 RESOURCES FOR EDUCATION

FUNDING PATTERN IN EDUCATION

2.1 Education is funded by various sources. Apart from Government funds comprising funds from Central and State Governments and local bodies, private sector also does contribute to the resources for education in the form of fees, endowments, university funds, donations, etc. The source-wise contribution of finances to education over the last four decades is furnished in Table 9.

2.2 The figures in the table depict an increasing dependency on Government funds over the years. The share of local bodies had sharply declined in between 1950-51 and 1960-61 and thereafter it has almost stagnated around 5 to 6 per cent. Contribution of private sector in funding education has also gone down.

2.3 Government funds are provided for education both under Plan and Non-Plan. The Plan outlay as percentage of total Budget provision for education in various States/UTs has been rather small. During the years 1990-91 and 1991-92 the share of Plan outlay in the total Budgetary expenditure for all the States were 8.20 and 8.26 respectively as may be seen from the figures in Table 10. The budgeted expenditure on education by Education Departments for, 1992-93 is given in Table 11.

2.4 More often Plan expenditure is lesser than the original outlays as may be seen from Table 12. 2.5 The share of Central Sector has been much less than that of the State Sector in the Plan expenditure on education

till the Seventh Plan, as depicted in Table 13. However, during the Seventh Five Year Plan there has been a significant increase in the Central Sector's share (40%) as a percentage of total plan expenditure on Education. During Eighth Five Year Plan the share of Central sector remained at the same level (38 per cent) as that in the Seventh Five Year Plan.

2.6 Table 14 brings out the position regarding Centre-State partnership in financing Non-Plan expenditure on Education. Table 1.4 would show that the share of Central Government in Non-Plan expenditure has come down to 5 per cent during the Seventh Five Year Plan period, State Government's share having gone up to 95 per cent.

2.7 While the share of Education in the revenue budget is reasonably high, on the Capital side, its, share is only 1.0 per cent. The share of Education in the Central Budget as a percentage of Revenue and Capital expenditure is only 2.2 per cent. In the budgets of States and UTs, the share is 20.0 per cent. In this context, Table 1.5 may be seen.

2.8 The total Central and State Plan outlay on education as percentage of total plan has also been falling. It was only 3.03 per cent for the Seventh Plan Outlay. However, during the Eighth Plan, the share of Education in total Plan outlay has gone up to 4.5 per cent.

2.9 Table 16 may be seen for data on intra-sectoral resource allocation for Education during the various plans. The share of elementary education in Plan outlay of education which had declined from 56 per cent in First Five Year Plan to a range of 28 to 37 per cent during the subsequent Five Year Plans, has

again improved to 46 per cent in Eighth Five, Year Plan. The share of secondary education had almost stagnated around 16 to 18 per cent except for Fifth, Sixth and Seventh Plans. Higher (College, and University) Education had considerably expanded during the successive Five Year Plans. Starting from a very low figure of 9 per cent, the share of higher education in the total Plan outlay of education had increased to 28 per cent in the Fifth Plan. However, subsequently, it came down to reach a figure of 14 per cent in the Seventh Plan. Technical education did get a better share during the Third Plan and the Plan Holidays. During all other Plans, the share of Technical Education was almost stagnant within a range of 11 to 13 per cent with a share of 14.2 per cent for Eighth Plan.

SOME SPECIAL ASPECTS OF RESOURCES FOR EDUCATION

Centre's Role in Education

2.10 The NPE, 1986 was a landmark insofar as funding for education is concerned. The Policy itself was an offshoot of the transfer of education from the State List to the Concurrent List in 1976. It redefined the role of Central Government in education. 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 includes 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.

2.11 The Central Government's acceptance of its new responsibilities in education was reflected in the increased central share in the total expenditure on education in the years following the adoption of the Policy. A number of initiatives were taken by the Central Government in the field of education which included launching of a large number of centrally sponsored schemes not only for improving access to education but also for improving the quality of education. One reason for launching of centrally sponsored schemes was to ensure that funds earmarked for educational programmes are not diverted to other schemes.

States' Difficulties in Centrally Sponsored Schemes

2.12 In a number of centrally sponsored schemes the States have to raise matching contributions as State share. However, the implementation of these schemes have been lacking for want of the State's share forthcoming. The reasons given by the States are inadequacy of the resources available with them. There is, thus, a need for giving special assistance to the States for raising the State's share of the centrally sponsored schemes.

Invisible Contribution by Household

2.13 In the projections of expenditure on education the missing factor is the contribution by the family. This is an invisible and indirect factor because it is the cost of the loss to the household consequent to the child's attending school instead of helping in the household. In view of the socioeconomic conditions prevailing in the country in which person striving for learning begins at a very early age, the share of this factor is much high.

Economic libralisation and Education

2.14 The re-structuring of the economy also imposes certain obligations and additional expenditure on the education sector. An important element in this regard is the need for massive retraining of the labour force to tune them to the newer technologies and the global market conditions. With the Government being relieved from the compulsions to invest in economic enterprises, its focus should now be on social sectors wherein the private entrepreneurs would not be very keen to invest. Both these factors point towards the need for greater governmental invest-

ment in education.

2.15 Expenditure on education should be looked upon as an investment. This is an investment the return of which do not accrue to education but to other sectors of economy. It is now universally recognised that only an educated population can bring economic development. As the National. Policy on Education (NPE), 1986 puts it, "Education develops manpower for different levels of the economy. It is also the substrate on which research and development flourish, being the ultimate guarantee of national self-reliance. In sum, Education is a unique investment in the present and the future." Therefore, the expenditure on education should be looked up on as an investment and not as one of balancing the accounts book.

Raising Resources for Education

2.16 The NPE says, "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 .... However, such measures will contribute only marginally to the total funding." 2.17 There is a case for raising fee in higher education together with appropriate support to the needy students. However, nowhere in the world is higher education financed solely by

fees. In fact, there is no magic or single solution to the problem of financing higher education. It is not a question of either budgetary resources or non-budgetary resources, but one of harmoniously harnessing all possible sources of funding. Financing policy should, therefore, seriously encompass a mix of reinforcing and consistent measures. Another important issue in this context is providing for the special needs of institutions of national importance in a manner consistent with principles of equity.

2.18 Different aspects of the issue of raising additional resources by the university system have been looked into by the Punnayya Committee appointed by the UGC whose recommendations have already been referred to. Government, anyway, have in the last couple of years considerably enhanced the tuition fee in IITs, IIMs, etc.

2.19 Besides raising fee another measure for increasing resources for education is levying of an education cess. The NDC Committee on Literacy (1993) recommended that "Central and State Governments should explore the possibility of levying an education cess on urban and rural revenues/incomes/properties in such a manner that the proceeds of the cess are avail-able both to Centre and States and 100% earmarked and utilised for the promotion of literacy, including elementary education." This recommendation was considered by the Conference of Chief Ministers held on 15th February, 1994. There was a broad agreement to explore the possibilities for levying such a cess. It was, however, felt that the total income from such a cess would not be significant.

Improving Efficiency

2.20 Revamping and restructuring of management of education need to be given special care and attention to improve efficiency and to bring economy in expenditure, The steps proposed in this direction are decentralised management of education ensuring community participation as envisaged in the 73rd and 74th Constitutional Amendments, disaggregated target setting, area-specific micro-planning, convergence of services and an improved management information system which will ensure close monitoring of programme implementation. Entrustment of education to the Panchayati Raj and Nagar Palika institutions is expected to instill greater sense of accountability among the educational functionaries.

2.21 The success of the TLCs in adult literacy has proved the efficiency of the mission mode and the Department proposes to have a similar mission initiative, incorporating the aforementioned management innovations, in primary education. The new initiative, viz., District Primary Education Programme (DPEP) moves away from the earlier schematic, piece-meal approach and takes a holistic view of elementary education, emphases decentralised management, community mobilization and undertakes district and population specific planning. In keeping with the new approach, the DPEP guidelines stipulate that management cost should not exceed 6 per cent of the project costs and construction activities including provision of water supply and electrification should not exceed 24 per cent.

Norms of Expenditure in Education

2.22 There cannot be universal norms applicable to all sectors of education. In the case of elementary education, and practically in the case of secondary education also, the question of receipts does not arise. Even in higher education, generation of internal resources by education will be restricted mainly to fees. This cannot be expected to be more than 20 per cent, i.e., the level of this source in 1950-51, even after fees are raised. So far as expenditure on education is concerned the norms should take into account pupil - teacher ratio, comparability of quality of education, teacher quality upgradation aspects, etc.

Normative approach in assessing receipts and expenditure on Revenue Account of the States and the Centre

2.23 The following are the norms that could be followed in assessing the receipt and expenditure on revenue account of the States:

- Educational backwardness, particularly as reflected in female literacy rates;

- Per capita educational expenditure (Plan and Non-Plan together);

- Per capita Non-Plan expenditure in education;

- Primary school enrolment per lakh of population;

- Percentage of primary schools having Pucca/semi Pucca buildings;

- Percentage of trained teachers, particularly qualified Science and Mathematics teachers;

- Percentage of schools having minimum essential equipment.

It is desirable that the norms have a bearing on distributive and qualitative aspects.

2.24 Education is in the social service sector. There are policy commitments in terms of development of have-nots and the deprived particularly the Scheduled Castes and Scheduled Tribes. Farther, basically, there is the Constitutional directive for free education for all children upto the age of 14 years. In the circumstances the scope for revenue receipts is rather limited, leave alone the question of stipulating norms for receipts (However, norms could be set as regards receipts from Higher Education sector).

2.25 In the central sector of education there are virtually no revenue receipts.

2.26 The norms for revenue expenditure of the Central Government would, in turn, be dependent upon the above mentioned norms concerning the States. This is particularly so after Education was brought under the concurrent List. The Central Government have to work in partnership with the States and expend resources for the educational development of the States. 2.27 Expenditure, whether it be at the central or state level is a function of the following basic factors:

i) Provision of Teaching staff;

ii) Provision of buildings;

iii) Provision of equipment;

iv) Levels of research oriented activities;

V) Subsidies (direct like scholarships, concessional supplies of paper for textbook production, etc. or

indirect, principally non-collection or user fee)

2.28 Already norms do exist in the matter of provision of teachers, buildings and equipment. Such norms have been stipulated by the Central Government, State Governments as well as the UGC.

2.29 Scholarships are meant for encouraging the poor and the talented.

Diversion of Funds

2.30 The central and centrally sponsored schemes are ways to ensure that earmarked funds are not diverted to other areas. The procedure of release of grants under these schemes in instalments, and insistence upon audited statement of accounts and utilization certificates guarantee that the funds are utilized for the purpose for which they are sanctioned. The schemes, of course, give considerable flexibility in implementation to the State Governments.