, to see whether this increase in expenditure by the union government is ‘crowding in’ or ‘crowding out’ expenditure by the states or the private sector.

 

Investing in education is certainly one of the most critical components of enabling the “Inclusive Growth” agenda of the Government of India. Among the several studies carried out on the correlates of long-term economic growth in the nineties, the correlation between average years of education in a country and its growth rate has been among the most robust.Thus, investments in education are essential for aggregate economic growth as well as for enabling citizens to participate in the growth process through improved wages and employment

 

Pattern of Public Expenditure on Education

Expenditure on recurring items as salary of teachers, administrative staff, etc, comes under the revenue account, whereas that on non-recurring items as school building, libraries, equipment, etc constitutes the capital account. Revenue expenditure constitutes major part, around 99 per cent, of total expenditure from 1980- 81. On the other hand, the capital account forms negligible portion of total spending. India’s education budget (Center and States) has more than doubled in the last five years increasing from 83,564 crores in 2004-05 to 1, 91,946 crores in 2009-10. In Figure 1 lines representing central government and state government revenue expenditure on education are moving upwards, showing increasing trend. The sluggish growth in both lines also can be seen in the period of 2000-01 to 2005-06.The diagram clearly depicts that the pace of movement of growth of expenditure in the present decade was much faster than in the 1980s and 1990s, particularly after 2008-09.It can be explained that changing policies regarding education as - The Right of Children to Free and Compulsory Education Act, 2009, Rashtriya Madhyamik Shiksha Abhiyan and Sakshar Bharat mission etc., incorporated huge amount of expenditure on education since 2009 by central government as well as state government.( Figure-1).   It may be seen here that total expenditure on education as percentage of GDP was highest (4.14%) in 2000-01 but this level could not be sustained in the following year and comes down to 3.26% in the year 2004-05. After that it again started increasing but at a very slow rate. If we look at the percentage for Centre and States separately, we found that centre’s share showing an increasing trend over the years and gone up from 0.51% in 2000-01 to 1.16% in 2012-13, while state’s share has declined from 3.63% in the year 2000-01 to 3.13% in 2012-13.

 

However, as a percentage of total GDP, expenditures have actually fallen from 4.13% to 3.24% from 2001 to 2004 and after that it remains constant since 2008-09. Since 2009-10 expenditure on education as a percentage of GDP, increases but in very slow pace followed by state expenditure. It can be clearly seen that expenditure on education as a percentage of GDP by central government increases slightly since 2006-07. The gap between two lines narrowing continuously and represented opposite movement since 2006-07 (Figure-2).After that both lines move upwards depicted increasing trend in the expenditure on education as a percentage of GDPin the central and state account. 

 

 

Financing Education: An Inter State Analysis

This study has explored government financing of education in India over a period of 2006 to 2013 across the states of the country. Economic reform has certainly affected public expenditure

 

Table 1: Expenditure on Education– As Ratio to Aggregate Expenditure (%)

State	2006-07	2007-08	2008-09	2009-10	2010-11	2011-12	2012-13
Andhra Pradesh	10.8	9	9	10	12.5	14	13.6
Bihar	19.7	17.6	18.5	18.1	16.3	16.6	19.5
Chhattisgarh	12.9	13.5	14.4	15.6	18.6	19	17.8
Goa	13.7	13.3	13.3	14.1	15.4	16.6	15.4
Gujarat	12.7	13.4	11.7	13.8	15.9	16.1	13.4
Haryana	11.9	12.9	15	16.3	17.3	16.6	18.3
Jharkhand	15.2	15.1	18.6	15.4	15.8	17	17
Karnataka	13.1	14.4	16.1	14	15.6	15.5	14.8
Kerala	17.1	15.9	16.7	16.8	17	17.6	17
Madhya Pradesh	12.4	11.1	12.8	13	14.2	13.3	14.8
Maharashtra	16.4	17.2	17	19.1	20.8	19.9	19.8
Odisha	12.8	14.3	16.9	18.2	18.3	16.9	15.7
Punjab	8.9	10.3	11.3	12.2	11.7	15.6	14.2
Rajasthan	15.6	14.6	17.9	19	19.1	18	18.5
Tamil Nadu	12.2	12.7	13.1	15.2	15.2	14.5	15
Uttar Pradesh	14.7	14.1	13.2	13.8	16.1	17.4	17.6
West Bengal	15.2	15.2	13.1	17.7	19.7	19.4	17.8
Arunachal Pradesh	10.7	10.8	11.4	12.2	10.8	9.1	8.3
Assam	20.4	20.1	18.8	16.4	22	18.7	21.1
Himachal Pradesh	14.1	15.4	16.2	16.3	17.9	18.8	17.5
Jammu and Kashmir	10	9.2	10	11.3	12.6	13.4	13
Manipur	11.9	14.2	12	11.9	10.7	11.3	9.9
Meghalaya	14.1	15.5	12.8	14.8	16.1	17	16.5
Mizoram	13.8	13.2	14.1	14.9	14.9	15.7	14.5
Nagaland	12.3	11.4	11.2	11.3	13.4	12	12
Sikkim	10.5	9.2	10.6	17.3	17.3	12.1	12.5
Tripura	15.9	15.1	14.4	17.2	17.2	17.2	13.8
Uttarakhand	18.1	17.6	18.2	23.5	23.5	18.2	20.8
All States	14	13.8	14.3	16.6	16.6	16.6	16.5

Source: Analysis of budget expenditure, 2014 MHRD

Education is a concurrent subject, with states holding the primary responsibility for implementation. State governments thus contribute the majority share of India’s education budget. According to GOI estimates for 2009-10, 74% of total education expenditure was incurred by state governments. Public expenditure on education on revenue account increases continuously by central government and state governments, but as indicated by the graph, increase in state governments’ expenditure is more than central government expenditure on education in last few years on social sector in general and that on education sector in particular. So many studies concluded that education expenditure at all levels has been significantly lower after liberalization.

 

State governments have proposed a number of education related measures in their 2012-13 budgets, across India. These comprise setting up new schools, colleges and universities; providing free laptops to students and scholarships. Taken together, states are estimated to spend Rs 2.6 lakh crore, a 13% increase over 2011-12. But education expenditure as a proportion of aggregate expenditure has remained almost identical at around 16.5% since2009-10. The largest allocation to education comes in Assam (21.1%) while the lowest is in Arunachal Pradesh (8.3%) in the current year. The biggest increase in allocation is in Bihar, almost a 3% increase from 16.6% to 19.5%. But most of the North-East states, expenditure on education has decreased. Specially, in Tripura, education spending has reduced by 3.4% to 13.8% making it the largest reduction.  Small states like Jharkhand, Chhattisgarh, Punjab and Haryana, though had relatively low resources for education in 2006-07, also saw a significant increase in the last three years. On the other hand, among the BIMARU states, the expenditure on education of Madhya Pradesh and Rajasthan remained relatively stagnant while Uttar Pradesh and Bihar have significantly increased their education budgets. It is quite notable that expenditure on education Odisha government reducing continuously in the last 3 years.

 

Figure indicates the State-wise budget expenditure on education in terms of the Gross State Domestic Product of the respective states as below and above the expenditure of central government as percent of GDP for the year 2012-13. It is observed from the graph that the percentage of expenditure on education is below for the major states such as Delhi, Haryana, Gujarat, Punjab, West Bengal, Maharashtra, Andhra Pradesh, Odisha, Karnataka, Kerala, Tamil Nadu, Jharkhand, Rajasthan , Madhya Pradesh. while Some North–East states, Himachal Pradesh and Bihar spend more than central government expenditure.

 

CONCLUSION:

The public spending on education increased rapidly during the past few years. The salary costs represent between 80-90 percent of non-capital spending on education and increases sharply due to raising salary expenditure due to VI Pay Commission. The remainder of the budget is spent on a variety of schemes such as free textbooks, uniforms, and special schemes for disadvantaged groups. Amongst states that have a high education budget, Uttar Pradesh, Bihar and Andhra Pradesh saw largest increases in allocation. Interestingly, Uttar Pradesh, which did not have a substantial increase in SSA budgets, had the largest increase in state education expenditure.

 

Though enormous economic growth and development has been made during the past decades, the education system in India still faces several challenges as it seeks to further enhance access to and quality of education at all levels of education. Despite of manifold increase in the expenditure of central and state government, relatively higher dropout rates, the slow progress in dropping the number of non literates and unsatisfactory student learning levels continue to cause concern. Gender and regional disparities in literacy rate also continue to persist.

 

The ability to address the challenges facing the education sector and fully implement the planned programmes will depend heavily on resource availability. A key challenge relates to the need for maintaining a level of financial, material and human resources that are required to support both expansion and qualitative improvement of education at all levels and the utilization of the existing/available financial and human resources more efficiently

 

REFERENCES:

1        Chakrabarti, Anindita and Rama Joglekar (2006), ‘Determinants of Expenditure on Education: An Empirical Analysis’,, Economic and Political Weekly 41(14) 1465 -1472

2        GOI (Various Years): Analysis of Budgeted Expenditure on Education, Ministry of Human Resource Development.

3        GOI (2005): Action Plan for Inclusive Education of Children and Youth with Disabilities, MHRD

4        GOI (2014) Report on Education for All -Towards Quality with Equity, 2014, MHRD

5        Govinda, R and K Biswal: Elementary Education in the Tenth Plan: promise, Performance and Prospects, UNDP, New Delhi 2006

6        Mukherjee, Anit.( 2007)  ‘Implications for Education’, Economic and Political Weekly, 42(14): 1273–76.

7        Rani, G P (2004): ‘Economic Reforms and Financing Higher Education in India’, Indian Journal of Economics and Business, 3(1), pp 1-30.

8        Study of State Budgets: elementary education by Accountability Initiative and Azim Premji Foundation, January 2011

9        Tilak, J B G (1995): ‘Costs and Financing of Education in India: A Review of Issues’, Problems and Prospects, UNDP Research Project, Centre for Development Studies, Thiruvananthapuram, Kerala