RESOURCES FOR EDUCATION
Background 15.1.0 Education has tended to be given comparatively lower priority in the matter of sectoral allocation of resources. Allocation for education cannot be wholly treated either as investment outlay or as consumption outlay. Gestation period for investment in education to yield results is also too long. Difficulties are encountered in accurately estimating or quantifying the returns on investment in education. Reason is that the functional relationship between inputs and outputs in education is indeterminate. The net result is that, in India also as in other developing economies, education is treated as a social service sector and often gets for itself only the residual resources after allocations to the so-called productive sectors.
15.2.0 Though education has been in the Concurrent List in the Constitution since 1976, it remains primarily a State activity. Bulk of the investments is made by the State Governments. Free and compulsory education is expected to be provided by the States for all children upto 14 years of age. In most States education is free in the entire school stage. Upto class XII education is free for girls in all the States. The fee structure for higher education in the colleges and universities has virtually remained unchanged for many years. The pattern of educational development has, consequently, come to be dependent on the availability of public resources for education. On account of increasing resource crunch, however, share of Education in plan allocations has been declining over the years. Allocations have come to be sub-optimal. Table 3 below may be seen for share of Education in Five Year Plan outlays/expenditures.
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Present Picture Regarding Funding of Education in India 15.3.1 Education is now funded by various sources - Central and State Governments, local bodies and private contributions. Data on source-wise contribution of finance to Education in India (as far as they are available) are furnished in Table 1 below :
Table 1
Source-wise Contribution of Finances to Education in India
(percent)
1950-51 1960-61 1970-71 1980-81
Government Sector
Central and State 57.10 68.00 75.60 80.00
Governments
Local Governments
(Zilla Parishads,
municipalities,
Panchayats) 10.90 6.50 5.70 5.00
Private Sector
Fees 20.40 11.20 12.80 12.00
Endowments etc. 11.60 8.30 5.90 3.00
Total 100.00 100.00 100.00 100.00
(114.00) (344.40) (1118.30) (4687.50)
Note : Figures in brackets - in crores of rupees.
Source : Education in India: and Planning Commission for the year, 1980-81, quoted in NIEPA Journal, July, October, 1987.
15.3.2 It may be seen from the above Table that the Central and State Governments account for the bulk of the funding of Education in India. The share of the private sector is quite small and that of local bodies almost negligible.
15.4.1 Presented in the following Table is the picture regarding Central and State share in Plan expenditure :
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Table 2
Contribution of Centre and the States to Plan
Expenditure on Education in India
(percentage)
Five Year Plan Central State Total
Govt. Govt.
First 25 75 100 (153)
Second 25 75 100 (273)
Third 26 74 100 (589)
Fourth 33 67 100 (823)
Fifth 30 70 100 (930)
Sixth 30 70 100 (2945)
Seventh 37 63 100 (6383)
.LM15
Note : Figuress in () are in crores of rupees
Source : Five Year Plans
15.4.2 The above Table would show that during the Fifth and Sixth Plans, Central share came down from the level of the Fourth Plan. Of course, during the Seventh Plan, the share has increased.
15.5.0 More often, Plan expenditure is lesser than the original outlays as may be seen from the following Table.
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Table 3
Differences* between Plan outlays and expenditure in Education
(Rupees in crores)
Five Year Outlay Expenditure Column Column (4)
Plan (2)-(3) as % of (2)
1 2 3 4 5
First 170 153 -17 -10.00
(17.2) (7.9)
Second 177 273 +96 +54.23
(6.2) (5.8)
Third 560 589 +29 +5.20
(7.5) (6.9)
Fourth 822 786 -36 -4.40
(5.2) (5.0)
Fifth 1284 930 -354 -27.60
(3.3) (3.2)
Sixth 2524 2835 +311 +12.30
(2.6) (2.6)
Seventh 3230 2998 -232 -7.20
(3.9) (3.6)
Note : () % to total plan outlay/expenditure.
: Difference occurred on account of more or less resources made available through the annual plans during the Plan periods and also on account of actual performance.
Source : A Handbook of Education and Allied Statistics; Economic Survey 1984-85 and Department of Education, Ministry of HRD.
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15.6.1 The following Table brings out the position regarding Centre- State partnership in financing non-plan expenditre on Education :
Table 4
Centre-State Partnership in Financing
Non-plan Expenditure on Education
(percent)
Five Year Plan Central Govt. State Govt. Total
Second 14 86 100 (577)
Third 16 84 100 (1056)
Fourth 4 96 100 (4820)
Fifth 6 94 100 (8009)
Sixth 6 94 100 (23434)
Seventh 6 94 100 (44913)
Note : Figures in () are in crores of rupees.
Source : Department of Education, Ministry of Human Resource Development.
15.6.2 The above Table would show that the share of the Central Government in non-plan expenditure has come down to 6% during the Sixth Five Year Plan, State Governments' share having gone upto 94%.
15.7.0 While the share of Education in the revenue budget is reasonably high, on the Capital side its share is almost negligible. The share of Education in Central budget as a percentage of Revenue and Capital expenditure is only 1.7%. In the budgets of States and UTs, the share is 18.9%. In this context, the following Table may be seen :
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Table 5
Budget Expenditure (actual) on Education by Education
and Other Departments, 1985-86
Expenditure Total expenditure %of
(Rs. in crores) on all sectors total
(Rs. in crores) Budget
Centre
Revenue. 528.50 33384.00 1.6
Capital - 8899.60 -
Loans and advances 2.93 138.07615 -
Total 531.43 56090.75 0.9
State Union Territories
Revenue 6928.47 33707.41 20.6
Capital 114.24 5064.30 2.3
Loans and advances 11.83 3711.29 0.3
Total 7054.54 42483.00 16.6
Total
Revenue 7456.97 67091.41 11.1
Capital 114.24 13963.90 0.8
Loans and advances 14.76 17518.44 0.1
Total 7585.97 98573.75 7.7
Source : Analysis of budgeted expenditure on education, 1985-86 (Department of Education, Ministry of Human Resource Development)
15.8.1 The total Central and State Plan expenditure has also been falling. It was only 3.55% for the seventh plan. The below may be seen for data on intra-sectoral resource allocation for Education during the various plans
46-670 Deptt. of Edu, 90.
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15.8.2 The share of Elementary Education has come down from the level of 56% in First Plan to 29% in the Seventh Plan. The share of Secondary Education has remained somewhat stable with marginal differences between 13% and 18%. Higher (College and University Educaion) has expanded over the years from 9% during the First Plan to 22% in the Fifth Plan. (Of course, share of Higher Education as a percentage of outlay during the Sixth and Seventh Plans has come down to the levels of 19% and 12% respectively).
15.9.1 The status of household expenditure on Education in India is reflected in the following Table.
Table 7
Household Expenditure on Education in India
Expenditure Per Capita Total as %age
(in Rs. Crores) Expenditure in Rs. of GNP
At current At 1970-71 At current At 1970-71
prices prices prices prices
1970-71 896 896 16.6 16.6 2.05
1976 1253 844 20.6 13.9 1.9
1981 1928 817 28.4 12.0 2.1
1982-83 2568 896 36.2 12.6 2.1
Rate of 9.2 0 6.7 (-)2.4
Growth %
Source : National Accounts Statistics (Central Statistical Organisation)
15.9.2 The above Table shows that at constant prices, growth of household expenditure between 1970-71 and 1982-83 has been nil. Per capita household expenditure has, in fact, had a negative rate of growth.
Resources for Education as envisaged in the National Policy on
Education, 1986 15.10.1 The National Policy on Education, 1986 spells out the approach to mobilisation of resouces for Education as follows :
"The Education Committee of 1964-66, the National Education Policy of 1968 and practically all others
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concerned with education have stressed that the egaliterian goals and the practical, development oriented objectives of Indian society can, be realised only by making investments in education of an order commensurate with the nature and dimensions of the task.
"Resources, to the extent possible, will be raised by mobilising donations, asking the beneficiary Communities to maintain school buildings and supplies of some, consumables, raising fees at the higher levels of education and effecting some savings by the efficient use of facilities. Institutions involved with research and the development of technical and scientific manpower should also mobilize-some funds by levying a cess or charge on the user agencies,, including Government departments, and entrepreneurs. All these measures will be taken not only to reduce the burden on State resources but also for creating a greater sense of responsibility within the educational system. However, such measures will contribute 'only marginally to the total funding., The Government and the community in general will find funds for such programmes as the universalisation of elementary education; liquidating illiteracy, equality of access to educational opportunities to all sections throughout the country; enhancing the social relevance, quality and functional effectiveness of educational programmes; generating knowledge and developing technologies in scientific fields crucial to self-sustaining economic development; and creating a critical consciousness of the values and imperatives of national survival.
"The deliterious consequences of non-investment or inadequate investment in education are indeed very serious. Similarly, the cost of neglecting vocational and technical education and of research is also unacceptable. Sub-optimal performance in these fields could cause irreparable damage to the Indian economy. The network of institutions set up from time to time since Independence to facilitate the application of science and technology would need to be substantially and expeditiously updated, since they are fast becoming obsolete.
"In View of 'these imperatives, education will be treated as a crucial area of investment for national development and survival. The National Policy on Education, 1968 had laid down that the investment on education be gradually increased to reach a level of expenditure of 6 per cent of the national income as early as possible. Since the actual level of investment has remained far short of that target, it is important that greater determination be shown now to find the funds for the programmes laid down in this Policy.
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While the, actual requirements will be computed from time to time on the basis. of monitoring and review, the outlay on, education will be stepped up to the extent essential for policy implementation, in the Seventh Plan. It will be ensured that from the Eighth Five Year Plan onwards, it will uniformly exceed 6, per cent of the National Income."
National Policy on Education, 1986 and Contra-State Partnership in
Education 15.10.2 In the following words, the National, Policy on Education, 1986, calls for a "Meaningful" partnership between the Centre and the States in regard to Education.
"The constitutional Amendment of 1976, which included Education in the Concurrent List, was a far-reaching step whose implications substantive, financial and administrative require a new sharing of responsibility between the Union Government and the states in respect of this vital area of national life. While the role and responsibility of the States in regard to education will remain essentially unchanged, the Union Government, would accept a larger responsibility to reinforce the national and integrative character of education, to maintain quality and standards (including those of the teaching profession at all levels) , to study and monitor the educational requirements of the country as a whole in regard to manpower for development, to cater. to the needs of research and advanced study, to look after the international aspects of education, culture and Human Resource Development and, in general, to promote excellence at all levels of, the educational pyramid throughout the country. Concurrency signifies. a partnership which is at once meaningful and challenging; the National Policy will be oriented towards giving effect to it in letter and spirit."
Funding for Education According to Envisaged Perspective &
Strategies 15.11.1 The perspective for Education, as for other Sectors, has been presented upto the year 2000 A.D. by the Seventh Plan document Under the chapter on "Development Perspective: Towards the year 2000" as follows: - "By the year 2000, illiteracy would be eliminated and universal elementary education would have been provided for all. children upto the age of 14. It is expected that drop-outs in the age group 6-14 would be reduced to negligible levels. Extensive provision would be made for continuing and recurrent education and Use of
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modern communication technology. There will be substantial vocationalisation of secondary education by the turn of the century. Non-formal education using a variety of means and methods, including video technology and computers, would play a significant role."
15.11.2 The Seventh Plan document lays down the strategy and pattern of growth of Education as follows: "Enrolment in elementary, education (Class I-VIII) is expected to increase by 25 million and cover 92 per cent of the population in the age-group 6-14 years by 1989- 90. In addition, non-formal systems will be used to bring closer the objective of universalisation of elementary education. Secondary school enrolment is expected to go up by 5 million partly through better utilisation of existing schools, and with a special emphasis on vocationalisation. Special efforts will be made to improve the quality of education. As part of this drive, model schools will be set up in each district to impart quality education to promising children, particularly those coming from rural areas. Adult literacy programmes will be pursued with the objective of covering all illitertes in the age-group 15-35 by 1990. In higher education and technical education, the emphasis will be on consolidation and improvements in quality."