STATE FINANCES FOR EDUCATION
National Institute of Educational
Planning and Administration, New Delhi
ABSTRACT A brief profile on the pattern of financing of elementary education in each state during the post-Independence period, especially in the eighties and nineties has been attempted. The paper presents a brief idea of the extent of financial resources required for universalization of elementary education by the year 2000 AD and the gap between the requirements and the likely resources. The findings have been discussed and the conclusions arrived at have been presented.
Introduction As a part of the District Primary Education Programme (DPEP), several baseline studies on various aspects relating to primary education have been conducted at district and state levels. These studies assume crucial importance in formulation, execution and evolution of the projects. An important area of study refers to state finances for education. Studies on state finances would be very valuable and serve several purposes including the preparation of the district level plans, providing valuable inputs into the planning process and for export evaluation of the DPEP by facilitating analysis of the additive versus substituting nature of the funds of the project.
The present study has been taken from the document Research Based Interventions in Primary Education : The DPEP Strategy (1994). National Council of Educational Research and Training, New Delhi.
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It was the intention of the national core team to build up state level capacities in preparing such studies, and accordingly the studies were conducted by the state government officers themselves, and the role of the members of the sub-group of the national core* team was confined to providing guidance and expert advice in the preparation of the studies. A couple of workshops were organised at NIEPA in the context of these studies, one at the commencement of the studies, and the latter towards the end for the finalisation of the studies. In addition, a few visits were made to the states during the conducting of the studies.
Studies on state finances have been conducted in six states (Assam, Haryana, Karnataka, Kerala, Maharashtra and Tamil Nadu), that provide a statistical, descriptive and analytical profile of the pattern of financing of education (particularly elementary education : primary and upper primary), and projections on the financial requirements of elementary education in each state, if elementary education were to be universalised by the turn of the century.
Objectives The main objectives of the studies on state finances for education are
1. To present a brief profile on the pattern of financing of education, particularly elementary education - primary and upper primary education - in each state during the post- independence period, concentrating on the 1980s to the present (1980-81 to 1992-93).
2. To present a brief idea of the extent of financial resources required for education (for universalisation of elementary education by 2000), and of the gap between the requirements and likely availability of resources.
The focus of the studies is on objective 1, and is on elementary education (primary and upper primary levels), though some important details on other and all levels of education as a whole were also to be given.
Originally a detailed structured outline of the studies was provided to the state governments as a suggestive framework for the studies. Finally, the state governments, on the advice of the Department of Education, Ministry of Human Resource Development, adopted the study prepared in the context of the Basic Education Project in Uttar Pradesh as a model format. It resulted in a somewhat uniform method of presentation of the studies by the several states, though there are a few differences in the presentation of details.
The main aspects identified for the studies were : (a) trends in financing education, including allocation of resources, priority given to education in the five year plans (outlay/expenditure on education as per cent of the total plan Outlay/
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expenditure), plan expenditure/outlay on education during the seventh and the eighth five year plans, growth in non-plan expenditure on education, expenditure on centrally sponsored schemes, intra-sectoral allocation of resources, inter-functional allocation of resources (expenditure by objects), and (b) requirement of resources for universalisation of elementary education up to the turn of the century, based on unit costs of education (expenditure on education per student) and projected enrolments with the target of universalising elementary education by the turn of the century.
It is obvious that the costing and financing of the DPEP have not been a part of the studies on state finances for education. Accordingly, the studies could not refer to a couple of important issues such as sustainability (how far will the projects being launched now with the help of external assistance be sustainable after the end of the project), and additionality (how far will the project funds be additional to the domestic finances being made available for education). Originally it was intended that the studies would provide some idea on sustainability of the projects, and additionality of the external funds. But due to data and other constraints, these two issues could not be discussed in the studies.
Findings A few important findings reported in the studies are as follows
1. Except Maharashtra, the budgetary conditions in the recent years, in all the other five states are characterised by almost continuously increasing deficits (in revenue account). One expects these adverse general budgetary conditions to have serious effects on education budgets. But no proper correspondence could be found between general budgetary conditions and education budgets, suggesting as if budgets for education are not affected by budget deficits.
2. Except in case of Kerala and Tamil Nadu, the priority accorded to education in the five year plans has increased significantly between the seventh and the eighth five year plans. (But the increase might be smaller than the increase between the sixth and seventh plans; the latter is attributable to the National Policy on Education, 1986). The increase in Assam to 19 per cent in the eighth plan from 8 per cent in the seventh plan is not `real', as plan outlay/expenditure in the eighth plan is meant for meeting non-plan expenditure as well.
In Kerala the share of education in the eighth five year plan expenditure/outlay was almost the same as in the seventh five year plan (3.7 per cent), and in the case of Tamil Nadu it has declined from 7.2 per cent in the seventh plan to 3.6 per cent in the eighth plan, though in absolute terms, the allocations have increased.
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3. Intra-sectorally, the relative priority accorded to elementary education also increased significantly in all cases, except in Tamil Nadu, between the seventh and the eighth five year plans, which is in response to the resolve made in the National Policy on Education 1986 to increase allocations for elementary education. In Karnataka, the share of elementary education in the total plan expenditure/outlay for education increased from 38 per cent in the seventh plan to more than two- thirds in the eighth plan. In Tamil Nadu, the change is in negative direction, but the quantum of change is marginal.
4. In the allocation of non-plan expenditure on education also, elementary education receives a high priority, receiving nearly half of the total in case of almost all the six states. However, between 1990-91 and 1991-92, the two latest years for which data are available, there is a marginal decline in the corresponding proportions, and the decline is steep in case of Assam (from 59.03 per cent in 1990-91 to 54 per cent in 1991-92): and in Karnataka there is a marginal increase. In the other states, the proportion remained relatively unchanged.
5. The recent trends in the grants to the states for centrally sponsored schemes for elementary education have not been systematic. During the last seven or eight years, such grants have increased in Assam, but declined in case of Haryana, and there were zigzag trends in case of other states. Grants for centrally sponsored schemes in adult education have declined in Assam, Haryana, Kerala and Tamil Nadu, and the trends are not smooth in Karnataka.
6. Understandably, the growth in plan expenditure on elementary education in Kerala during the 1980s has been negative not only in constant prices, but also in current prices due to declining age-group population and correspondingly declining enrolments.
7. Even the modest estimates of resource requirements based on projected enrolments and unit cost of education in the early 1990s, seem to be huge in most states. It is only in Kerala, the required rate of growth in enrolments is negative for universalisation of elementary education by 2000. Therefore, the resource requirements of Kerala are found to be not huge; but for improvement in quality of education it is felt that additional resources will be required in Kerala too. In real terms (i.e. at constant prices) the annual rate of growth required in resources is more than 7 per cent in most states (7.7 per cent in Karnataka, 12.8 per cent in Tamil Nadu, and nearly 20 per cent in Assam) during the remainder of the 1990s.
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Conclusion To conclude, the several studies highlight the following:
- There exist wide variations in the levels of expenditure (total, per student, and percentage proportions) on education, particularly elementary education among several states. That there are no norms (either at the central or state level) regarding the proportion of state income (SDP : state domestic product), plan outlays or budgets that need to be allocated for education, and in education for elementary education might partly explain the inter-state variations.
- The trends in the growth in expenditure on education are not smooth.
- There is a significant increase in the central expenditure on elementary education in the recent past in several states.
- There are also wide variations in the grants for centrally sponsored schemes, and the growth in the same is not systematic.
- The salaries of the teachers and other staff consume the largest proportion of the budget, leaving little amounts for other items; in some states (e.g. Karnataka) expenditure on incentives is sizeable.
- The requirements of capital nature are important, and they seem to be high.
- Lastly, no such attempts were made earlier by the state governments to analyse the trends in state finances for education in the states. But the importance of these studies is well recognised both in the context of DPEP in particular, and in the context of educational planning in general.
TABLE 1
Share of Education in Total State Plan Expenditure/Outlay (per
cent)
State Seventh Five Eighth five
Year Plan Year Plan
Assam 10.90 19.00
Haryana 5.30 7.10
Karnataka 4.25 8.80
Kerala 3.76 3.70
Maharashtra 2.50 3.90
Tamil Nadu 7.18 3.62
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TABLE 2
Share of Elementary Education In Total Plan Expenditure/Outlay on
Education (per cent)
State Seventh five Eighth Five
Year Plan Year Plan
Assam 49.30 59.30
Haryana 46.96 49.73
Karnataka 38.33 66.42
Kerala 18.00 21.00
Maharashtra 28.47 39.45
Tamil Nadu 51.38 50.49
TABLE 3
Share of Elementary Education in Total Non-Plan Expenditure on
Education (per cent)
State 1990-91 1991-92
Assam 59.30 54.00
Haryana 46.11 45.34
Karnataka 50.41 51.71
Kerala 52.50 51.00
Maharashtra 45.52 45.50
Tamil Nadu - 51.00
TABLE 4
Trends in Expenditure on Centrally Sponsored Schemes in Elementary
and Adult Education (1985-86 to 1991-92)
State Elementary Adult
Assam Increasing Decreasing
Haryana Decreasing Decreasing
Karnataka Zigzag Zigzag
Kerala Zigzag Decreasing
Maharashtra Zigzag Zigzag
Tamil Nadu Zigzag Zigzag
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TABLE 5
Required Real Rate of Growth in Expenditure on Elementary Education
to Provide Universal Elementary Education by 20000 (per cent)
State Annual Growth Rate
Assam 23.66
Haryana 8.00
Karnataka 7.70
Kerala -
Maharashtra 9.00
Tamil Nadu 12.80
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